Green Project

It's been quite a week for NDN in the media.

Yesterday, Fox News gave Michael Moynihan and NDN's Green Project a lot of the credit (or blame? You Decide...) for getting legislation to create a Clean Energy Investment Bank into the House. Michael also got good mentions from the Carbon Tax Center and Carbon Control News.

Rob and Simon's critical work on solving the financial crisis and keeping people in their homes was covered in The Wall Street Journal, The Associated Press (twice, here and here), The Chicago Sun-Times, The Huffington Post,  The Hill, and The Phoenix.

NDN's work on immigration reform and Hispanic issues was covered by several major news sources this week, including Newsweek, The Guardian, and NPR, as well as Fort Collins Now, The Miami New Times, HispanicTips.com, and Scoop.

The Washington Post and HispanicTips.com covered the expansion of NDN affiliate The New Policy Institute's Adelante campaign, which has new ads airing in the DC Metro area in addition to Colorado and Nevada. The Statesman also covered the campaign.

Finally, Simon is quoted in The American Prospect this week on the internal dynamics of the evolving Democratic majority in Congress.

With news coming that the Senate has loaded up the bailout bill with a number of tax provisions, including an AMT patch and crucial tax credits for renewable energy, the House vote on the proposal, should it pass the Senate, looks to be a defining moment for pay-go.

Pay-go has been the largest stumbling block in extending renewable energy tax credits – a package so popular that it recently passed the Senate with a vote of 93 to 2. Now, a bipartisan agreement by Leaders Reid and McConnell to include these provisions in the bailout bill, which is predicted to pass the Senate tonight, will only be derailed if some in the House continue to insist on pay-go.

NDN has long argued that pay-go creates far too much arbitrary, artificial rigidity in the legislative and governing processes, and this bailout serves as a perfect example. Should a bipartisan bill designed to rescue the economy on the order of $700 billion fail due to a pay-go fight over far less costly tax provisions that are partially offset, the legacy of pay-go, a provision that doubtless has limited life to it anyway, will go from murky to downright laughable.

As the economy slides into recession, one can only hope that the popularity and job creation benefits of the tax credits, especially those for renewable energy, will garner enough votes to more than offset the votes lost from pay-go proponents.

Last week, NDN Fellow and Green Project Director Michael Moynihan released an essay calling for an investment in new, clean infrastructure. Clean infrastructure investment, which includes electricity grid modernization, public transportation, renewable energy and efficiency, and a variety of other ideas, is crucial in both ensuring near-term economic growth and long-term prosperity, as we create a low-carbon economy.

Saturday in the New York Times, Thomas Friedman issued a similar call, arguing to "Green the Bailout."

The point is, we don’t just need a bailout. We need a buildup. We need to get back to making stuff, based on real engineering not just financial engineering. We need to get back to a world where people are able to realize the American Dream — a house with a yard — because they have built something with their hands, not because they got a "liar loan" from an underregulated bank with no money down and nothing to pay for two years. The American Dream is an aspiration, not an entitlement.
…

Indeed, when this bailout is over, we need the next president — this one is wasted — to launch an E.T., energy technology, revolution with the same urgency as this bailout. Otherwise, all we will have done is bought ourselves a respite, but not a future. The exciting thing about the energy technology revolution is that it spans the whole economy — from green-collar construction jobs to high-tech solar panel designing jobs. It could lift so many boats.

A national agenda focused on investing in new, clean infrastructure has the potential to begin to pull America out of the current economic downturn, enhance energy security, confront climate change, and ensure future prosperity through the creation of dynamic new 21st century, low-carbon economy. Stay tuned to the Green Project’s work on clean infrastructure moving forward.

This election cycle, many people have complained that the traditional media has not been doing its job all that well. The general complaint is that instead of giving voters the information they need to make informed and intelligent decisions, the ratings-driven mainstream media increasingly focuses on distractions and sound bites. Some have called for the reform of our traditional media; others have simply bypassed it.

We believe in engaging the non-traditional media. Here are a few of our new-media mentions from the past week:

DailyKos, The Latino Journal, and The South Chicagoan referenced our recent polls of Hispanic voters in key battleground states.

Simon and Rob Shapiro are featured in The American Prospect’s blog, Tapped, as well as Biodun Iginla’s BBC weblog, for their joint statement, “Keep People in Their Homes.” Shapiro also appears in Campaign for America’s Future.

