A Turning Point For Green-Energy Stimulus Projects?

Van Jones visiting a solar-powered emergency station i i

hide captionIn August, Van Jones visited a solar-powered emergency station set up by the Las Vegas police department. While serving in the Obama administration, Jones promoted the creation of "green jobs" as a way to boost the economy and clean up the environment. Stimulus funding for such projects is expected to begin in earnest this fall.

Ethan Miller/Getty Images
Van Jones visiting a solar-powered emergency station

In August, Van Jones visited a solar-powered emergency station set up by the Las Vegas police department. While serving in the Obama administration, Jones promoted the creation of "green jobs" as a way to boost the economy and clean up the environment. Stimulus funding for such projects is expected to begin in earnest this fall.

Ethan Miller/Getty Images

The resignation of Van Jones, President Obama's "green jobs czar," comes just as the pace of stimulus bill funding for the green-energy projects he championed is set to pick up.

Jones stepped down suddenly over the weekend amid controversy surrounding statements he had made prior to joining the administration — including comments derogatory of Republicans. The best-selling author of a book on the "green collar" economy, Jones was a prominent and vocal advocate of mixing job creation with environmental policy, a vision that made its way into the stimulus bill that Obama signed in February.

When the bill was first passed, there were high hopes for the wide range of green-energy jobs it could help generate. The Energy Department was authorized to spend $36.7 billion, much of it on clean-energy programs. To date, however, only about $461 million has been spent. But officials say the pace will really start to pick up this fall.

Energy Department officials say this is by design. While some parts of the stimulus bill, such as tax cuts and extended unemployment benefits, were aimed at jump-starting an economy in free fall, the energy portion has a longer-term focus.

"Right now we're getting judged on job creation and how quickly we're getting money out into the economy," says Matt Rogers, the senior adviser for Recovery Act implementation at the Energy Department. "Ten years from now, we will get judged on whether the project delivered enduring value for the American people."

In the 2009 fiscal year, only 1 percent of the stimulus funds being spent will go toward energy and the environment. By 2012, that figure will rise to 17 percent.

"The stimulus looks at first blush like a road-building make-work program, simply because of the staging of the deadlines," says Mark Muro, the policy director for the Metropolitan Policy Program at the Brookings Institution. "But it will continue to change form and profile as different portions of this come online. It's good that it isn't all short-term stimulus, because with the economy looking like it's beginning to recover, it would be odd if there was no sequencing of longer-term investments."

'Next Three Months Will Be The Most Exciting'

When it comes to energy, the lag time comes because the programs are often starting from scratch. First, officials had to write broad guidelines for programs that ranged from solar and wind power technology to the next-generation smart electrical grid. Then companies needed time to devise their own plans and submit applications, which had to be reviewed by Energy Department officials and a slate of outside experts.

The various grants and projects are just now being awarded. "The next three months will be the most exciting time for the clean-technology industry in the last decade," says Rogers. "Every 10 days to two weeks, we will have another big block of funds going out the door."

That process has already begun. In August, for example, the Energy Department announced $2.4 billion in grants going toward advanced battery and other technologies for electric vehicles. The companies are currently negotiating the final contract details with energy officials.

"The money starts going in their hands this month," says Rogers. "Then they start hiring people and procuring equipment, so these projects really start biting in November and December, and are at full rate in January and February."

So far, the Energy Department has awarded some $9.9 billion in loans and contracts, so the overall spending figures should keep rising throughout next year.

Some programs are also moving much faster. The stimulus bill provides some $5 billion for home weatherization and other energy conservation projects, much of it for low-income families. That money is being funneled through existing state programs, meaning that states already have access to nearly 50 percent of the total funding.

"Energy efficiency actually can produce a lot of jobs," says Charles Ebinger, who directs the energy security program at Brookings. "If you train people, in a month's time, you can have a lot of good people doing this."

That was the theory promoted by Jones, who told attendees at a clean-energy conference in Washington, D.C., in February that "every dollar spent on green jobs is going to be out there working double time, triple time."

Of course, it is still too early to judge how efficiently the money is being spent. But experts will be watching closely, particularly because the Energy Department does not have as much experience at managing many of these new kinds of programs.

"It has not really historically been in the renewable or energy-efficiency business," says Muro. "It's a Cold War agency that needs a new mission and has a fighting chance to make that transition."

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