Washington, D.C. — Earlier this week, President Biden announced his American Jobs Plan, a sweeping $2 trillion infrastructure and jobs package that would reshape the American economy by making the biggest investment in our nation’s systems in decades. In response, Consumer Federation of America wrote to key Administration officials stressing that transforming our nation’s energy sector is currently one of the most important aspects of future economic policy. “We believe that the American Jobs Plan will create jobs, lead to a more resilient electricity grid, and modernize power generation through cleaner and lower cost energy alternatives,” said Jack Gillis, CFA’s Executive Director.
The transformation of the energy sector has begun, with each year seeing increases in solar and wind energy production and a corresponding reduction in coal-fired power plants. Nevertheless, more can be done. “The transformation of the energy sector into one based on efficiency in demand and low cost, clean energy in supply, is one of the most important steps to ensuring economic growth over the next quarter century,” said Mark Cooper, CFA’s Director of Research. “The technological revolution in energy consumption and production, as well as digital communications, data processing, and advanced control technologies — all of which have been led by the United States — have set the stage for an entirely new, 21st century energy sector.”
CFA has been a long-standing supporter of the reduction of carbon emissions because of the consumer cost saving benefits inherent in energy efficiency. “New technologies supported by the American Jobs Plan will lower consumer costs directly by lowering the operating costs of energy consuming durable goods. These cost savings will increase consumer welfare (and benefit the economy) by enabling consumers to spend those energy savings on other needed household items. The result: more jobs and economic growth as this shift in spending employs more people, and new technologies create new manufacturing opportunities,” said Gillis.
Relying on clean resources will also help America’s households indirectly by mitigating the impact of energy production on public health and the environment. Historically, low-income households and disadvantaged communities have suffered disproportionately from pollution due to a lack of access to health care, and living in areas and occupying housing that is more vulnerable to pollution. “This effort will improve housing, reduce pollution, and increase access to more efficient energy consuming durables, all of which addresses the Biden Administration’s goal to improve the lives of America’s most disadvantaged people,” said Cooper.
The underlying technology tools for a new energy system are available and the capacity to expand output exists. They are not only “shovel ready,” but also provide opportunities to invest that are widely dispersed throughout the economy. The economic multiplier that results from the consumer spending money saved from lower energy bills is much larger than the economic benefit associated with the consumer spending those same dollars on energy. “Ironically, the effort to promote an energy transformation may have suffered from a history of being tagged solely as an environmental issue. While improvements in public health and the environment are critically important benefits of the transformation, the first and largest benefits are economic,” said Gillis.
CFA believes the President’s American Jobs Plan as a watershed opportunity for transforming our energy sector through reduced demand and a low cost, clean alternative energy supply that will reshape our economic policy and strengthen the economic backbone of America.