Finally, Michael Moynihan, Director of NDN’s Green Project, has posts in The Huffington Post and Gristmill.

(Click here for a PDF version of this essay)

Yesterday, NDN Globalization Initiative Chair Dr. Robert Shapiro and NDN President Simon Rosenberg released a compelling essay that provided further analysis of and additional recommendations for addressing the worsening financial crisis. In their essay, Shapiro and Rosenberg make it clear that stabilizing the housing sector and keeping people in their homes must be a top priority of any bailout plan.

In the midst of the contentious and historic debate on the financial crisis, Congress also has been considering the need for a second stimulus package. Today, NDN Fellow and Green Project Director Michael Moynihan challenges policymakers to jumpstart the economy in a manner that both creates jobs now and helps ensure America's future prosperity through investment in new, clean infrastructure. NDN applauds Congress for its substantial progress on tax credits for renewable energy and encourages policymakers to remain focused on creating a 21st century low-carbon economy through clean infrastructure investment.  In an essay below, Michael offers six specific recommendations for a second stimulus package focused on clean infrastructure.

Such a stimulus package will begin the crucial task of accelerating our nation's development of a 21st century economy.

Accelerating the Development of a 21st Century Economy: Investing in Clean Infrastructure
by Michael Moynihan
The debate now underway in the Congress on a financial bailout is not the only important piece of business before the Congress in its waning days. With a real economic recession now all but certain, Congress is considering a second stimulus package. But at this critical moment in our nation’s history, how Congress addresses the need to get our economy moving again may be as important as whether it passes a second package. Hindsight shows that the tax rebates provided in the first package were spent mainly on foreign oil and other imported goods. A second round of rebates will do little to jumpstart the economy. They will do even less to address America’s long-term economic challenges -- coping with higher energy and commodity prices and increasing the incomes of working families who have faced stagnating incomes for years. Fortunately, there is a way to stimulate short-term demand while investing in our future. Congress should move forward on a stimulus package that includes investments in new, clean infrastructure.

Infrastructure investments have an innate appeal as stimulus measures. America’s infrastructure needs are so great, and funding so scarce, that a long list of projects are teed up and ready to go, lacking only disbursements to begin stimulating our economy while creating the basis for future growth. Infrastructure spending stays at home and, for that reason, has a higher multiplier effect than money spent on imports. And, in general, construction jobs pay well, particularly for those who lack a college education. For these reasons, Speaker Pelosi and other leading Members of Congress have included infrastructure spending measures in the packages they have proposed.

The shock to our economy this summer from soaring energy prices showed that our infrastructure needs going forward are both greater and different than they appeared until recently. America’s physical plant, from the types and location of buildings to our transportation network to the electrical grid, was not built for $4 per gallon gasoline. As we look at higher energy prices -- not just for oil, but also natural gas and coal, whose prices have steadily risen as well -- and the challenge of climate change, we must also look at retiring our nation's outdated energy-inefficient infrastructure and replacing it with a new low-carbon, efficient infrastructure that is second to none.

Travelers to Asia and the Middle East leaving from New York’s Kennedy Airport may rightly wonder which part of the world is developed and which is developing. The state-of-the-art infrastructure that China displayed at the Olympics will power immense productivity improvements in coming decades. And while the headlines are still of pollution and dependence on dirty coal, China is moving rapidly ahead with building a smart electrical grid that automatically switches power to where it is needed, investing in biofuels and electric cars, building out solar infrastructure and creating a fast-growing, dynamic economic sector. In contrast, unless we put in place incentives to retrofit or replace it, will be a drag on productivity and growth in coming decades. 

Below are six proposals NDN offers to accelerate the building of clean infrastructure now. Each of these will help get money onto the street quickly to stimulate demand, help American families solve problems related to high energy costs and build the clean infrastructure America needs to compete effectively in the 21st century. Congress should pass legislation to: 

Fund the National Infrastructure Bank to leverage federal resources to fund worthy, approved clean infrastructure projects (which would not only increase funds available to infrastructure, but also represent a vast improvement over the earmark system).

Modernize the electrical grid through use of smart computer technology and more transmission capacity, both to manage demand and move America’s tremendous wealth of wind and solar power to where it is needed.

Provide tax credits for Americans to winterize their homes as the cold weather approaches.

Provide tax credits for the purchase of Energy Star appliances to reduce demand for electricity.

