President Obama’s economic stimulus plan will be debated by the Senate this week, after a House version of the plan passed last Wednesday, largely along party lines (244 to 188—see the roll call here). Embedded in the House version’s $48.9 billion allotment for energy and water programs—programs that have seen their budgets stagnate or dwindle over the last 8 years—is $18.5 billion provided to the Department of Energy for energy efficiency and renewable energy programs, as well as $8 billion to cover subsidy costs of federal load guarantees for renewable energy systems and electric transmission projects and $4.5 billion to modernize the nation’s electricity grid.
The budget authority covers the 2009-2019 period, with the expectation that most of the funds provided will be spent within the next seven years, as programs and institutions take time to scale up their efforts to match their much expanded budgets.
The investment in renewables, an increase of nearly 10 times the 2009 budget of approximately $1.9bn, comes as a more than symbolic gesture that the new president sees green development not only in the context of short-term economic recovery (though a $4.5 billion investment in the Army Corps of Engineers is reflectives of President Obama’s campaign promise to create green collar jobs) but as an immediate step towards building a low-carbon infrastructure.
Investment into renewable energy R&D has declined steadily in the United States since its post-oil crisis peak in 1973. As public investments fell, the private sector has largely followed suit, leading to a steady decline in American renewable energy innovation, as evidenced by a drop in patents in key renewable sectors.
But President Obama has pledged to double renewable energy capacity in the next three years, and if all goes well in the Senate this week, it appears he will have the funds to back it up. But is doubling the capacity of a sector making up just 6% of the total US energy consumption sufficient?
Obviously, scaling up will take time. Public funding renewable energy R&D now fulfils an essential role in providing financial incentives for technological breakthroughs that are still too risky for private investment. But there are technologies that are market ready, or nearly so, now that if implemented at a large scale could go a long way towards creating a low-carbon economy.
The verdant hues of President Obama’s stimulus plan are a commendable break from recent history and a very encouraging sign that the US is serious about a clean energy future. But as this is an opportunity to define the starting point of what is perhaps a new era of American energy, so it is one that will set the trajectory for a long time coming. To fulfill both promise and need for a truly green economy, the US must match its investment with policy to usher its fledging renewables sector into the market for energy quickly, efficiently, and comprehensively.