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US Coronavirus Response: 3 Principles for Sustainable Economic Stimulus

While we will get through this immediate health crisis one way or another, its wake will be felt for years, perhaps for decades. It is not too soon to recognize and begin addressing the financial hardship caused by social distancing. As restaurants, theaters, retail stores and other establishments close their doors, either voluntarily or in response to emergency orders, small businesses and workers are bearing the immediate brunt of the economic fallout.

The ripple effects threaten to tip our entire economy into recession, if they haven’t already. Millions of layoffs are expected over the next few months. Recognizing this reality, the Trump administration and Congress began discussing a massive economic stimulus bill that could top $1 trillion. The discussion came on the heels of an $8 billion emergency response plan focused on meeting immediate public health needs. Another emergency bill will provide sick leave to some employees and make free coronavirus testing more available.

As my colleague Helen Mountford pointed out from a global perspective, there will be long-term consequences from how countries boost their economies with short-term stimulus measures. We can’t just build back; we need to build back better, in ways that protect human health, grow the economy and curb climate change.

The Great Recession Offers Lessons for the U.S. Coronavirus Response

The 2009 American Recovery and Reinvestment Act provides some useful lessons.

Developed in response to the Great Recession, this statute provided economic stimulus to save and create jobs and stop further economic deterioration. While energy-related provisions were a small part of the overall package, they were nonetheless the largest single public investment in clean energy the United States has made to date.

The Recovery Act supported roughly 900,000 U.S. clean energy jobs from 2009 to 2015 and jump-started a major scale up of the American wind and solar industries, which are now directly competitive with fossil fuel power plants. The Recovery Act also prevented the U.S. auto industry from going bankrupt, drove innovation in hybrid and electric vehicles, and was accompanied by a doubling of automobile fuel-efficiency standards.

3 Ways to Help Achieve Sustainable Economic Growth in the US

Based on this experience and the need to create sustainable economic growth as well as short-term economic recovery, here are three principles that should shape how the United States structures its stimulus package in response to the coronavirus:

First, do no harm.

We must not respond to the COVID-19 crisis by putting Americans’ health at greater risk and worsening the climate crisis. That means focusing on helping workers in all affected industries, but avoiding subsidies that would increase heavily polluting activities or infrastructure investments that lock in greenhouse gas emissions for decades to come—things like leasing public lands at bargain prices for fossil fuel extraction or exempting oil and gas pipelines from environmental reviews.

Subsidizing fossil fuels would also increase air pollution from particulate matter and ozone, which kills more than 100,000 Americans every year.

The dramatic drop in oil prices from reduced travel during the pandemic and how Saudi Arabia and other international oil producers responded is likely to reduce U.S. drilling activity and cause some oilfield workers to lose their jobs. Let’s help those workers directly, such as by direct payments and extended unemployment and health benefits—not by increasing subsidies for oil production or bailing out oil companies. 

Similarly, let’s help flight attendants, gate agents and other affected workers, but let’s condition any loans to the airline industry on meeting rigorous emissions-reduction benchmarks, as eight senators recently called for.

Second, make win-win investments now.

While the bulk of any short-term stimulus bill may support incomes in a sector-neutral way, it makes sense to include measures that will create or preserve jobs by investing in “shovel-ready” projects that also reduce carbon pollution and improve public health.

For example, the clean energy tax credit package introduced in the Senate as an amendment to the American Energy Innovation Act would help preserve and expand clean energy jobs. The wind and solar industries are a smart bet, considering they were among the fastest-growing industries in the United States before the COVID-19 pandemic struck, and currently employ 350,000 Americans.

Similarly, expanded funding for energy efficiency and  weatherization assistance programs would help low-income Americans reduce their energy bills, increase employment in the buildings and construction industry — where almost 1.3 million Americans work on energy efficiency upgrades — and lower emissions from burning gas and oil.

Meanwhile, a major program to restore trees to the American landscape could put 150,000 people to work planting the seedlings that will pull millions of tons of carbon dioxide out of the atmosphere for years to come.

Third, plan major investments to jolt the economy in the right direction.

Even with a massive stimulus package to help the economy weather fallout during the next few months, chances are the economy will need another major jolt once people are able to move around freely again. That jolt needs to be planned carefully now so that it pushes the economy onto a sustainable, low-carbon path.

If we prepare now to take advantage of historically low interest rates to invest in climate-smart infrastructure, we can not only ensure that the economy does not stall out, we can accelerate progress towards a resilient and competitive clean energy economy that leaves no one behind.

For example, investing in upgrading the energy efficiency of hospitals, schools and other public buildings while powering them with renewable energy mini-grids will lower costs, clean up pollution, and ensure that this critical infrastructure is prepared for the next major hurricane or wildfire.

Similarly, replacing the nation’s 485,000 diesel school buses with clean electric buses will eliminate a source of pollution that goes directly into our children’s lungs. Buses’ batteries can be used as a large energy-storage asset that can help the grid integrate more wind and solar power.

Meanwhile we can build the charging infrastructure needed to power an all-electric fleet of passenger cars, trucks and SUVs. We can install the long-distance, high-voltage DC transmission lines needed to bring solar power from Arizona, wind power from Wyoming, and offshore wind power from North Carolina to consumers across the country.

By building this infrastructure with low-carbon concrete and steel and investing in advanced manufacturing, we can drive innovation that will position U.S. companies to compete for the $23 trillion market for climate-smart investments in emerging economies between now and 2030.

Creating a Stronger America After COVID-19

The COVID-19 pandemic is a challenge like nothing else we have faced in generations. We must move quickly to address the severe harms it has and will cause in the short-term. At the same time, we must craft our response in a way that fosters sustainable economic and social benefits that will create a brighter future for all Americans.

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