Provide aid to states and cities to expand mass transportation service and perform maintenance on overburdened systems.

Provide a tax credit to people who buy a new, fuel efficient car and take an old gas guzzling jalopy off the road, which has the added bonus of aiding the weakened automobile industry.

There are other ways for Congress to promote clean infrastructure going forward -- through funding rail, promoting green national building standards and updating our electricity regulation regime to promote distributed generation of renewable power, among other approaches. But these six proposals can help us move toward clean infrastructure now as we get the economy moving again.

Our nation now faces a critical choice: do we make 20th century investments or do we invest in a 21st century economy -- clean infrastructure, renewable energy and new skills for our workers? If Congress takes these steps, it can pass a stimulus measure that will not only create jobs and help our economy in the short term but also accelerate the creation of a prosperous 21st century economy.

Last night, the U.S. Senate passed tax credits for renewable energy, including extending crucial tax credits for solar and wind energy. NDN congratulates the Senate for mustering overwhelming bipartisan support for this legislation, and encourages the House to follow suit and deliver this legislation to the President's desk as soon as possible.

WASHINGTON (Reuters) - The U.S. Senate Tuesday approved a package to extend $18 billion in tax credits for using renewable energy sources like wind, solar and geothermal and also provide incentives to cut energy consumption.

The move, which alternative energy companies had been lobbying for all year, sent shares of solar power companies higher in after-hours trade. The delay in extending the tax credits had been a major damper on those stocks this year. The Senate was seen as the biggest roadblock after it shot down the extension eight times this year.

"Getting past what has been largely the deal-breaker in the past should be positive," Wedbush Morgan analyst Al Kaschalk said of the impact the vote would have on solar stocks.

Under the proposal, which will be part of a much bigger tax bill, the tax credit for producing electricity from wind would be extended for one year. The credit for other renewable sources, such as wave and ocean tide projects that generate power, would be extended for two years.

The residential and business tax breaks for solar energy would be extended for eight years.

"Solar is the winner here," Raymond James alternative energy analyst Pavel Molchanov said.

For more on the importance of solar energy to the American economy, read Solar Energy: The Case for Action, an extensive report released in August by NDN Green Project Director Michael Moynihan.

It appears that an agreement has been reached in the Senate on an extenders package that includes the tax credits for renewable energy.

From the Senate Finance Committee's statement:

BAUCUS, GRASSLEY, SENATE LEADERS AGREE TO MOVE CLEAN ENERGY INCENTIVES, EXTEND EXPIRING TAX CUTS, OFFER DISASTER TAX RELIEF,
PROTECT MILLIONS FROM ALTERNATIVE MINIMUM TAX

Deal combines Finance leaders’ key energy priorities with top tax issues for 110th Congress

Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) today announced an agreement with the Senate’s Democratic and Republican leadership to move legislation accomplishing the Finance panel’s remaining major objectives for the year: passage of clean energy tax incentives, the protection of millions of Americans from the alternative minimum tax (AMT), and extensions of expiring family and business tax cuts.  Last week, Baucus and Grassley unveiled a $40 billion package of clean energy tax incentives for Senate consideration this month.  Today, the Finance leaders combined key objectives of that legislation with an agreement to update alternative minimum tax rules and continue tax cuts for college tuition, state and local sales taxes, and research and development for U.S. businesses.  Senators should vote this week on amendments to replace the current text of H.R. 6049, energy tax legislation approved in the House of Representatives earlier this year.

More on the agreement here. 

U.S. Sen. John McCain’s new ad on the economy is interesting mostly because of its frighteningly weak economic fundamentals. It is similarly weak on truth – nothing new from the McCain camp, but these lies, some recycled and some fresh out of wherever they come up with this stuff, come in the policy field and not, as most of the others have been, in the personal.

The ad is called "Crisis." Take a look:

The ad promises three actions the McCain campaign would deliver on to improve the economy. The first is "Tougher rules on Wall Street." The credibility of this promise is low, as it comes from a campaign advised by Phil Gramm, who authored much of the deregulation of Wall Street that got us here to begin with, and from a man who, as the New York Times points out, "has consistently characterized himself as fundamentally a deregulator and he has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms."

The second promise is "Lower taxes to create new jobs." Now, John McCain probably honestly believes that lower taxes do create new jobs, and, functioning under the rule of Costanza, "It's not a lie, if you believe it," then perhaps McCain is not a liar. Under any other standard, however, the cause – effect relationship he posits between lower taxes and new jobs simply isn't true. One doesn't need to look into ancient economic history for proof: Under the Bush administration’s tax cuts, job growth has been far, far slower than the Clinton years of relatively higher taxes.

