Deal or No Deal

Energy experts weigh in on the so-called Green New Deal.

Facing a financial sector in chaos, mounting unemployment and a crumbling economy, a newly-elected Democratic president came to Washington with a plan to significantly change the direction of the country. Sound familiar? That was 1933, but Franklin Delano Roosevelt’s New Deal—the largest public works investment the nation had ever seen—is getting a second look as everyone from Gore to Google calls for a “Green New Deal.”

Momentum sat down with Steve Kelley, a former Minnesota senator and director of the Humphrey Institute’s Center for Science, Technology and Public Policy, to get his take on what a massive investment in renewables, energy conservation, transit and infrastructure could mean for America’s future.

During this economic downturn, should President Obama and Congress really be making a near-trillion dollar public investment in a Green New Deal?

Substantially increasing the resources that we’re putting into renewable energy is critical to the country’s future. There are really two pieces. One is research into developing new forms of energy that will make us more energy efficient. Second, some things we understand reasonably well already, such as mass transit and weatherizing homes, those are all things that will put people to work now and will also put us in a much better situation in the future both economically and environmentally.

Doesn't all of this depend on consumers changing their energy consumption patterns?

When gasoline was over $4 a gallon and oil was at $125 a barrel, people did change their behaviors. One of the problems was that they had a shortage of alternative strategies available to them. So I think one of the good things about the proposed investments is that we’re going to add to the choices that consumers have in terms of saving energy. But with government policy, we’ll also need to pay attention to how we provide information to people. … There are going to be a lot of claims about what’s green or what’s energy-efficient. There’s a role for the government in making sure those statements are truthful and meaningful to people.

What's the best way to pitch a Green New Deal to the American public?

People are nervous enough about the economy overall, their jobs and the jobs of their friends, neighbors and relatives, that seeing an administration committed to putting people back to work is a sufficient argument in the short term for this investment package. The Obama administration may get some political opposition and, at that point, they may have to add some nuance to the message. But keeping the focus on jobs is perfectly fine, and if we get a “twofer” out of these investments—putting people to work and saving energy costs for the future—that’s great.

If the deal goes down, who will the winners and losers be?

In the long run, everybody will be a winner because we’ll hold down the country’s energy consumption and put our kids in a much better position from an environmental perspective. In the short run, there is a policy design challenge, though. Let’s take retrofitting or weatherizing homes. You can’t do everybody’s house all at once. So having a long-term strategy of how you’re going to ensure that middle-class and low-income homeowners and renters benefit from the program will take some time.

Do you expect climate change legislation to be part of the package?

The United States is going to have to adopt a coherent strategy for reducing greenhouse gas emissions. Even John McCain had gotten to the point of recognizing that the current market structure does not recognize the external costs related to greenhouse gas emissions. We’ve been treating the atmosphere as a global commons without paying the costs of the emissions we’re putting into it. So it’s perfectly consistent with economic theory to say it’s time to recognize the externalities. 

President Obama and Congress have a big challenge in front of them, but I’m encouraged by the fact that Rep. Henry Waxman will be chairing the House Committee on Energy and Commerce. I think it’s an indication of Congress’ willingness to move in the right direction, but it will take sustained leadership … to see real progress. We are long past the point where we should be debating each other over whether or not climate change is a problem.

What's your advice for the new administration?

I would encourage the president to move forward with some promises he made during the campaign regarding the telecommunications infrastructure; a portion of Obama’s platform was related to building a high-speed broadband infrastructure throughout the country. We currently spend a lot of money moving people from place to place physically, whereas teleconferencing, telework or distance education can, with additional investments, provide real alternatives, be more energy efficient and contribute to economic growth. One of the barriers to having that happen is that, particularly in rural areas, but it’s also true to some extent in certain metro neighborhoods, we don’t have the high-speed infrastructure yet for people to fully use these new applications.

No matter what investment decisions we make, though, any moves toward a more efficient and responsible energy infrastructure for future generations has to be a bipartisan effort to succeed.

Dear President Obama

Energy experts from the nonprofit sector, business interests and the blogosphere submit their letters of advice to the Oval Office.

Michael Noble, Executive Director, Fresh Energy

Mr. President, you’re absolutely right that the new energy economy is going to be the driver for getting our country back on track—and don’t let anybody tell you otherwise. There is a big opportunity for the federal government to make investments that would help prime the pump for the clean energy revolution. Possibilities include incentives for smart grid technology; electrification of the transportation sector; high-speed inner-city rail; renewable energy research and development; advanced biofuels; refueling stations for electric cars; a purchasing program for solar electricity and more. We have to have a new energy economy for national security reasons, for economic prosperity for our children and for protecting the climate. The faster and harder the president drives it, the better off we’ll be in the long run.

William L. Kovacs, Vice President, Environment, Technology and Regulatory Affairs Division

The federal government shouldn’t pick winners and losers. The marketplace should do it. If the federal government is going to make money available, they should make it available in an equal way. Anyone who can develop non-fossil fuel-based technologies should be able to reap the credits or benefits. The Chamber has always supported not only wind and solar, but all technologies. We’ve been supporting the stimulus packages all along, but our one concern is that you’ve got to always make sure you understand the unintended consequences. And remember, nobody is going to be as innovative as the private sector, and the private sector will get everything up much quicker than the government ever could. Government has to take the roadblocks out of the way, though, and the biggest roadblock that we have to alternative energy right now is not really funding—it’s regulation and a “not in my backyard” approach to new projects.

Maria Surma Manka, Blogger,, Senior Account Executive, Tunheim Partners

First and foremost, I want America to be as energy efficient as possible. That means our buildings, our electricity and our cars should be much more energy efficient. It’s the fastest, easiest and cheapest way for us to cut emissions, slow global warming, save money and just make our lives better overall. Next, start building the infrastructure of the future. Our electricity grid is old and obsolete and must be a priority for this administration. The challenge with the electricity sector is that we’re going to need so many more transmission lines to move renewable energy from typically more rural areas to urban centers. We need a commitment from the president and state and local officials saying “Yes, we’re willing to make this investment and build the needed infrastructure to support it.” If we talk about 21st-century energy, we need the foundation first—and that’s the grid system.