by Bill Clinton
12. At least paint the roofs white. The black tar roofs covering hundreds of thousands of American buildings, especially in older cities, absorb a huge amount of heat, requiring much more energy to cool the rooms below. Just painting the roof white can cut a building’s energy use by up to 30 percent on a hot day. Every flat tar roof in every city and town should be painted white. Mayor Michael Bloomberg started a program in New York, the Green City Force, to train young people to do this work. A majority of them have been able to parlay their experience into high-skilled training programs or better-paying energy jobs. And lowering the electric bills 20 to 30 percent in every apartment or office frees up cash that utility customers can spend on other things.
We can get even greater energy savings and lower bills by planting greenery or growing gardens on rooftops. It costs more than painting because the roof has to be sealed to prevent leaking and strong enough to bear the extra weight, but the savings are greater. Chicago leads the nation in green roofs, but they’re sprouting up everywhere.
Syracuse, New York, has started a program similar to Green City Force, Helping Hands, for unemployed people who didn’t finish high school, training them to achieve even greater savings per building than Green City. Finally, thirty-five organizations and six federal agencies, funded by the Gates and Kellogg Foundations, are working together to create national opportunities for low-income young people in what they call the Green Career Pathways Framework. You can see that all this is good economics, for contractors, their employees, and people who pay utility bills. We just have to get the funding right. This is another example of how public, private, and not-for-profit cooperation works a lot better than ideological conflict.
Energy efficiency, if properly financed, can be an important job creator. And for those of us who agree with the 95 percent of climate scientists who say global warming is a big problem, efficiency is also a key element of the solution. The Center for American Progress estimates that the United States could achieve 50 percent of the reductions required to cut our greenhouse gas emissions 80 percent by 2050 through greater efficiencies alone.
13. Reinstate the full tax credit for new green-technology jobs. This tax credit has already helped more than twenty-one hundred solar technology start-up companies, as well as businesses making other green-tech products. The only thing wrong with it is that the total benefits were capped, resulting in a long waiting list of companies eager to create new jobs that would boost the economy and make us more energy independent. That is the kind of tax break a job-starved economy needs, and it’s about to go away. Why?
In December 2010, with the Bush tax cuts about to expire, the White House and Congress entered into negotiations on which tax cuts to extend. Because of the deficit, President Obama wanted to let the rates on people earning $250,000 or more expire while extending the Bush tax cuts for 99 percent of Americans, along with other tax breaks, including the green-tech projects. The Republicans said they would block the extension of all the tax cuts, including those for the middle class, unless the green-tech credit, called section 1603, was eliminated. At the last minute, they finally agreed to extend it, but for only one more year, so it’s scheduled to expire at the end of 2011.
Why did the antigovernment representatives oppose section 1603? They said it wasn’t a tax cut at all; it was a spending program. You can decide whether you agree. Here’s how it works. A conventional tax credit doesn’t help new companies, because, in the early years of production, they don’t have income to offset the tax credit. Therefore, the investment tax credit, for up to 30 percent of new capital expenditures, and the production tax credit of 2.2 cents per kilowatt hour of production don’t help start-ups unless the credits can be sold to investors for money now. There hasn’t been much of a market for buying tax credits since the recession began. To overcome this problem, section 1603 has allowed start-ups, mostly solar companies, to convert the credit into its cash equivalent since 2009. In the first two years of the program, $9.2 billion was distributed to support more than $31.1 billion in capital investment, including the over nineteen thousand solar projects and over four hundred wind projects. The 1603 credit is also projected to increase new wind energy installations 50 percent for every year it remains in place. Section 1603 plants are springing up all over the country. And as I said, there’s a long waiting list of qualified companies that won’t benefit from it and may not get off the ground unless the credit is extended beyond 2011. It’s not such a high price to pay compared with China’s incentives: free land, free worker training, and a twenty-year tax holiday.
Yet the antigovernment position is to let a proven job-creating tax break die while supporting the continuation of long-standing ones for companies already flush with cash, whether they are creating jobs in America or not. And calling 1603 a spending program, not a tax cut, is a weak attack. If section 1603 is a spending program, so are other business tax credits and deductions. That’s why budget experts call them tax expenditures. If those tax breaks aren’t spending, neither is section 1603. It’s a cash advance on the investment tax credit so that it works for new companies as well as for established ones.
When I was in college, professors called this a distinction without a difference. When I was growing up in Arkansas, we called it straining at a gnat and swallowing a camel. That’s what ideology and powerful vested interests will do to you. The provision has created a lot of good jobs in companies that will create a lot more. We need more jobs. It should be extended.
One of the reasons all Americans should support incentives like section 1603 is that over the next couple of years, several of our oldest, most polluting coal-fired power plants are scheduled to be shut down, and we need the capacity to replace them.
HERE ARE SOME RELATED job-creating ideas.
