Green Billions Fertilize the U.S. Economic Stimulus Package

WASHINGTON, DC, February 20, 2009 (ENS) – The $787 billion American Recovery and Reinvestment Act signed into law Tuesday by President Barack Obama will not only create jobs, it will create green jobs, the new U.S. EPA administrator said today.

“Through the President’s stimulus package, green initiatives will play a significant role in powering economic recovery,” said EPA Administrator Lisa Jackson.

The act specifically includes $7.22 billion for projects and programs administered by the EPA. These programs will protect and promote both green jobs and a healthier environment, Jackson said.

Christina Romer, chair of the White House Council of Economic Advisers, has estimated that the recovery package will save or create 3.5 million jobs over the next two years. Jackson says many of those will be jobs that protect and enhance public health and the environment.

“EPA’s portion of the plan will create good, sustainable jobs that help produce cleaner drinking water, purer air, environmentally friendly urban and rural re-development, and reduced greenhouse gases,” said Jackson. “This is a perfect example of economic growth and environmental protection working hand in hand to the benefit of all Americans.”

Clean drinking water (Photo courtesy Washington State Department of Health)

The Clean Water State Revolving Fund and Drinking Water State Revolving Fund will receive a total of $6 billion – of that total $4 billion will be used help communities with water quality and wastewater infrastructure needs and $2 billion will be spent on drinking water infrastructure needs.

Of the total, $1.2 billion, or 20 percent, must be used for green infrastructure, such as stormwater mitigation, water or energy efficiency improvements or other environmentally innovative activities.

“This is an unprecedented amount of money for clean water and rivers,” said Betsy Otto, vice president of strategic partnerships for the nonprofit organization American Rivers. “It’s a real investment in more sustainable water infrastructure for the future, and it will boost health, safety and quality of life in communities across the country.”

The stimulus package contains $100 million for competitive grants to evaluate and clean up former industrial and commercial sites called brownfields.

Diesel emissions reduction projects will be funded with $300 million for grants and loans that will be disbursed to regional, state and local governments, tribal agencies, and nonprofit organizations.

The EPA will receive $600 million for Superfund hazardous waste cleanup and $200 million for cleanup of petroleum leaks from underground storage tanks.

The new law is geared for performance and unprecedented transparency, said Jackson. Preference will be given to projects that can be started and completed expeditiously, and EPA intends to quickly move designated funds to states, she said. All funding will be monitored by EPA’s Inspector General, which will receive $20 million for oversight and review.

The Apollo Alliance, a coalition of labor, business, environmental, and community leaders, says the new law contains $86 billion in clean energy and green-collar job programs.

In addition, the Alliance points to $27.5 billion in road and highway construction funds, much of which state transportation department directors say will be used to repair infrastructure and not on building new highways.

The stimulus measure also contains $830 million for the National Oceanic and Atmospheric Administration, a portion of which will be used for river restoration projects.

The U.S. Fish and Wildlife Service is to receive $115 million for priority construction, repair, habitat restoration and other activities on public lands the agency governs.

The U.S. Fish and Wildlife Service will also receive $165 million for priority critical deferred maintenance, capital improvements, habitat restoration and other activities on Service properties.

The Natural Resources Conservation Service will get $290 million for structural and nonstructural watershed infrastructure improvements, including purchase and restoration of floodplain easements.

Wild and Scenic Manistee River in Michigan (Photo courtesy U.S. Government)

And the U.S. Forest Service will receive $650 million for priority road, bridge and trail maintenance, including related watershed restoration and ecosystem enhancements projects.

“The clean water, drinking water, and river restoration provisions in the bill will create jobs, improve the nation’s rivers and clean water supplies, and save communities money,” said Otto. “This kind of investment represents a sea change, and will ensure that the nation is better prepared to meet the water challenges of the 21st Century. These provisions are a down payment on a better future and will improve the lives of all Americans.”

Kevin Eber of the National Renewable Energy Laboratory says the measure includes $16.8 billion for the Department of Energy’s Office of Energy Efficiency and Renewable Energy. He calculates that the funding is a nearly tenfold increase for the agency, which received $1.7 billion in fiscal year 2008.

While the bulk of the new EERE funding will go into direct grants and rebates, $2.5 billion will support EERE’s applied research, development and deployment activities, including $800 million for the Biomass Program, $400 million for the Geothermal Technologies Program, and $50 million to increase the energy efficiency of information and communications technologies.

