1. An Egalitarian Program for Building a Clean Energy U.S. Economy Bob Pollin and Jim Boyce Labor Network for Sustainability Conference Washington, DC March 11, 2014 1

2. Building a Clean Energy Economy is Good For Jobs and Economic Growth Nothing original in this – Comparable to case for military-based industrial policies Ruttan: Is War Necessary for Economic Growth? Trade-offs are real but limited and manageable Specific to regions/communities/industries – Can compensate regions/communities – Mazzocchi: Environmental “Superfund”for displaced fossil fuel workers 2

3. Focus on US: Meeting 2030 Emissions Reduction Target U.S. Emissions as of 2010 – 6,800 mmt from all greenhouse gas emissions – 5,600 mmt CO2 emissions from burning oil, coal and natural gas IPCC and Obama Administration Targets – 40 percent absolute decline in emissions 4,200 million metric tons (mmt) of all Greenhouse Gas Emissions by 2030 3,200 CO 2 mmt from energy-based sources – 80 percent absolute decline by 2050 1,200 mmt of emissions by 2050 3

4. How to Achieve 2030 Emissions Targets Energy Efficiency – Cutting absolute U.S. energy consumption by ~30 percent From ~ 100 to ~ 70 Q-BTUs Clean Renewable Energy – Roughly quadrupling supply from clean renewables Low-emissions bioenergy, wind, solar, geothermal, small-scale hydro From ~3.5 to ~15 Q-BTUs Non-Renewable Energy – Reduce consumption overall of oil, natural gas, coal, and nuclear power by ~ 40 percent Investment Levels Necessary – ~ $190 billion/year for 20 years; 1.2% of GDP – Most investment costs recouped in 3-5 years Based on mainstream sources: National Academy of Sciences, U.S. Energy Department, McKinsey 4

5. Alternative Consumption Scenarios 5

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8. Job Creation through $190 Billion/year Clean Energy Program 4.2 million jobs in total job creation – New Capital Expenditures in Efficiency and Clean Renewables – Operations and Maintenance for Clean Renewables Mostly low-emissions bioenergy 2.7 net job creation – after subtracting job losses through retrenchments in coal, oil and natural gas. Roughly equal to 1.5 percent employment in 2030 labor market 8

9. Clean Energy Policy Agenda Market-shaping Rules – Carbon Cap or Tax – Enforcement of Clean Air Act Direct Public Spending – Energy Efficiency/Renewable Public Investments and Procurement Private Investment Incentives – Feed-in Tariffs Regional Equity and Worker/Community Transition Assistance – “Superfund” for Workers 9

11. Who pays?

12. Carbon pricing – via a cap or a tax - converts an open-access resource (the biosphere’s carbon absorptive capacity) into property. It therefore poses the fundamental question: Higher fossil fuel prices = payment of rent for use of the carbon sink. Who owns the sink functions of the environment?

13. CAP-AND-GIVEAWAY (aka Cap-and-Trade) GOVERNMENT FOSSIL FUEL FIRMS CONSUMERS $100 billion Free permits

14. CAP-AND-SPEND (& Carbon tax) Auctioned Permits $100 billion GOVERNMENT FOSSIL FUEL FIRMS CONSUMERS

15. CAP-AND-DIVIDEND (& Fee-and-Dividend) Auctioned Permits $100 billion GOVERNMENT FOSSIL FUEL FIRMS CONSUMERS $100 billion

16. Environmental Legislation and GDP Growth Alternative estimates of GDP growth under Waxman-Markey cap-and-trade legislation CGE models – Wide range of assumptions – American Council on Capital Formation/National Association of Manufacturers Model with “high cost” estimates Worst-case scenario 16

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18. Conclusion for Reaching 2030 -35 Greenhouse Gas Emissions Goal Energy Efficiency: Overall U.S. energy consumption needs to fall from ~ 100 – 70 Q-BTUs Renewables: Clean renewable energy needs to supply 15 Q-BTUs Oil: 21 Q-BTUs for automobiles Remaining 34 Q-BTUs: Mix of natural gas, nuclear, coal Job Creation: Investing in clean energy transformation will be substantial source of net job creation GDP Growth: Clean energy transformation will not significantly affect overall GDP growth 18