14. Finish the smart grid, with adequate transmission lines, at least enough to connect the areas where the wind blows hardest and the sun shines brightest to the population centers that use the most power. The stimulus legislation provided $17 billion for this purpose, a good start but not enough to cover all the areas of greatest opportunity for power generation and for job creation. Our grid is divided into 140 largely autonomous areas of varying capacity. This leads to electricity disruptions that cost the economy $100 billion a year. Fixing it entirely would cost twice that but would provide a quick return and allow 300,000 megawatts of wind capacity and 4,000 megawatts of large solar projects already planned to be built, because the electricity they generate could be transmitted to users. If the transmission capacity were there, North Dakota alone could provide 25 percent of our nation’s electricity demand with wind.
This is more important than ever, because the cost of wind energy, if produced by turbines that qualify for the production tax credit, is almost competitive with fossil fuel generation now, and solar power, both from photovoltaic cells and from large solar thermal plants that capture the sun’s energy to turn water into steam that runs power generators, is expected to reach parity over the next five years, because of technological breakthroughs and the investment tax credit. The price of both solar and wind drops meteorically as their volume increases, about 30 percent each time capacity is doubled.
An additional benefit of connecting power generators in sunny, windy rural areas to urban grids is that it will create good jobs in areas that have been left behind for decades. For example, Americans with the lowest per capita incomes are Native Americans who live on tribal lands too far from population centers to have profitable gambling operations. With solar and wind power, virtually all of them could become energy independent, create new jobs, and generate substantial income that they could use to build more diverse, sustainable economies.
Besides ensuring the most efficient distribution of power across the nation as demand rises and falls in different places, a smart, connected power grid would enable utilities to reward customers willing to use power in off-peak hours, like washing and drying clothes late at night or early in the morning, whe
n factories and office buildings are not up and running. Doing this nationwide would save all ratepayers money by reducing the need for extra power plants. An amazing amount of power plant capacity is idle most of the time. It’s built to make sure we don’t lose power on the hottest day of the year when everything that uses electricity is on. A smart grid and modern transmission lines could reduce the amount of excess capacity we need, saving money for businesses and consumers and creating jobs.
15. Geothermal energy, using underground heat, should be increased. Even with a superefficient system, we’ll still need a lot of power to sustain growth, so we need to maximize power generation from other domestic sources, including geothermal, solid waste, and natural gas. The United States already leads the world in geothermal capacity, with 3,100 megawatts, though Iceland and the Philippines generate a higher percentage of their electricity with it because of their unique geology. Because of stimulus funding, almost 8,000 megawatts of new geothermal capacity were added in 2010. With the tax incentives, the price of geothermal power, at three to five cents per kilowatt hour, is highly competitive. Because of the projects begun since 2009, employment related to the geothermal sector has more than doubled, exceeding fifty thousand jobs, with more on the way.
16. Not every community can develop geothermal power, but every community produces a lot of solid waste. We should turn more landfills into power generators. There are real benefits in converting solid waste into power: closing landfills; building recycling businesses in plastic, metal, glass, and organic fertilizer; and using the rest to provide steam heat to power factories or provide electricity for the grid. We could create jobs, improve public health, and free land for more productive purposes. Once the cost of a solid-waste plant is recovered, it’s a great source of cheap power.
For an initial investment of $600 million in 1972, the city of Gothenburg, Sweden, built an efficient waste-to-energy generator that now saves its more than 500,000 citizens $33.6 million a year, reduces CO2 emissions by 25 percent, and requires much less landfill space. São Paulo, Brazil, has power plants at the site of two of its large landfills. In India, New Delhi has just begun a large waste-to-energy project that my foundation’s Climate Initiative helped to develop. In the 1980s, when I was governor of Arkansas, we had a steel wire plant that weathered the big downturn in manufacturing solely because its energy costs were lower than those of its competitors. The energy came from the local landfill. We should do a lot more of this.
17. Develop our natural gas resources. Many old coal-fired plants are scheduled to be closed in the next few years. They’re big producers of carbon dioxide; the oldest 10 percent are responsible for about 40 percent of total CO2 emissions from coal plants. As we develop other sources of clean power, we should use natural gas as a bridge fuel. It’s the cleanest fossil fuel, more than 50 percent cleaner than coal in terms of greenhouse-gas emissions, 25 percent cleaner than oil when used in transportation, and only one-fourth as expensive. And new discoveries in the United States have given us a huge supply, enough for ninety years. I’d also like to see more natural-gas lines in the Northeast so that houses there could use it for heating. It’s cheaper and cleaner than home heating oil.
The primary controversy over natural gas concerns the most efficient technology for its extraction, called fracking. It’s alleged that the injections of a chemical solution into underground fissures to release and push the gas into more accessible and less costly recovery positions pollute water supplies and pose other health challenges. So far, studies in the areas where fracking has been most criticized don’t seem to support the claim, but there is some troubling anecdotal evidence. State and federal officials with environmental protection responsibilities could allay public concerns by requiring extra care and monitoring of fracking, keeping it from being done too close to aquifers or other sources of drinking water. I also think the gas companies should disclose to the EPA the chemicals used in fracking so that any risks can be properly evaluated. Apparently many companies do so already, though they were exempted from having to in the 2005 energy bill, which I think was a serious mistake.
