Since taking office on January 20, President Biden has begun to lay out his plan for addressing four intertwined crises facing the country: the public health crisis of the COVID-19 pandemic, the associated economic crisis, climate change, and a legacy of racial injustice traced back to our country’s earliest roots. He has signed a series of executive orders aimed at addressing these crises, including rejoining the Paris Agreement on Climate Change and outlining a whole-of-government response to climate change with a focus on clean procurement, environmental justice, and support for communities dependent on fossil fuel industries. And he has outlined plans to push two legislative packages: the American Rescue Plan, focused on immediate COVID-19 response, and the Build Back Better Plan, focused on economic recovery. While details of the Build Back Better Plan are still forthcoming, at its core is a massive investment in infrastructure, prioritizing clean energy, domestic manufacturing, and union jobs. At AEE, we have some ideas about how to get the most economic bang out of federal bucks by investing in advanced energy.
Democrats in Congress have received the call to action from the administration. There is widespread agreement among the caucus, and even across the aisle, that there remain acute public health and economic needs as part of the federal response to the COVID-19 pandemic. The House of Representatives is voting on an initial pandemic response package this week and the Senate is expected to offer its own version shortly, with Congressional leaders aiming to send a final bill to President Biden by mid-March.
There is also widespread support for supporting economic recovery by investing in infrastructure, and committee chairs in both chambers are moving forward with crafting a second package. House leaders have said that their sweeping tax, infrastructure, and clean economy bills from last year provide a starting point. The Senate Environment and Public Works committee held its first hearing on “Building Back Better” this week. However, despite broad support for economic recovery measures in general, there is much less agreement about how much to spend, how to distribute the funds across a range of programs, what else should or should not be included, and whether or not Democrats should attempt to pass something with bipartisan support.
Although it may be difficult to come to consensus, Congress should prioritize an economic recovery package that includes investments in a range of advanced energy technologies and services. These investments will not only help us decarbonize our electricity and transportation sectors, they also provide an opportunity to boost our economy, create jobs, and address racial and economic injustice.
Recent stimulus reports from AEE show that investing public funds in a range of advanced energy technologies would produce at least a four-to-one return on investment in terms of jobs created, local tax revenue, consumer savings, and overall economic development. And targeting a significant portion of these funds to marginalized communities – including low-income communities, communities of color, communities dealing with legacy and present-day pollution, and communities historically or currently dependent on the fossil fuel industry – will ensure that the jobs and economic development go to those areas of the country that need them most.
In a recently released list of priorities, we outlined six categories of investment that we see as key for advanced energy to boost economic recovery:
- Improving grid flexibility and resilience to extreme events by investing in technologies like energy storage, microgrids, controls and sensors, and power system modeling software.
- Saving energy and money by funding energy efficiency upgrades for schools and homes and training for efficiency installers and contractors.
- Creating more good-paying jobs in the United States by rewarding companies that manufacture domestically and adhere to strong labor standards.
- Accelerating electric vehicle deployment by helping consumers afford electric vehicles, providing funding for charging infrastructure, and helping electrify school and transit buses.
- Expanding access to tax incentives for advanced energy resources by making them technology-neutral, refundable, and available in advance.
- Getting more advanced energy resources onto the grid by investing in transmission and interconnection and supporting the expansion of organized wholesale markets.
As Congress puts together an economic recovery package, lawmakers should prioritize investments like these that provide an immediate economic stimulus, maximize opportunities to reduce emissions, and deliver the benefits of the advanced energy transition to historically disadvantaged communities. 2020 was a difficult year, but 2021 has the potential to be brighter, as vaccinations increase, the economy rebounds, and we make strong investments that will move us toward a more equitable and sustainable future.
Download AEE’s priorities for economic stimulus investment in advanced energy by clicking below.