Economic Outcomes of The Apollo Economic Recovery Act

The Apollo Economic Recovery Act is a comprehensive quick start economic stimulus strategy to accelerate development of wind, solar, biofuels, and other clean sources of energy, create or retain nearly 2 million new jobs, and restore America’s economic strength. Enacting this proposal would produce significant economic results for the nation.

REBUILD AMERICA CLEAN AND GREEN

Green cities and communities by investing in the Energy Efficiency and Conservation Block Grant (EECBG) Program.

• Cost: $6 billion

• Jobs Created: Every $1 million spent on energy efficiency retrofits generates about 10 person years of employment in direct installation of efficiency measures and another three to four person years in the production of relevant materials. In addition, every direct construction job supports 1.9 indirect jobs in other sectors. A $6 billion investment in building energy efficiency, therefore, would create or retain an estimated 60,000 direct construction jobs and 24,000 direct manufacturing jobs, as well as an additional 183,600 indirect jobs in other sectors.

  • A total of 464,000 construction jobs have been lost in the past year.

  • Large-scale energy efficiency retrofit projects could quickly absorb unemployed construction workers.

  • The Renewable Energy Policy Project estimates that solar projects create approximately 32 person-years of employment per megawatt (MW) of electricity, and that wind projects create 4 person-years of employment per MW.

  • American Solar Energy Society estimates that $3.2 billion was invested in renewable energy by federal, state, and local governments in 2006, creating 6,900 direct jobs and 8,970 indirect jobs.

For More Information: News Release Apollo Economic Recovery Act — The Full Proposal The New Apollo Program Signature Stories

• Residential and commercial buildings are responsible for 40% of all US energy consumption.
• With a relatively simple set of upgrades, home and building owners can achieve 15-35% energy savings. Industry estimates show that upgrades leading to this level of energy efficiency pay for themselves in realized savings within 3 to 5 years.
• A $1 billion investment in energy efficiency upgrades could generate up to $378 million in energy savings in the first year.
• Every dollar spent on energy efficiency results in approximately $20 injected back into the economy in avoided energy costs and private-sector investment. This translates to approximately $120 billion in ongoing economic stimulus from energy efficiency programs.

2. Fix the Production and Investment Tax Credits for the renewable energy industry by making them refundable through 2009 or by allowing credits to offset taxes paid over the previous ten years. These changes will allow renewable energy projects to go forward even during the current credit liquidity crisis.

• Cost: Since the number of people who will take advantage of these tax credits is unknown, it is difficult to estimate the cost of this amendment.
• Jobs Created: In making their argument for the extension of PTC and ITC in the recent Continuing Budget Resolution, the American Wind Energy Association estimated that 116,000 existing jobs would be lost if the wind and solar industries are unable to use these credits.

3. Fully fund the Weatherization Assistance Program at $900 million, to provide immediate weatherization and lower energy bills for low-income households.

• Cost: $900 million
• Jobs Created: According to the Department of Energy, weatherization creates 52 direct jobs for every $1 million in WAP funding, as well as additional jobs for subcontractors and material suppliers. A $900 million investment in WAP would create 46,800 direct jobs in construction and installation, and an additional 88,920 indirect jobs among suppliers, retailers, and service providers.
• Justification: Increasing funding to $900 million could support the retrofit of as many as 350,000 to 400,000 homes, and would be an important first step toward meeting the goal of establishing a sustained program to weatherize 1 million homes each year. Low-income homeowners are particularly vulnerable to rising energy costs. Energy bills already account for about 14% of a low-income families’ gross income, and for many energy costs may account for 20% or more. The second leading cause of foreclosures for low income homeowners is unanticipated utility bills. The Weatherization Assistance Program reduces low-income energy bills by an average of 21 percent—$358 per year, based on 2005 spending levels. Additionally, by Department of Energy calculations, WAP produces $3.71 in energy and non-energy related benefits for every $1.00 in federal funds invested. This translates to over $3.3 billion in energy savings and other benefits for low-income communities.