Finally, McCain promises, "Offshore drilling to reduce gas prices." Things get especially un-truthy for the senior Senator from Arizona here. Granting expanded leases for offshore drilling will not provide a meaningful reduction in gas prices for Americans any time soon. Period. That’s it. This flat out lie has been debunked time and time again, but McCain continues to present a cause and effect relationship that just is not true as a central plank in the rationale for his presidency. Hopefully someone asks him about it soon. (For example, in a presidential debate in 10 days.)

The lies the McCain campaign has been throwing around about everything from kindergarten, to pigs, to pigs in kindergarten have certainly caught the media's attention. But isn’t lying to the American people about what one's governing agenda will do for them even worse?

New York City -- Amidst all the turmoil in financial markets and diminished prospects for the real economy, it may seem that growth is over for a while.  No asset class looks strong.  However, one sector is continuing to boom around the world, if not the United States, namely the construction of infrastructure. In China, Spain, Switzerland and Latin America, countries are building the foundation for their future growth and prosperity. A fascinating article in the current New Yorker by my friend Burkhard Bilger on worms, the futuristic tunneling machines used to build subways and tunnels, provides a fascinating, under-the-surface tour of rail tunnels through the Alps, subway systems in Spain and China, power lines, roadways and other infrastructure remaking the global econnomy. There is only one sad note in this engaging article. The boom in infrastructure is largely passing the United States by.

As Martin Herrenknecht, the founder of Herrenknecht AG, the largest tunneler in the world, likes to point out, for every skscraper that goes up in Malaysia or Dongtan, a subway must go down to bring the people in and out. Other tunnels must carry broadband connections, electricity, water and the sinews of a growing city.  Herrenknecht makes worms from as little as four inches in diameter to bore holes for conduit to hundreds of feet long and dozens of feet wide to bore through the Alps.  And his company has hundreds of huge projects underway.  Currently, he is helping Spain build three new subway systems and dramatically expand four others. In Switzerland, his worms are tunneling literally through the Alps to make that country--from a freight moving point of view--as flat as Holland.  China is building seven entirely new subway systems. The massive urbanization underway in Asia and the developing world is leaving as a by product a giant, state of the art physical plant that will enable those regions to compete ever more effectively in years ahead. With infrastructure development largely stalled in the United States amidst a disingenous obsession with lowering taxes on the rich, our physical plant has been left to age. The decline of our plant will be an increasing competitive disadvantage in years ahead.

The poor state of US infrastructure is all the more remarkable given that we have just emerged from a huge real estate bubble. But the recently ended boom proved to be more about financially re-engineering the debt placed on buildings than engineering buildings themselves. Indeed, the recent cycle saw far less commercial construction than typical cycles. And on the residential side, the absence of clean building or energy efficient standards means that the latest round of new units are hardly state of the art. Most tragically, an absence of effective local government and any federal leadership whatsoever means that the housing that did get built in the last eight years was put up ad hoc with little thought of the infrastructure needed to sustain it. It was founded on the quicksand of low energy price expectations and cozy relations among developers and local planners. The result is the costly sprawl we see every day in America that higher energy prices have made increasingly unsustainable.

It is not too late for America to get back into the infrastructure game. House Democrats are pushing against Republican opposition to a $50 billion second stimulus with a large infrastructure component. The Dodd-Hagel bill to create a national infrastructure bank is awaiting action in Congress. Legislation to promote green bulding standards--to build an efficient instead of inefficient physical plant is part of current energy proposals.

With economic activity now soft across the board, a new federal commitment to clean infrastructure could not be more timely.  An important task of the 21st century will be to retrofit or retire this energy inefficient, high carbon infrastructure and replace it with state-of -the-art, low carbon, energy efficient infrastructure.  And with capital on the sidelines looking for safe and secure investments, the capital is there notwithstanding financial turmoil.  Our current approach to infrastructure, however, is hindering our ability to make these critical investments in our future.

In the coming weeks and months, we at NDN are going to be talking about building clean infrastructure to jump start the slowing economy and pave the way for growth in the coming century, lest the United States fall further behind.