Natural gas also has great potential as a transportation fuel, as T. Boone Pickens has been arguing for years. My foundation has worked with cities in Latin America to install cleaner buses that run on concentrated natural gas, which can also power heavier trucks better than currently available electric battery technology. Transportation is responsible for about 25 percent of America’s greenhouse-gas emissions, and oil imports comprise about half our trade deficit. The less we use gasoline to get around, the better off we’ll be.
With proper care, I think we can extract the gas. We need it, and it can both make us more energy independent and contribute to job creation and growth.
18. Keep developing more efficient biofuels. In 2005, the United States adopted a requirement that renewable fuel usage be at least 7.5 billion gallons in 2012 and increase at a rate equal to the growth of gasoline after that. To achieve that goal, Congress passed a subsidy for the production of fuel from corn. In recent years, more than a third of our corn crop has gone to fuel production. The subsidy has been heavily criticized in the United States and abroad because of rising corn prices, global food shortages, and the relative inefficiency of corn ethanol compared with other biofuels. During the budget negotiations, there was bipartisan agreement to end the subsidy quickly.
That’s good policy, though perhaps it would have been better to phase the subsidy out over three years. Regardless, it would be a mistake to abandon biofuels altogether. They help us to become more energy independent, and the fuel-processing plants create good jobs. The virtue of corn is that the cost of converting it into fuel is much less than that for other biofuel stocks, including switchgrass, rice hulls, and other biostocks widely available in the United States. The problem with corn is that it produces barely 2.5 gallons of biofuel for every gallon of oil required to make it, compared with 4 gallons or more for other biofuels and 9.3 gallons for fuel produced from sugarcane.
We should continue to promote biofuels, including biodiesel, by funding research to reduce conversion costs and providing tax incentives to help the ethanol plants switch to more efficient stocks when the corn subsidy dies. We should also consider changing the sugar subsidy to steer some of our own cane crop into biofuel. It might even help us with our obesity problem!
19. Keep the tax credits for producing and buying electric and hybrid vehicles, and increase the pace at which the federal automobile fleet is being converted. Our electric vehicle fleet is just getting off the ground, and it’s already spurred new manufacturing companies whose founders believe they can compete with the all-electric Chevy Volt and Nissan Leaf, as well as the big-brand hybrids. My friend Terry McAuliffe went to China and bought one of their largest electric car companies and moved the entire operation to the United States, with two plants in Mississippi, and plans to expand to other states. We can’t afford to lose this market to the Chinese, who are forging ahead, as are other nations, with electric-vehicle production.
Before we leave the transportation issue, I can’t help noting the biggest step in the right direction the United States has taken lately. In late July 2011, President Obama announced an agreement involving Ford, GM, Chrysler, and ten other manufacturers accounting for 90 percent of U.S. auto sales, the United Auto Workers, environmental groups, state officials, and his administration to increase the average fuel economy of auto fleets to 54.5 miles per gallon by 2025. When fully in place, the new standards will cut carbon pollution in half and reduce fuel consumption 40 percent. The cleaner engines, more efficient transmission systems, lighter materials, and more aerodynamic designs required to meet the goal will create 150,000 American jobs, reduce our oil use by more than three million barrels a day, and save Americans $80 billion a year at the pump.
There was no fighting or name-calling, so it was a one-day story. Did you miss it? Don’t miss the point. Conflict may work better in politics or in boosting
the ratings of news programs, but cooperation works better in real life. Americans need victories in real life.
ONE THING THAT WOULD SPEED our much-needed transition to an energy strategy that produces more manufacturing jobs, lowers fuel bills, provides greater energy independence, and offers the possibility of averting the worst consequences of global warming is to have a large investor with enough market power to shape the future. The most obvious candidate is the U.S. military.
20. The military can and should do more to speed our energy transformation. Why? First, because the Pentagon, much to the chagrin of climate deniers in Congress, has recognized climate change as a threat to our national security. The Pentagon has conducted war games and ordered intelligence studies to determine the range of problems that rising temperatures, droughts, food shortages, melting glaciers, and high sea levels present to our security, and it is working on a range of possible responses to them. Second, because the federal government is America’s largest consumer of energy and the Department of Defense is responsible for 80 percent of it. And finally, because the military tries to make decisions based on evidence and has a proven capacity to solve problems in partnership with the private sector. The U.S. Army already has 126 renewable-energy projects under way.
I’m proud of the role that Hillary played in 2007, as a senator from New York and member of the Armed Services Committee, along with Senator John Warner, Republican of Virginia, a former secretary of the navy, in urging the Pentagon to assess the potential of climate change to threaten our security and to include its potential problems in making strategic plans. President Obama has supported this focus, and the Defense and State Departments have worked together to encourage Congress to adopt strong legislation to reduce the threats posed by global warming.
In a more immediate sense, the Pentagon also has a deep interest in proving that good energy policy can save money, because of the cuts in defense budgets the end of our involvements in Iraq and Afghanistan will bring and because more military-budget cuts will be necessary to stem the government’s long-term debt problem.