Obama/Biden Energy and Environment Plan

Everyone will be watching the inauguration today.  In honor of our new president here is the link to Obama's energy and environment plan now on Whitehouse.gov.

Happy inauguration day!

Shortchanging The Environment--Why The New Stimulus Bill Doesn't Get Us Where We Need To Be

Yesterday, the house came out with its allocation of the American Recovery and Reinvestment Plan, or the new stimulus package.  This package was supposed to be "green". It is not.

The best indication of this is that the allocation for public transit, $10 billion, was $5.6 billion less than the allocation for a $500 increase in Pell higher education grants. I do not think that higher education grants are wrong, but a $500 increase in individual Pell grants just isn't going to have the impact that, say, $26 billion in public transit funding would have for the environment, jobs, dependence on foreign oil, etc. 

The total allocated dollars for green programs is $95 billion out of $550 billion in expenditures (and another $275 billion in tax cuts). Of that:

Green Stimulus Allocations $b
Energy Transmission 32
Energy Retrofits 22
Public Infrastructure Energy Savings 31
Public Transit 10
Total 95

As the Green Wombat wrote

It’s a start, but that’s less than 7% of the entire stimulus package (or, about enough to pay for the Iraq war for five months, or somewhat more than what the federal government is spending to bail out Bank of America).

Green Wombat calculated the allocation for green as $54b, but even at my more generous $95b, it is simply not enough to be game changing.

Here is  a handy chart with all of the allocations from the New York Times blog.

Stimulating Smart Growth--Advancing the Anti-Sprawl Agenda

Kaid Benfield and the Smart Growth group at the NRDC introduced a neat visual tool for reimagining sprawl development into multi-purpose places. Using photo-editing software,

the visionaries of Urban Advantage have transformed pictures of communities from all over the country to show how they could become more pleasant, walkable neighborhoods.

There are reimagined designs for 70 communities nationwide available for browsing.

The new tool and conversations I have been watching on Twitter got me to thinking about how Obama can use the stimulus plan to stimulate smart growth development.

1. Invest in transit--One conversation on Twitter was discussing whether Detroit can be retooled to produce mass transit instead of single occupancy vehicles. While I think this might be a stretch, before WWII, the United States retooled many of its plants to make the articles for war very quickly.  I would love to hear more comments about this idea.

2. Invest in cities--The stimulus money should be invested in our urban centers, making them safer through improved infrastructure, more beautiful and sustainable through urban greening projects and more livable through pedestrian and bicycle improvements.  Beyond the built environment, Obama could also invest in schools and libraries, making these amenities rival their suburban counterparts.  This would not only make for smarter growth, but also provide jobs for women and minorities not directly benefitting from the green jobs major sectors like construction and engineering.

3. Invest in planning-- New Urban News has a great idea. Obama should invest in planning projects which would support jobs now and plan for smart growth into the future.

Some federal dollars presently used for transportation and other purposes could pay for regional planning that promotes tight-knit development and preserves open land.

4. Invest in smart code drafting--Redrafting building and zonign codes is an expensive and labor intensive process.  But, by reforming codes to make them more energy efficient and smarter, like investing in planning it would support jobs now and plan for smart growth into the future, not to mention creating a more green built environment.


Obama Stimulus Plan and The Rule of The First Dollar

I look at a lot of green building regulations, and I have devised the rule of the first dollar--regulators should be putting the first dollar of tax payer money into the most cost-effective initiative, to ensure that those initiatives that have the greatest cost-benefit calculus get funded first and most robustly. 

This week Obama has come out with some of the details of his green financial stimulus plan. In Obama's speech yesterday, as well as in his Obama/Biden plan unveilied during the campaign, he proposed

  • modernizing more than 75% of federal buildings
  • improving the energy efficiency of two million American homes

He also outlined the benefits of these programs

[S]aving consumers and taxpayers billions on our energy bills.  In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain. 

Energy efficiency efforts work with the rule of the first dollar--according to Energy Star estimates,

Compared with standard homes, ENERGY STAR qualified homes use substantially less energy for heating, cooling, and water heating-delivering $200 to $400 in annual savings. Over the average 7 to 8 years you may live in your home, this adds up to thousands of dollars saved on utility bills.

In this study, the RAND Corporation analyzed California's energy efficiency initiatives and concluded that

In California, improvements in residential energy intensity and energy prices have reduced the average energy expenditures per capita in real terms since 1980...Low-income households derive the greatest benefit from reduced energy expenditures.

RAND also noted

The most important benefit for California is the impact of energy efficiency improvements on air pollution emissions. If energy intensity in the state had remained at 1975 levels, air emissions from stationary sources in the state would be approximately 50 percent greater than current levels.

Energy efficiency measures equalled savings and environmental benefits.

The analysis with respect to greening federal buildings is similar.  According to the Alliance to Save Energy

The federal government is the nation’s single largest energy consumer and energy waster. In 2005, the federal government consumed about 1.6 quadrillion Btu (quads) of energy at a cost of $14.5 billion. This is 1.6% of all energy used in the U.S. American taxpayers pay about $4 billion annually just to heat, cool, and power the 500,000 federal buildings and facilities.

So, each dollar saved on energy on  public buildings is a taxpayer dollar saved, and a reduction in the quantity of resources requried to heat, cool, and power those facilities.

The analysis on the tax cuts, however, is not as sanguine.  According to Nobel-Prize winning economist Paul Krugman

First, if the government spends money, that money is spent, helping support demand, whereas tax cuts may be largely saved. So public investment offers more bang for the buck. Second, public investment leaves something of value behind when the stimulus is over.   

Krugman argues that tax cuts in the first year may be beneficial in providing a quick hit to the economy, whereas public works projects take time to get started, but Obama's proposal of 40% tax cuts seems like too much. Obama can see similar upfront benefits from providing food stamps and unemployment benefits, for example.  Alternatively, he could provide vouchers for energy efficiency improvements through private vendors. 

In short, green is green, tax cuts not so much.