As Congress debates the American Clean Energy and Security Act, and the Obama administration begins to implement its stimulus program, we are likely to see unprecedented levels of spending on clean-energy investments. In two complimentary studies, PERI researchers examine the impact of these investments on employment, macroeconomic indicators, and the well-being of low-income families in the U.S. These economic benefits of clean-energy investments would be in addition to their major significance in fighting global climate change.

“The Economic Benefits of Investing in Clean Energy: How the Economic Stimulus Program and New Legislation Can Boost U.S. Economic Growth and Employment,” by Robert Pollin, James Heintz, and Heidi Garrett-Peltier, (commissioned by the Center for American Progress) assesses the cumulative economic impact of the clean-energy aspects of these two policies, and estimates the employment effects of the $150 billion in annual public and especially private clean-energy investment they are likely to encourage. This study also considers the potential impact of these policy initiatives on long-term economic growth.

“Green Prosperity: How Clean-Energy Policies Can Fight Poverty and Raise Living Standards in the United States,” by Robert Pollin, Jeannette Wicks-Lim, and Heidi Garrett-Peltier (co-commissioned by Natural Resources Defense Council and Green For All), considers these employment and other policy effects in terms of their ability to raise living standards for lower-income workers and families. This report shows that investments in clean energy can benefit lower-income families first by expanding job opportunities, and also by lowering household utility bills through energy efficiency investments and transportation costs by making public transportation more accessible.

The two reports together significantly strengthen our understanding of how a transition to a clean-energy economy can play a major part in lifting the U.S. out of the current recession, and setting us on a course towards both environmental sustainability and raising living standards, especially for lower-income workers and their families.

>> Read more about “Green Prosperity"
>> Read more about “The Economic Benefits of Investing in Clean Energy"
>> Learn more about PERI's Green Economics research

In the summer issue of New Labor Forum, James Heintz describes the fiscal situation facing the states: shortfalls totaling an estimated $99 billion, which may rise to over $350 billion by 2011. He explores the causes of this crisis, and recommends a set of long-run changes to state fiscal and tax policies to reduce volatility and lessen dependence on the federal government to bail states out of their crises. These include eliminating short-sighted incentives to cut taxes, expanding rainy day funds during flush periods and restricting their use, dedicating volitile sources of funds to rainy day funds, and enhancing cooperation between states to increase the corporate income tax base.

>> Download "The Grim State of the States"

In this recent article published in The Economist’s Voice, Robert Pollin, James Heintz, and M. Ahmed Diomande of the New York State Senate Finance Committee  argue that the private ratings agencies —Moody’s, Standard & Poors, and Fitch—operate within a perverse incentive system. These agencies are hired by the very companies they purport to evaluate without bias, and financial companies tend to hire ratings agencies which  they deem likely to rate their instruments highly. The authors recommend a simple correction: a public ratings agency (which reserves the category of “not ratable” for any instrument they deem too complex to accurately assess) staffed by civil servants whose performance is evaluated on the basis of the correlation between their ratings and actual market performance over time.

>> Download “Why U.S. Financial Markets Need a Public Credit Rating Agency”
>> Read more about PERI’s Financial Regulation research

We are happy to announce that Heidi Garrett-Peltier has been promoted to a PERI Research Fellow as of June 1. Garrett-Peltier is completing her Ph.D. in Economics at the University of Massachusetts, where she earned her Master’s Degree in 2006. Her dissertation includes a nation-wide survey of firms in the renewable energy and energy efficiency industries, which will significantly enhance our understanding of the structure of a clean-energy economy. Over the past few years, Heidi has become a national expert in this area; she is a co-author of “Green Recovery: A Program to Create Good Jobs and Start Building a Low-Carbon Economy” as well as a number of other recent and forthcoming studies in PERI’s green economics program.  

Garrett-Peltier’s research is highlighted in her recent commentary for Dollars & Sense, where she explores the job creation potential of energy-efficient building retrofitting.  

>> Read “Saving Energy Creates Jobs” in Dollars & Sense