Gerry Canavan

the smartest kid on earth

Obama Contrarianism Contrarianism

with 3 comments

Jaimee says this article about Green Recovery provisions hidden in the stimulus bill made her feel better about Obama (and about the future) than she’s felt in months, and though it’s setting the bar even lower I tend to agree.

For starters, the Recovery Act is the most ambitious energy legislation in history, converting the Energy Department into the world’s largest venture-capital fund. It’s pouring $90 billion into clean energy, including unprecedented investments in a smart grid; energy efficiency; electric cars; renewable power from the sun, wind and earth; cleaner coal; advanced biofuels; and factories to manufacture green stuff in the U.S. The act will also triple the number of smart electric meters in our homes, quadruple the number of hybrids in the federal auto fleet and finance far-out energy research through a new government incubator modeled after the Pentagon agency that fathered the Internet.

The green industrial revolution begins with gee-whiz companies like A123 Systems of Watertown, Mass. Founded in 2001 by MIT nanotechnology geeks who landed a $100,000 federal grant, A123 grew into a global player in the lithium-ion battery market, with 1,800 employees and five factories in China. It has won $249 million to build two plants in Michigan, where it will help supply the first generation of mass-market electric cars. At least four of A123’s suppliers received stimulus money too. The Administration is also financing three of the world’s first electric-car plants, including a $529 million loan to help Fisker Automotive reopen a shuttered General Motors factory in Delaware (Biden’s home state) to build sedans powered by A123 batteries. Another A123 customer, Navistar, got cash to build electric trucks in Indiana. And since electric vehicles need juice, the stimulus will also boost the number of U.S. battery-charging stations by 3,200%. (See how Americans are spending now.)

“Without government, there’s no way we would’ve done this in the U.S.,” A123 chief technology officer Bart Riley told TIME. “But now you’re going to see the industry reach critical mass here.”

The Recovery Act’s clean-energy push is designed not only to reduce our old economy dependence on fossil fuels that broil the planet, blacken the Gulf and strengthen foreign petro-thugs but also to avoid replacing it with a new economy that is just as dependent on foreign countries for technology and manufacturing. Last year, exactly two U.S. factories made advanced batteries for electric vehicles. The stimulus will create 30 new ones, expanding U.S. production capacity from 1% of the global market to 20%, supporting half a million plug-ins and hybrids. The idea is as old as land-grant colleges: to use tax dollars as an engine of innovation. It rejects free-market purism but also the old industrial-policy approach of dumping cash into a few favored firms. Instead, the Recovery Act floods the zone, targeting a variety of energy problems and providing seed money for firms with a variety of potential solutions. The winners must attract private capital to match public dollars — A123 held an IPO to raise the required cash — and after competing for grants, they still must compete in the marketplace. “They won’t all succeed,” Rogers says. “But some will, and they’ll change the world.”

The investments extend all along the food chain. A brave new world of electric cars powered by coal plants could be dirtier than the oil-soaked status quo, so the stimulus includes an unheard-of $3.4 billion for clean-coal projects aiming to sequester or reuse carbon. There are also lucrative loan guarantees for constructing the first American nuclear plants in three decades. And after the credit crunch froze financing for green energy, stimulus cash has fueled a comeback, putting the U.S. on track to exceed Obama’s goal of doubling renewable power by 2012. The wind industry added a record 10,000 megawatts in 2009. The stimulus is also supporting the nation’s largest photovoltaic solar plant, in Florida, and what will be the world’s two largest solar thermal plants, in Arizona and California, plus thousands of solar installations on homes and buildings.

Obama made headlines today (and garnered some well-deserved praise) with a call for an additional $50 billion in stimulus money for infrastructure spending. This is a strategy for November that could stem the bleeding, especially as the Republicans double-down on their strategy of deliberately tanking the economy. I just don’t know why we’re only reading about it now, in Time, two years after the fact. Why isn’t he touting this aspect of the stimulus? It’s the best and most important part.

Written by gerrycanavan

September 6, 2010 at 10:01 pm

3 Responses

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  1. i can definitely see the importance of the green recovery provisions (though i thought obama’s been talking up green job and renewables stimulus for a while now? i think it’s just not been big news because the spending has been so slow, that and rupert murdoch). but the 50 billion ‘front load’ is dinky enough that i think we have to read it primarily as a pr move, to counterbalance the concessions he’s given republicans in the form of tax credits and write-offs for big capital (which, thankfully, are not just cuts).

    i also see you’ve avoided mentioning the ‘race to the top’ stuff.

    traxus4420

    September 7, 2010 at 4:17 am

  2. but the 50 billion ‘front load’ is dinky enough that i think we have to read it primarily as a pr move, to counterbalance the concessions he’s given republicans in the form of tax credits and write-offs for big capital (which, thankfully, are not just cuts).

    That’s mostly true, and the sad thing is it’s still an improvement over the apparent strategy of a few weeks ago.

    “i also see you’ve avoided mentioning the ‘race to the top’ stuff.”

    Yes, that stuff is generally useless, or worse. Talk to my teacher union friends to get more; I certainly have…

    gerrycanavan

    September 7, 2010 at 8:19 am

  3. […] Obama contrarianism contrarianism contrarianism: $50 billion dollars in new infrastructure spending is a nice but inadequate idea […]


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