The Washington, D.C.-based Center for American Progress has released a report which presents an expansive policy agenda for strengthening people, creating jobs and growing the economy.
The 252-page report, titled “300 Million Engines of Growth,” covers a lot of ground from education to job creation, workplace standards, infrastructure rebuilding, research and development investments in science and technology, etc.
The most interesting part is the section (pg 138) on energy policy, which neatly summarizes the problem and suggests highly specific policy ideas to tackle a well-defined goal.
The report states that the United States is starting to feel the high costs of climate change, coupled with the volatility of energy prices and imported oil. The U.S. imported $313 billion worth of oil last year, and only six percent of the electricity used nationwide came from renewable sources.
Use of renewable energy has doubled from 2008-2012, and CAP suggests it can be doubled again by 2020. The policy ideas they offer would reduce oil imports by half and increase the share of electricity from renewable energy sources to 12 percent by 2020, putting the U.S. on course for a 35 percent target by 2035.
The following policy ideas are suggested for achieving these goals:-
Carbon Tax – Implement a $25/ton carbon tax on large polluters, starting with power plants, in order to motivate them to invest in limiting pollution.
The report says it would reduce power plant emissions by 20 percent in 10 years. It would also raise $500 billion in revenue over the next decade. CAP proposes to invest $200 billion of the tax revenue into R&D for advanced clean energy technologies.
Financing for Renewable Energy Projects – CAP suggests the government should directly spend $9 billion for R&D through the DOE, to be invested in both the public and private sectors. They ask for tax incentives, including a longer extension of the wind energy PTC which is set to expire at the end of the year. They also call for a “Green Bank” and more public market financing tools so that clean energy projects can raise funds.
Infrastructure for Renewable Energy – The report mentions that, as per a McKinsey & Co. estimate, the U.S. wastes $130 billion in energy annually. Smart grids, better storage, energy efficiency retrofits and and other measures can eliminate this waste to a large extent.
Specifically, CAP suggests three programs to reduce this waste, including a $6 billion Home Star plan that offers rebates to home-owners for energy efficiency retrofits; a similar $6 billion Building Star plan for businesses and residential buildings; and a $4.9 billion Rural Star loan program to fund rural electric co-operatives so that can lend money to customers for retrofits.
Put together, these programs would create 250,000 jobs and reduce carbon emissions equivalent to taking 4.6 million cars off the road.
Read the full “300 Million Engines of Growth” report from CAP – Download (pdf)