Using Energy Efficiency to Support the Economic Recovery

Charles Ebinger, Director, Energy Security Initiative, at the Brookings Institute in Washington, D.C., has written an op-ed on how energy efficiency could be a key tool for ensuring that “the economic recovery leaves no one behind.”

While President Obama pitches the Economic Stimulus Plan on Capitol Hill today to critics who view the USD 150 billion environmental and clean energy components of the stimulus plan as wasteful spending, some like Mr. Ebinger argue that the energy efficiency and conservation parts of the plan need to be further expanded.

Ebinger argues: “Despite notable advances in the efficiency of energy production, transportation and consumption, President-elect Obama needs to make energy efficiency and conservation the cornerstone of both his economic stimulus program, which is designed to revitalize the American economy and create American jobs, and his Energy Efficiency Plan, designed to address climate change while improving the security of the nation’s electricity grid. These programs, taken in tandem, will provide jobs, put more money in consumer wallets, reduce the need for additional expensive generating capacity to meet peak load electricity demand, and reduce carbon emissions.”

Ebinger argues that those making $50,000 or less could benefit even more than they currently would under the programs in the planned stimulus.  He outlines a few ideas:

  • “Seize all abandoned buildings in the United States’ four poorest cities (Miami, Newark, Cleveland and Detroit) – on a pilot program basis and under a new eminent domain federal statute to be passed by Congress – and retrofit them with the most commercially cost-effective energy efficiency construction, lighting and appliance technologies. Upon completion, lease them for 40 years to credit-worthy families making under $50,000 per year at rates not to exceed 15% of after-tax family income indexed for inflation. 
  • Refine a model program in effect in Berkeley, California by enacting a low-interest (2%) 30-year loan for up to 100% of the cost of home and small business energy retrofits that will save at least 35% of total energy utilization against the average consumption of the previous 3 years. Such loans would lead to new technological innovations as local small business entrepreneurs respond to these incentives by creating jobs, putting money into consumers wallets from the energy savings achieved, and revitalizing work in communities across the nation.
  • Enact a low-interest loan (5% indexed for inflation for a period of 30 years) under a new “Revitalize American Home and Hearth Act,” with the government fronting the capital cost for the installation of solar roofs on medium and large-scale commercial buildings that can obtain an energy savings of at least 25% based on the average consumption during the previous three years. The commercial firms would rebate to the government not only the interest, but 25% of the energy savings during the life of the loan.”

Read the policy statement and other ideas
Also, check out a transcript from a recent event: “Remaking the Suburbs in a Carbon-Constrained World: A Case Study of Maryland’s Purple Line

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