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December 18, 2009
Clean Jobs Creation Needs Private Investment to Succeed
    by Robert Kropp

A Five-Point Plan issued by the Apollo Alliance details a number of opportunities for private investors in the creation of jobs that help combat climate change. Second of a two-part series.

The simultaneous crises of climate change and recession may well threaten the fabric of the global economy, but the inescapable necessity of having to deal with both may offer significant opportunities as well. In recent weeks, both the Global Climate Network (GCN) and the Economic Policy Institute (EPI) have released ambitious proposals for the creation of millions of jobs, many in the clean energy sector.

While neither report specifically addresses the role of private investment in the creation of jobs in a low-carbon economy, it is an undeniable fact that in the US at least, government spending cannot singlehandedly bankroll the financial means for such a massive retooling of the nation’s economic priorities. Private investment has to play a crucial role.

A Fi ve-Point Plan published earlier this month by the Apollo Alliance, a coalition of labor, business, environmental, and community leaders, provides many effective recommendations for private investment in a low-carbon economy. The plan calls for the investment of $60 billion in transportation infrastructure, energy efficiency and renewables, and domestic clean energy manufacturing. spoke with Matt Mayrl, policy director at Apollo Alliance and principal author of the plan, about the Alliance and some of the specifics it espouses.

“The Alliance was founded in 2003, and is a broad coalition of diverse interests that is advocating for investment in the clean energy economy and the creation of millions of jobs that stems from that investment,” Mayrl said. “A primary focus of ours has been how we can build a clean energy manufacturing industry here in the US.”

The Alliance’s plan points out that “China, Japan and South Korea are poised to out‐compete the United States for dominance of clean energy markets by outspending the U.S. at least three‐to‐one on clean energy infrastructure and technology,” and states, “It is imperative to create jobs at scale and re‐establish the U.S. as a leader in the global clean energy marketplace.”

The plan then proceeds to propose a number of investments that it contends will create 1.2 million jobs, including over 400,000 jobs over the next two years.

In order to leverage private capital through short‐term investment and job creation in efficiency and renewable energy, the plan calls for amending the Qualified Energy Conservation Bond (QECB) program, to increase the tax credit to 100%. Even if only one-half of the full $3.2 billion in QECB bond allocations are utilized, the plan estimates that the amendment could leads to the creation of 17,000 jobs.

By investing $500 million in the creation of a federal financing authority, which would stimulate private investment in the installation of energy efficiency and renewable energy systems, 59,500 jobs could be created in 2010 alone, with an additional 178,500 jobs to be created over five years.

The creation of a federal financing authority is a component of the Clean Energy for Homes and Buildings Act currently under consideration by the US Senate. The Alliance’s estimates assume that “funds would be issued over a four‐year period and that federal credit support would leverage private funds 10:1, creating total public and private investment of $20 billion.”

Private investment in the creation of clean energy jobs would also be encouraged by the establishment of the Clean Energy Deployment Authority (CEDA), which would be funded by existing loan guarantee funds from the US Department of Energy, as well as an additional $10 billion in new federal funding. According to the Alliance, CEDA would constitute a long‐term job creation strategy that would fund a wide variety of clean energy technologies.

In addition to the proposals for encouraging private investment included in the Alliance’s plan, Mayrl referred to the Advanced Energy Manufacturing Tax Credit (MTC) authorized by the American Recovery and Reinvestment Act (ARRA), which, he said, “Had an initial authorization of $2.3 billion, which would support an additional $5.4 billion in private investment.” President Obama’s proposal, announced on December 16, for an expansion of the tax credit to $5 billion would, according to Mayrl, “Provide for an additional $15 billion in capital investment.”

The Alliance’s plan also called for the authorization of $30 billion in a revolving loan fund to help small‐ and medium‐sized manufacturers produce clean energy components and become more energy efficient. The fund, as proposed by Senator Sherrod Brown of Ohio, is known as the Investments in Manufacturing Progress and Clean Technology (IMPACT) Act, and was integrated into the Waxman-Markey Act passed by the House of Representatives in June.

According to the Alliance’s plan, the IMPACT Act has the potential for the creation of up to 2.5 million jobs, including 680,000 direct manufacturing jobs.

Additional proposals from the Alliance include allocating $625 million for funding the Serve America Act, which reauthorizes and expands national service programs and would result in the creation of 31,250 jobs and “create service job opportunities that build skills and put young people to work performing community service.”

Also, transportation investments that rehabilitate existing infrastructure would create 1,100 jobs for each $1 billion that is invested.

In announcing the release of the plan, Phil Angelides, chairman of the Apollo Alliance, said, “While we must take immediate action to create jobs, these actions must be combined with comprehensive energy and climate policies that encourage public and private investment in the clean tech sector.”

For investors, including sustainability investors who have long considered investment in clean energy to comprise part of their community investment mission, the Alliance’s plan offers a number of concrete proposals that expand the reach of other jobs creation reports to include the role of private investment.


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