Report: Investing in Clean Energy Would Boost NY’s Economy
A 40% reduction in New York’s carbon emissions by 2030 is “extremely ambitious, but it is achievable,” says PERI Co-Director Robert Pollin
SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries coming to you from Baltimore. Imagine a carbon free New York City. Well, we cannot promise you a totally carbon free New York City but we can plot a way to get us partially there by 2030. A new study shows that transitioning to clean energy could actually be sound economic policy for the state of New York, and an investment that will certainly pay off.
The report titled “Clean Energy Investments for New York State” published by the Political Economy Research Institute, PERI and co-authored by Robert Pollin, Heidi Garrett-Peltier and Jeannette Wicks-Lim, all regular guests here on The Real News Network. We’ve been covering, of course, the US presence in Bonn, demanding more action on climate change. Several delegations from the US are there, attending the Bonn meetings to state we are in.
They want to show that in spite of President Trump’s decision to withdraw from the Paris Agreement, many states, many cities, many municipalities and a lot of people in the United States are certainly in on the Paris Agreement. On to talk about the New York State report is Robert Pollin. He is a distinguished professor of Economics, and Co-Director of the Political Economy Research Institute at the University of Massachusetts, Amherst.
His books include “Green Growth,” and “Greening the Global Economy,” and of course, this report which we will be putting a link to beneath the player, so you can have access to all of this. Bob, I thank you so much for joining us today.
ROBERT POLLIN: Thanks for having me on, Sharmini.
SHARMINI PERIES: So, Bob, this is a very in depth report, and we are not of course able to discover all of what is in it, so I do hope people go and read it. But let’s start with the goal of reducing C02 emissions by 100 million tons by 2030. Why was this amount chosen and why is 2030 so important?
ROBERT POLLIN: There’s nothing magical about 2030. The point is we have to take really concerted action, like starting yesterday, we should have started years ago. The 2030 goal is just a round number. Basically, what we’re saying is reduce emissions by 40% relative to today by 2030, which is extremely ambitious but as we tried to argue, it is achievable. It’s also basically what the Cuomo administration itself has said is its own goal.
So, this is entirely mainstream within the discussions going on in New York. The difference is what we wrote is a proposal for actually achieving the goal, whereas the Cuomo administration has made some positive steps but is nowhere close to having a viable policy for achieving its own goal.
SHARMINI PERIES: Now Bob, in terms of the actual policies, what needs to be done in practice to make this possible?
ROBERT POLLIN: Well, the first thing is we need more money moving into clean energy investments. Meaning, renewable energy, solar wind, geothermal, and secondly, into energy efficiency. So, right now the level of investments in renewable energy and energy efficiency are maybe at 20% relative to where they need to be. So, we need a lot more money going into that. Some public money and some private money. Now, to get there, we need to establish a polluter fee that will generate the funds necessary to underwrite private investments and expand public investments. That’s step one.
SHARMINI PERIES: How will residents of New York State reduce their carbon emissions and how will it affect their lives? Will we be living differently?
ROBERT POLLIN: For the most part, I mean, in terms of your consumption of energy and how we use energy on a day-to-day basis for electricity, for refrigerators, for cars, for lights, we won’t see much difference at all. Including, I want to emphasize, in terms of costs. If anything, costs will be going down between now and 2030. Why? Even with the polluter fee, costs will go down, emphasize, costs will go down. Why? Number one, when we substitute renewable energy, solar, wind, for a fossil fuel energy, the costs right now are at rough parity.
So, if you look at the Department of Energy’s own statistics, and that’s the Department of Energy under Donald Trump, their own statistics show renewable energy is at rough cost parity with fossil fuel energy. On top of that, if we invest in energy efficiency, making our cars more efficient, making our homes more efficient, that means we get the same amount of use of light bulbs or refrigerators but at a lower cost. So, if anything, costs are going to be coming down, not up, and we will be able to get the same energy. The only difference meaning that we will not be destroying the planet in the process of turning on our light bulbs.
SHARMINI PERIES: Now Bob, you refer to the major contribution that needs to be made here as an investment, estimating that the investment will be six to seven billion dollars per year until 2030. So, if there is going to be money generated and you’ve explained where it should come from, but whenever people talk about investment, they want some concrete payoff, so what are the payoffs?
ROBERT POLLIN: Well, the total investment that we estimate per year is 30 billion, in the range of 30 billion a year, which is about 1.8% of New York State’s average GDP between now and 2030. The six to seven, you’re right, that’s the amount we estimated is coming out of the polluter fee, and we say that you can get about seven billion dollars per year in the polluter fee. Some of that is rebated back to low income households to cushion them against any possible cost increases, though I don’t think there will be.
But beyond that, the rest can be public investments and subsidizing the private investments. So, what benefit do we get from those investments? Well, number one is obviously in terms of climate stabilization. New York State alone is obviously not going to solve climate change but New York State can be a model of what’s necessary in order for emissions to come down dramatically in the coming years. So, that’s the big thing.