4. Invest $10 billion in upgrading the transmission grid.

• Cost: $10 billion
• Jobs Created: Investing in grid upgrades would create or retain over 130,000 jobs, including 52,000 direct and 79,000 indirect jobs. Many of these jobs would be union jobs paying family-supporting wages and providing good benefits.
• Justification: We currently lose six to nine percent of all the power that enters the grid, costing the U.S. economy nearly $20 billion annually. Congestion and blackouts cost consumers another $79 billion a year. The Department of Energy estimates the cost of one hour of power loss for industrial customers as $72,000 for a telephone ticket sales system, $2.58 million for a credit card processor or as much as $6.48 million for a commercial brokerage. Grid upgrades will ease congestion and increase capacity, sending 50 to 300 percent more electricity through existing corridors.This will enable expanded renewable energy generation, use of plug-in electric vehicles, and more efficient production processes for industry.

5. Invest $1 billion in “smart grid” and “smart metering” demonstration projects to make the electric grid more efficient and reliable, and provide a way for consumers to understand the real-time costs of electricity and better manage their own energy usage.

• Cost: $1 billion

• Jobs Created: For every $1 million invested in smart grid installation, 5.2 direct jobs and an additional 7.9 indirect and induced jobs are created. Therefore, a $1 billion investment in smart grid demonstration projects would create or retain a total of 13,100 jobs, including 5,200 direct jobs and 7,900 indirect jobs throughout the economy.

• The Center for American Progress estimates that, at a $1 billion funding level, similar projects will result in more than 1 million houses and businesses being installed and integrated into a utility-level operating system.

6. Invest $1 billion in carbon capture and storage demonstration projects on coal-fired power plants.

• Cost: $1 billion

• Jobs Created: FutureGen project will create a total of more than 3,000 jobs, including 1,300 immediate direct jobs in construction, 510 jobs in operations, and 1,225 indirect jobs in manufacturing, transportation, and other sectors.

7. Invest $6 billion in ready-to-go public transit projects across the country, including intra-city rail, regional rail systems run by Amtrak, and bicycle/pedestrian facilities that connect transit options.

• Cost: $6 billion

• Jobs Created: The Surface Transportation Policy Project estimates that, for every $1 billion in federal dollars spent on new public transportation projects, nearly 51,300 jobs are created.A $6 billion investment in ready-to-go transit projects would create or retain more than 246,000 jobs, including 59,000 direct jobs and more than 162,000 indirect jobs.

• Transportation is the second largest component of the American household budget, but this number drops to 9 percent or lower in areas near transit hubs.

• Transit projects tend to generate nine percent more jobs per dollar spent than road and bridge repair and maintenance projects, and nearly 19 percent more jobs than new road or bridge projects.  A Cambridge Systematics study estimated that each $10 million in transit capital investment yields $30 million in increased sales. A $6 billion investment in transit infrastructure could increase sales by $18 billion, with further increases once projects are in operation.

8. Fix bridges and roads that are crumbling across America.

• Cost: $8 billion

• Jobs Created: The Federal Highway Administration estimates that every $1 billion in federal dollars spent on maintaining and repairing existing bridges and roads supports a total of 34,779, including 11,921 direct construction jobs and 22,858 indirect jobs. Additionally, the Surface Transportation Policy Project estimates that, for every $1 billion spent on federally-aided highway resurfacing projects, some 10,421 person-years of construction jobs are generated. By investing $8 billion in fix-it-first projects, over 278,000 jobs would be created or retained, including 95,000 direct construction jobs and 183,000 indirect jobs.

MAKE IT IN AMERICA

America’s manufacturing sector is central to our economic success. Targeted investments in this sector can shore up existing firms and keep them from closing their doors by helping them retool to produce greener and more efficient products; they can also help these firms become more “energy smart” and productive.

1. Provide $25 billion in loan guarantees for retooling and retraining, so that firms can transition to producing products and component parts for the clean energy and energy efficiency sectors; and for industrial efficiency upgrades such as combined heat & power systems.

• Cost: Approximately $4 billion

• Jobs Created: In general, approximately five full-time component manufacturing jobs are created for every $1 million of investment in renewable energy systems. Additionally, three to four building material manufacturing jobs and five energy-efficient appliance manufacturing jobs are created for every $1 million invested in building energy efficiency systems. A $25 billion investment in clean energy manufacturing would immediately create or retain 125,000 direct manufacturing jobs in the U.S. Additionally, the Economic Policy Institute estimates that every direct manufacturing job supports 2.9 indirect jobs in other sectors. This translates to an additional 362,500 indirect jobs in supply chains, transportation, and services created by the manufacturing loan program.

• Justification: The U.S. has lost more than 3.8 million manufacturing jobs since 1998, due to mergers, bankruptcies, outsourcing, automation and globalization.