New York City -- According to the Wall Street Journal, Democratic staffers -- as they drafted new, comprehensive energy legislation last week behind closed doors -- could be heard chanting, "drill, drill, drill."  That's right: Democratic staffers.  And at yesterday's Senate Energy Summit, Republican Pete Domenici, a supporter of drilling made a telling observation about the new drilling mania: a few months ago, he noted, he was advising supporters not to use the word drilling, but instead to employ euphemisms like "exploration." In only a few months, drilling has not only become acceptable, it has become a drumbeat in Congress.  With drilling now headlining most of the energy bills percolating in the Democratic-controlled House and Senate, it is worth taking a moment to assess how we got to this strange point and what it means.

The immediate trigger of the drilling mania were the McCain ads for drilling and the chanting of "Drill, Baby Drill" at the Republican Convention. On the Democratic side, strategists had meanwhile come to the conclusion that while drilling would neither help energy independence nor lower prices, given the traction it was gaining among the public, it might be good politics to make it less of a partisan issue.  When Senator Obama himself came out in favor of conscientious drilling, drilling became okay for Democrats to support. 

The real question, however, is why the American people have found the idea of drilling so powerful.  For the new drilling mania has come at the expense of the ideal of building a carbon free energy future as championed by Al Gore in his Moon Shot speech in August and as recently as last year, more or less by all three Presidential candidates, Senators Obama, Clinton and McCain.  Surely, fossil fuel prices are volatile and have been steadily rising for years (though they dropped 30% in the last 60 says, due in part to the pricking of a speculative bubble.)  Surely, the United States pays a heavy strategic price for our dependence on products produced by some of our least favorite countries.  And surely, fossil fuels are harming the earth's climate, probably contributing to storms such as Gustav and Ike.  Senator McCain recognized last summer that drilling was a political winner and began a wholesale retreat from his original energy positions.  But only part of the explanation for drilling mania is the relentless Republican messaging.

At the root of the primitive appeal of drill, drill, drill is a desire to return to our oil-soaked past.  While Americans seemed ready to flirt with renewables, with push coming to shove, they have sought the safety and security of the girl who brung us to the party: oil. There is only one problem with this desire to return to the inexpensive, American produced oil and gas of our past.  It is fantasy. 

At yesterday's hearing, Shell President Marvin Vodum frankly admitted that currently there are only 30 deep water rigs on earth and every one is already in use.  No new exploration will be even theoretically possible until new rigs are built.  He estimated that in 10 years the number of these expensive, high-tech rigs might double or triple. Still, the idea that 30 or even 70 more offshore rigs over the next decade will make America energy independent or have any impact on the price of oil is absurd.  The oil that lies deep offshore, a mile or more below the surface of the ocean, is more difficult and expensive to tap by several orders of magnitude than the oil that brung us to the party.  Oil industry executives acknowledge this and also know that opening up more of America's coastline and Alaska for drilling is something they have to be for but the idea won't yield a penny of net revenue--what they are in business to produce--for years.  What they really seek is relief from litigation of projects and Vodum led with this in his testimony.  But that doesn't have the emotional appeal of drill, drill drill. 

Is there any harm in a little old time affection for the fuel of the past?  Yes, if it interferes with our commitment to developing the fuels and economy of our future.  There is a huge new opportunity for all Americans in renewable energy.  A new report suggests it may produce millions of high paid jobs.  Rededicating ourself to oil, frankly, interferes with this critical transition.

The thrust of the compromise being pressed by the bi-partisan Gang of Ten, now 20, is that energy needs in the future will be diverse and we must do all of the above, oil, nuclear and renewables.  With respect to the need for diverse sources they are right.  However, the all-of-the-above approach, while it may garner votes, avoids the hard choices in allocating what are ultimately scarce taxpayer dollars between the new and old energy alternatives.

As Senator Dorgan and others observed, subsidies for oil and nuclear energy in the form of exploration credits and insurance for the nuclear industry vastly exceed that for renewables.  The incumbent technologies with their large constituencies have stable, long term subsidies in place whereas wind and solar energy have suffered from on again, off again, support.  That must change.  And, of course, as we learned last week, relations between oil companies and federal overseers at the Department of the Interior, are more than cozy (involving outright payola.)

In the next week, it is likely that legislation will come to the floor.  While drilling is likely to be part of the package, it is vitally important that Congress keeps in mind the real goal here, to wean ourselves off of dirty fuels and build the low carbon economy of the future.