As Wall Street and the American economy continue to crumble around us, it is time — now more than ever &mdash to begin building the next American economy &mdash the low carbon, clean energy economy.
Former President Bill Clinton believes that creating the low carbon clean energy economy presents the greatest economic opportunity for the United States since it mobilized for World War II. He has it exactly right. Here are three examples.
Take New York City, for example, where we have almost one million buildings. If we decided to reduce carbon emissions 30 percent in those buildings and systematically pursued that goal for 20 years, we would save tens of billions of dollars a year and create tens of thousands of jobs. It would be a whole new economy for New York to build on as it reels from the losses on Wall Street. Mayor Mike Bloomberg is going to need a strategy like this to rescue New York.
Every city in America could do the same thing. Enormous savings and a massive economic engine would result. Wholesale, retail, shipping, manufacturing and retrofitting businesses would all grow steadily to meet the need. Sales of insulation, caulking, windows, doors, furnaces, boilers, air conditioners and dozens of other products would skyrocket.
And we'd need tens of thousands of plumbers, electricians, carpenters, and contractors to make it happen.
The average American family spends 19 percent of household income on transportation. If you live near public transit, which is unusual in this country, you spend 9 percent on average, and if you live in a far suburb you spend 25 percent or more of household income on transportation. As current trends favoring sprawl continue and as energy prices rise, these spending numbers will get worse as roads grow more crowded and people live further and further away from shopping and working centers.
Imagine if we put in place a concerted effort to build transit in this country. We could return 10-15 percent of household income to peoples' pockets. We could recycle those dollars at home and create jobs and enterprises inside America's communities instead of sending our dollars overseas like we do now.
A group called Transportation America estimates that building transit systems in 78 American metro areas it has identified would create 6.7 million jobs. That's an economic stimulus path that is a smart, long term investment in America's future. Cities already making such investments have realized large cash savings for residents ($5 for every dollar invested says one study). Portland, Oregon, estimates its transit investments are saving its citizens $2.6 billion annually.
Transit investments also attract other investments. Salt Lake City, Denver, and Dallas, among other cities, can point to large inflows of capital resulting from their recent investments in public transit. In Dallas alone, between 1997 and 2007, $4.26 billion in investments are attributable to transit corridor development.
A report by Sir Nicholas Stern, former chief economist for the World Bank, estimates that clean energy development is a $500 billion global business opportunity. Here in the United States, where we consume 25 percent of global energy, this could translate into more than a $100 billion market. If we exported some of that clean energy know-how to other parts of the world it could be much more. There aren't too many $100 billion market opportunities out there, and it's one we should seize.
No one knows how long it will take to emerge from the current economic crisis, nor how hard it will be to restore the financial system to working order. Whether you prefer to call it a bailout or a rescue doesn't change the fundamental fact that both the global effort and the price tag will be massive. Still, the rebuilding provides an opportunity to chart a new path away from business as usual.
Let's put our dollars and our policies to work immediately, to create the next great American economy, based on efficient, clean energy. As we do so, we will be tackling our economic, energy, and climate crises simultaneously.
ABOUT THE WRITER
Michael Northrop is director of the Sustainable Development Program at the Rockefeller Brothers Fund. Contact him at Rockefeller Brothers Fund; 437 Madison Avenue, 37th floor New York, New York 10022-7001.