Three Stimulus Package Priorities to Rebuild a More Equitable and Sustainable Economy

April 20, 2020 | 11:33 am
Robert Wiedemann/Unsplash
Mark Specht
Western States Energy Manager/Senior Analyst

With the COVID-19 pandemic pushing our medical system to the brink and ravaging the nation’s economy, we must respond decisively and forcefully. Without a doubt, our nation’s top priority should be shoring up our public health efforts to keep people healthy and providing financial relief to the millions of people across the country who have suddenly lost their jobs.

At the same time, our leaders must start thinking ahead, creating strategies to revitalize the economy when this public health threat begins to subside. As members of Congress contemplate various economic stimulus options, our leaders should advance measures that emphasize job creation, benefit those most impacted by the pandemic, and rebuild the economy in a way that promotes the long-term interests of society.

Stimulus measures that promote our long-term interests should not exacerbate existing problems, like climate change. For example, instead of bailing out companies that contribute the most to climate change, our economic recovery efforts should address this existing challenge by emphasizing solutions like clean energy and energy efficiency, especially since the economic crisis has already had a severe impact on clean energy jobs.

I’m not going to cover all the worthy causes that should be included in future economic stimulus packages. Instead, I’m going to highlight a few highly effective federal energy programs that, with boosted funding, could be an integral part of a stimulus package that supports jobs, saves people money, and rebuilds the economy in a more equitable and sustainable way.

Three Energy Programs for Economic Recovery

Existing federal energy programs can be leveraged to rapidly create jobs, help those most in need of assistance, and change the trajectory of our economy to achieve a more sustainable and equitable future. Three such programs, administered through the Department of Energy, are the Weatherization Assistance Program (WAP), the State Energy Program (SEP), and the Energy Efficiency and Conservation Block Grant (EECBG).

All three of these programs share similar goals: to assist states and local communities in the implementation of advanced energy solutions, particularly in underserved communities. In addition, all of these programs have a proven track record of creating jobs, reducing energy bills, and cutting global warming emissions.

Together, all of these programs form a complementary package that benefits people across America. But each of these programs takes a distinct approach to achieving their common goals.

1. Weatherization Assistance Program (WAP)

Since WAP began in 1976, the program has funded weatherization improvements in seven million low-income households, resulting in significant energy savings. Because poor-quality housing stock can lead to much higher energy usage for basic necessities like heating and air conditioning, the program funds improvements such as insulation installation, heating/cooling system repair, and upgrading lights and refrigerators to more energy efficient models. Taken together, these energy efficiency measures can drastically reduce household energy bills.

WAP funds weatherization improvements, such as insulation installation, that save households money on their energy bills.

Even before the pandemic, one in three households across the nation faced financial challenges in meeting their home energy needs. The COVID-19 economic crisis will only exacerbate this energy affordability problem. With millions of people having suddenly lost their incomes, households will face difficult choices between basic necessities, and even more people will struggle to afford the cost of energy.

WAP can help alleviate this economic pain in two ways.

First, the weatherization measures in this program save households an average of $283 each year, and the program currently reaches 35,000 homes every year. However, with boosted funding the program could reach many more, drastically reducing home energy bills for tens to hundreds of thousands of low-income households. And with broadened eligibility to include renewables and electrification, WAP would be able to advance even greater gains for the people it serves and for the country as a whole.

Second, WAP currently supports 8,500 jobs, but increased funding would allow states to ramp up the program, creating jobs that help put the nation back to work. And with new measures to prioritize employment of people in the communities receiving funds and people who are underrepresented in the home energy performance workforce, we can ensure that even more WAP benefits flow to the communities hit hardest by the COVID-19 pandemic.

In 2020, WAP received $302 million in federal funding. Congress should increase and sustain funding for the Weatherization Assistance Program to put people back to work while driving down household energy bills for families struggling to make ends meet.

2. State Energy Program (SEP)

For more than 30 years, SEP has provided funding and technical assistance to advance state-led initiatives on clean energy and energy efficiency. The program funds a variety of projects, ranging from a solar plus storage system installed on a city hall building in Southern California, all the way to workforce training in Georgia that reduced building energy usage.

SEP helped fund this solar and energy storage installation on city hall in Del Mar, California. The installation is saving the city money on energy.

The COVID-19 pandemic is slashing the tax revenue on which state budgets rely, jeopardizing state efforts to advance clean energy and energy efficiency. But with increased funding, SEP could empower states to accelerate economic recovery through job creation while continuing to pursue their innovative energy programs. For example, between 2009 and 2013, SEP supported more than 135,000 jobs and avoided global warming emissions equivalent to the annual emissions from 126 million passenger vehicles. In addition, past program evaluations have shown SEP spending to be particularly effective, yielding $4.50 in cost savings for every $1 invested through the program.

This program put people across America back to work in the aftermath of the Great Recession, and we could do that again. SEP received $56 million in federal funding in 2020. Congress should increase funding for the State Energy Program to create thousands of jobs and stimulate state investments in clean energy and energy efficiency.

3. Energy Efficiency and Conservation Block Grant (EECBG)

EECBG launched in 2009 to support energy efficiency and conservation projects in collaboration with cities, counties, states, U.S. territories, and Indian tribes. The $3.2 billion in grants administered through this program benefited more than 2,000 communities and created nearly 63,000 jobs. The grant program also produced lifetime cost savings totaling $5.2 billion, and it avoided global warming emissions equivalent to the annual emissions of 20 million passenger vehicles.

Again, in the aftermath of the Great Recession, EECBG created badly needed jobs in thousands of communities across the country, delivering significant savings to those communities. Congress should reauthorize and fund the Energy Efficiency and Conservation Block Grant program as it is a proven model for creating jobs while driving down emissions and boosting investment in communities nationwide.

Relief and Recovery

These three energy programs are all geared towards economic recovery, but we urgently need economic relief as well, and there are federal energy programs that can help with that too. For example, the Low-Income Home Energy Assistance Program (LIHEAP) assists families in paying their energy-related costs. LIHEAP did recently receive a funding boost from the CARES Act, but the program should still receive many billions more in additional funding to ensure that the people hit hardest by the COVID-19 economic crisis can continue to pay their energy bills during the crisis and throughout the aftermath.

In these horrific times, it’s difficult to contemplate economic recovery when economic relief has been, and should continue to be, front and center. But time is of the essence, and Congress must be prepared to take bold measures to stimulate the nation’s economy when the public health threat has subsided.

The three energy programs highlighted here, WAP, SEP, and EECBG, all have a proven track record of job creation, cost savings, and global warming emissions reductions. While a comprehensive stimulus package will require increased spending on many more programs than the three discussed here, boosting funding to all three of these programs—and ensuring that such funding is accessible to all communities—would play an integral role in rebuilding the nation’s economy in a more equitable and sustainable way.