Number two, it will create jobs, and invest in anything, you’ll get jobs. If we invest in the range of 30 billion dollars a year on clean energy, on energy efficiency and renewable energy, you will get about 150,000 new jobs in the state of New York. On top of that, as I said, costs will not be going up. They probably want to go down but I’m trying to be cautious here in saying according to the evidence we’ve looked at, starting with the evidence from Trump’s own Department of Energy, we will not see costs go up.
What we need, though, is initial investments to build out the renewable sector and raise efficiency. So, those are the returns people are going to see through this green investment program.
SHARMINI PERIES: Bob, how are you selling this report to the legislators in Albany?
ROBERT POLLIN: Well, as far as I can tell, in New York State, maybe even to the strongest extent anywhere in the country, they’re already committed on paper including the governor. I mean, they have this renewable energy vision, they have a clean energy plan, and program, they have money put aside, they have an infrastructure. They are down and committed. I mean, after Trump announced that the US was going to pull out Paris at the end of last May, the very next day Governor Cuomo and said, “We’re not doing that in New York. We’re committed to our green energy program and emission reduction.”
So, I don’t think we have to convince anybody in the state of New York as to the necessity and importance of this. What we have to convince them is that the policies that they are enacting now are nowhere close to adequate to achieving their very own goals. We need to have much more aggressive policies. The polluter fee is one thing but we also have to have a support for the clean energy system. We have to have, in other words, a market built out for supporting green energy. We have to support investments in energy efficiency. We have to make it affordable, we have to make it easy for people.
We have to make it easy for people to put solar panels on their roofs, and put them in their communities. We have to build out wind farms. Those are the things that need to be happening, and they are happening in New York, just nowhere close to what’s necessary.
SHARMINI PERIES: Right. And then, the other big elephant in the room is the jobs, and you’ve done a lot of work in this area about greening the global economy and the ways in which we can still put people to work in the sector, and transition them. So, when it comes to New York, how do we achieve that according to this report?
ROBERT POLLIN: Well, like I said, invest. If you invest in improving the efficiency of buildings, you will create a lot of jobs, because you need people to show up and retrofit a building. That’s one thing. If we’re going to put solar panels on people’s roofs, or in factory roofs, that’s going to create a lot of jobs, and it’s not just the people putting the solar panels on the roof. It’s the people transporting the solar panels, it’s the people fixing the solar panels, it’s the people that are delivering lunch to the work site. It’s the lawyers, it’s the accountants, it’s the secretaries.
So, those are all the jobs that we’ve estimated. We’ve also estimated the job losses that will come when we contract the fossil fuel industries in New York State and those are pretty small. There’s only about 13,000 people in the whole state that are at all attached to the fossil fuel industry, and of those, if we’re saying it’s a 40% contraction, we’re really looking at about 5,000 people, and those 5,000 people, the jobs will be reduced between now and 2030. Well, that’s about 500 a year, and we estimate it was more than 400 a year we’re going to be people reaching retirement age.
They’ll voluntarily retire, and we’re going to have to deal with job displacements only less than 100 people a year. So, this is entirely achievable. For those 100 people a year or thereabouts, yes, we need to find them new jobs, but that shouldn’t be hard in a labor market the size of New York State.
SHARMINI PERIES: Bob, in terms of job creation which is the other side of this equation, one is to make investments, the other is to create good clean jobs for the people of the New York State, so clean energy policies are estimated to generate according to your report, between 145,000 to 160,000 jobs for the state of New York, with a generous compensation for workers between 63,000 and 114,000 per year. This is pretty good. How will all this happen?
ROBERT POLLIN: Yeah. Well, it’s 150,000 jobs or thereabouts. Obviously we don’t know exactly, but all we did was we looked at the activities that go into investing in solar energy, investing in wind energy, retrofitting buildings, putting in new heating and cooling systems in factories. We got really into those details and then we just looked at the pay scales for people that are already in those jobs. These are jobs for regular people, normal jobs that people already have, just doing it for the green economy, as opposed to sustaining the fossil fuel economy. This is not some esoteric project that is just for environmentalists. This is a great opportunity across the board throughout New York State.
SHARMINI PERIES: Bob, how is it being received so far? I know it’s just out, as a report, and you’re just talking about it in the media and to legislators, but how is it being received?
ROBERT POLLIN: So far very good, yes. I was in Albany two days ago and yeah, we had very favorable responses. Actually, more favorable than I was initially anticipating and in the press so far, there’s been pretty good coverage, and it’s been generally quite favorable. At least we’ve got people thinking. Again, this is a state which is already on, committed. They’ve already said they want to get emissions down by 40%. They already said they want to have 50% of their electricity generated by renewable energy. They already said they want to reduce consumption in buildings by 23%. This is all as of 2030. This is official state policy, so really all we’re doing, we’re pushing it a little further than that, but the most important thing we’re doing is saying, “Well okay. Let’s get serious. If this is what you’re committed to, here’s the path to achieving.”
SHARMINI PERIES: All right, Bob. All the best with the report, and thank you so much for joining us today.
ROBERT POLLIN: Thanks very much for having me.
SHARMINI PERIES: And thank you for joining us here on The Real News Network.