2. Invest in the Manufacturing Extension Partnership network, which provides critical regional support to manufacturing firms that are struggling to retool, to retrain workers, and to take advantage of new clean energy opportunities.

• Cost: $200 million

• Jobs Created: Based on calculations by Dr. Susan Helper of Case Western University, an investment of $200 million in the MEP would create or retain 30,000 manufacturing jobs and reach an additional 6,000 manufacturing plants.

• As a direct result of MEP activities, the agency calculated its FY2005 client impacts at 17,453 jobs created and 35,766 jobs retained. Further benefits to clients included $6.2 billion in increased and retained sales, $1.3 billion in cost savings, and $2.2 billion in new client investments in modernization.

3. Provide incentives to cities and states to replace aging buses and rail cars with new American-made clean energy vehicles.

• Cost: $8 billion

• Jobs Created: A study by Cambridge Systematics estimates that a $10 billion transit capital investment results in approximately 47,000 direct jobs in durables manufacturing, as well as over 208,000 indirect jobs. An $8 billion investment in new clean-energy transit vehicles, therefore, could create or retain up to 37,600 direct jobs in vehicle manufacturing, and an additional 167,000 indirect jobs.

• Justification: Incentives to invest in clean energy public transit vehicles doesn’t just reduce emissions, they also create good manufacturing jobs. For example:

  • A similar policy in Canada, requiring that transit vehicles bought with public dollars contain at least 25% Canadian content, was projected to result in about 80,000 direct and indirect jobs.

  • After expanding their manufacturing facility in 2000, Chance Coach of Wichita, Kansas doubled their capacity and built 320 buses, trolleys, and shuttles in 2002. Chance Service Corps employs over 200 people, and contributes $15 million a year to the local economy.

  • Siemens Transportation Systems of Sacramento, California is currently spending $26 million to expand its manufacturing facility in response to a $277 million contract with Salt Lake City’s Utah Transit to build 77 light rail cars over the next four years. This is in addition to a $184 million contract with the Denver transit system to build 55 light rail cars. The plant currently employs 550 people, and plans to add an additional 200 employees by early next year.

RESTORE AMERICA’S TECHNOLOGICAL LEADERSHIP

1. Provide an additional $2 billion in clean energy research and development funds to the Advanced Research Projects Agency for Energy (ARPA-E), allowing the agency to better address the nation’s most urgent energy needs through research and the rapid development of cutting-edge, transformational technologies.

• Cost: $2 billion

• Jobs Created: This program will support the next generation of high-tech jobs for scientists and engineers seeking to expand and improve clean energy technologies.

2. Establish a National Energy Innovation Fund, initially funded at $1 billion, to commercialize the most promising clean energy projects and technologies currently emerging from our nation’s laboratories.

• Cost: $1 billion

• Jobs Created: This program will support the development of new clean technology businesses, some of which have the potential to expand and create new jobs in a variety of sectors.

TAP THE PRODUCTIVITY OF THE AMERICAN PEOPLE

1. Invest in the Green Jobs Act, giving grants to national and state training programs (including community colleges and union apprenticeship programs) to prepare skilled workers for green-collar jobs and providing “pathways out of poverty” for low-income workers.

• Cost: $250 million

• Jobs Created: Green Jobs Act programs would train 70,000 workers in the first year, representing an investment in their skills for participating in the rapidly changing and increasingly green economy.

2. Provide additional investment to the Service and Conservation Corps program to create a “clean cnergy” civilian service program providing job readiness and a chance to give back to the country through projects focused on making low-income homes more energy efficient.

• Cost: $300 million

• Jobs Created: It is estimated that the Clean Energy Service Corps will support the participation of 25,000 young adult Corpsmembers in its first year. An additional 200,000 seniors will mobilize as full- and part-time Corpsmembers and volunteers during the first year of the program. Finally, over 600,000 students per year will engage in community-based service learning and volunteer projects coordinated by the CESC.

3. Invest to immediately provide 25,000 Clean Energy Tomorrow annual scholarships, at $10,000 each, to help students, in these tough economic times, to pursue undergraduate degrees in science, math, or engineering. These scholarships will help give America the homegrown talent needed to build the new clean energy economy.

• Cost: $250 million

• Jobs Created: 25,000 students would receive support for pursuing undergraduate degrees in high-tech fields.

Endnotes and Sources:

Rogers, Joel. Seizing the Opportunity (for Climate, Jobs, and Equity) in Building Energy Efficiency (COWS, December 2007).