Green Economic Patriotism: The Need to Invest in America's Clean Energy Sector
Welcome! This is the first post in a regular series coming to you from the Clean Energy Leadership Institute. Our organization is devoted to training the next generation of leaders in clean energy policy. We offer a 12 week free training course to young professionals in the DC area featuring expert speakers and in-depth workshops. This channel will host blog posts from our talented membership, and occasional comments from our Fellows. The topics that will be covered here will range from federal and state energy policy to the role of investments in early stage technology development. For more information about our organization, visit www.cleanenergyleaders.org or follow us on Twitter @Energy_Leaders.
Adam James, CEO
Green Economic Patriotism: The need to invest in America’s clean energy sector
By Kara Starr and Phillipe Nassif
“Energy is important because the economy is important, the environment is important, national security is important. Energy is intimately intertwined with all three.” – John Holdren, director of the White House Office of Science and Technology Policy.
The wealthiest and most powerful nation on earth is losing out in the global pursuit of clean energy to competitors such as China and India, and there is no excuse.
In 2012, the United States spent $35 billion on renewable energy – down 37% from $56 billion in 2011. During that time, China spent an impressive $65 billion on renewable energy, 85% more than the US did. China has already instituted a carbon tax and a cap and trade plan. Two years ago, India announced a $2.3 trillion energy investment plan that emphasizes renewable energy and energy efficiency. The European Union is also beating the United States in investments and use of clean energy technologies as well as clean energy infrastructure.
A 2011 report from the President’s Council of Advisors on Science and Technology called for a major investment in energy research and development, raising the total US investments to $16 billion, up from its current level of $5 billion. Including the small amount of money spent by the private sector, the total amount spent on research amounts to 0.03%of the US gross domestic product. This is three times smaller than the amount spent by Japan, a country mired by a decade long recession In fact, Japan recognizes that their energy investment could be just the ticket to strengthening their economy.
China, India, Japan, and the European Union. The list goes on and the price of falling behind our competitors is high. The lack of appropriate investment in clean energy projects and in research and development is compromising our national security and our economic recovery, hampering overall job creation.
Sharon Burke, the Assistant Secretary of Defense for Operational Energy Plans and Programs at the Department of Defense, has spoken out on the important national security angle of clean energy investment, emphasizing that clean energy and energy efficiency have an enduring security angle rooted in the need for our country to end our foreign energy dependence. The ever-changing security environment around the world that has the US responding to humanitarian disasters, weapons of mass destruction, and special operations require lots of energy. The Army and Marine corps have documented thousands of casualties related to fuel movements in Afghanistan and Iraq, a cost far higher than necessary, and Sharon Burke notes that in order for the military to be ready to respond to missions everywhere, it is vital for us to “use energy better and use better energy”.
In addition to the risks faced by our brave men and women in uniform and our greater national security, our economic recovery can be far more robust if these critical investments are made immediately.
Our energy economy demands action similar to that of our competitors, but in American politics, it’s all about timing. While clean energy policy has remained a lackluster issue here, much can be done to enhance political support by drawing on intersecting issues that resonate more with politicians and voters. By rebranding to appeal to a broader range of domestic concerns, American clean energy can begin to catch up to our competitors’ achievements.
Let’s envision clean energy legislation under a more popular buzzword: job creation. Justifying the costs of alternative energy development can be achieved by drawing a direct link to job development. A 2013 report from the Bureau of Labor Statistics shows that “green jobs” – defined as jobs that benefit the environment or conserve natural resources – grew at a rate 4 times faster than all other industries combined between 2010-2011. One analysis of solar, wind, and geothermal energy development on public lands in the American West shows that more than 209,000 direct jobs and $137 billion in investments could be generated over the span of 20 years, if the necessary Federal support is provided. This is emblematic of the job potential being overlooked when the US ignores the potential of an entirely new and sustainable industry. How can the Federal government nurture that growth without redirecting precious tax dollars in the form of unpopular subsidies?
By simply taking fewer taxes from fledging clean energy companies via Master Limited Partnerships.
Master Limited Partnerships (MLPs) are investment structures used to promote traditional energy development with tax benefits. Renewable energy corporations are currently excluded from this tax structure. Eliminating the exclusive policy will correct unfairness and discrimination in the tax code, and opening up MLPs will put clean tech on even footing with the traditional energy industry. Cutting unfair loopholes in the tax code is a popular sentiment, and could win over those who don’t typically endorse federal assistance for renewables.
Expanding access to MLPs isn’t the cure-all to clean energy financing. It is, however, a great opportunity to allow clean energy companies access to greater resources, funding, and a chance at competing with the established energy industry. Promoting this specific policy in the same vein as more popular issues like job creation or modernizing the tax code could lead to the action desperately needed to keep our energy economy’s future bright, and has strong bipartisan support.
According to a recent poll, 77% of Americans, irrespective of political alignment, believe the United State should utilize more renewable energy sources in the future. Further, a majority of Republicans prefer clean energy as the foundation for our energy future, and believe “benefits of clean energy, such as energy independence (66%), saving resources for our children and grandchildren (57%), and providing a better life for our children and grandchildren (56%) outweigh the costs, such as more government regulation (42%) or higher energy prices (31%).” Tapping into these perspectives will be instrumental to promoting America’s clean energy agenda and allow the United States to remain competitive while improving our economic and national security.
The Clean Energy Leadership Institute is a free 12-week program designed to engage young people interested in clean energy through weekly educational seminars, professional networking, and real-world skill development. The Institute combines the best aspects of a speaker series, a skills workshop, and a professional network to provide members with a boost to their careers in clean energy.
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