The act also directs the Department of Energy, DOE, to analyze the nation’s electrical grid to determine if significant potential sources of renewable energy are locked out of the electrical market by a lack of adequate transmission capacity. DOE must then provide recommendations for achieving adequate transmission capacity.

An additional $400 million will support the establishment of the Advanced Research Projects Agency-Energy, an agency to support innovative energy research.

The economic stimulus act also stipulates that $5 billion will go towards the Weatherization Assistance Program, and the act increases the eligible income level under the program, increases the funding assistance level to $6,500 per home, and allows new weatherization assistance for homes that were weatherized as recently as 1994.

A complementary measure in the act provides $4 billion to the Department of Housing and Urban Development to rehabilitate and retrofit public housing, including increasing the energy efficiency of units, plus an additional $510 million to do the same for homes maintained by Native American housing programs.

An additional $400 million will support efforts to add electric technologies to vehicles.

The act also directs $2 billion in EERE funds toward grants for the manufacturing of advanced battery systems and components within the United States, as well as the development of supporting software.

Toyota hybrid display at an auto show allows visitors to see all the components of a hybrid-powered vehicle. (Photo courtesy NREL)

The battery grants will support advanced lithium-ion batteries and hybrid electric systems. Another $300 million will support an Alternative Fueled Vehicles Pilot Grant Program, and an additional $300 million will support rebates for energy efficient appliances, while also supporting DOE’s efforts under the Energy Star Program.

The act also stipulates that $3.2 billion will go toward Energy Efficiency and Conservation Block Grants, which were established in the Energy Independence and Security Act of 2007, but were not previously funded, Eber explains.

The grants will go toward states, local governments and tribal governments to support the development of energy efficiency and conservation strategies and programs, including energy audit programs and projects to install fuel cells and solar, wind, and biomass power projects at government buildings.

The new law includes $6 billion to support loan guarantees for renewable energy and electric transmission technologies. The funds are expected to guarantee more than $60 billion in loans but only for projects that will start construction by September 30, 2011, and that involve renewable energy, electric transmission, or leading-edge biofuel technologies.

In addition, the act provides $4.5 billion for the DOE Office of Electricity Delivery and Energy Reliability for activities to modernize the nation’s electrical grid, integrate demand-response equipment and analyze, develop and implement smart grid technologies.

The tax section of the act provides a three-year extension of the production tax credit for most renewable energy facilities, while offering expansions on and alternatives for tax credits on renewable energy systems.

Components for the wind industry manufactured at the Hodge Foundry in Greenville, Pennsylvania (Photo courtesy Hodge Foundry)

The extension keeps the wind energy production tax credit in effect through 2012, while keeping the production tax credit alive for municipal solid waste, qualified hydropower, biomass, geothermal energy, marine and hydrokinetic renewable energy facilities through 2013.

The production tax credit, PTC, provides a credit for every kilowatt-hour produced at new qualified facilities during the first 10 years of operation, provided the facilities are placed in service before the tax credit’s expiration date.

“Unfortunately,” says Eber, “the current slump in business activity means that fewer businesses are seeking tax credits, which means that renewable energy producers are having trouble taking advantage of the PTC. With that in mind, the act also allows owners of non-solar renewable energy facilities to make an irrevocable election to earn a 30 percent investment credit rather than the PTC. The option remains in effect for the current period of the PTC, that is, through 2012 for wind energy facilities and through 2013 for other qualified renewable energy facilities.”

For residential renewable energy systems, the act removes all caps on the tax credits, which equal 30 percent of the cost of qualified solar energy systems, geothermal heat pumps, small wind turbines and fuel cell systems. The act also eliminates a reduction in credits for installations with subsidized financing, explains Eber.

For businesses and individuals buying electric vehicles, the act simplifies and expands the available tax credits. For electric low-speed vehicles, motorcycles, and three-wheeled vehicles, a 10 percent tax credit is available through 2011, with a cap of $2,500.

For vehicles converted into qualified plug-in electric vehicles, a 10 percent tax credit is also available through 2011, with a cap of $4,000.

And starting in 2010, full-scale commercial plug-in electric vehicles can earn a maximum tax credit of $7,500, depending on their battery capacity. The credit will phase out over a year for each manufacturer after they sell 200,000 plug-in vehicles.

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