Turning the virus into a virtue — for the planet

First things first — we need to get the coronavirus pandemic under control and save lives. But as we work our way out of this global health emergency and begin shoring up our battered economy, there is a great opportunity to turn the virus into a virtue for the planet — and put people back to work. 

Let’s leverage the public and private investment we are assembling to rescue the economy to also address climate change, a crisis that will continue to ravage the world when we defeat the virus.

Here are four immediate steps to take:

Clean energy stimulus — I was a member of the Obama-Biden transition team that first assembled the $90 billion clean energy stimulus package that in just a few years weatherized one million low-income homes, financed Tesla’s purchase of a shuttered car plant to manufacture electric vehicles, backed the first five U.S. solar photovoltaic projects bigger than 100 megawatts, and helped fund the world’s largest carbon capture facility at a coal plant. With a recession at hand, let’s put another package together – and fast. 

One way to start is to put the approximately $40 billion remaining in the DOE clean energy and advanced vehicle loan programs back in gear. DOE has been sitting on the money for three years, with only one loan to date. The program has an admirable track record in more than 30 investments (despite the well-publicized Solyndra strikeout). At a moment when the economy is reeling, there is no excuse for sitting on $40 billion in this successful program, particularly when there are multiple “shovel-ready” projects ready to put people back to work.

Tax credits — Tax incentives are one of our most effective federal policy tools to accelerate the deployment of clean energy. However, many clean energy tax credits are phasing down, and new ones need to be adopted.

Pending bipartisan House and Senate bills, for example, would establish the same credit currently offered to solar energy for batteries and other electricity storage systems. Another pending bill would reauthorize the 30 percent investment tax credit for offshore wind projects, unlocking vast quantities of low-carbon electricity off our coasts.

As in the last financial crisis, we should also give project developers the option to take a direct cash grant instead of having to find an outside investor who can “monetize” a tax credit, tough to do at a time when taxable income is scarce.

There is another tool worth mentioning: Master Limited Partnerships (MLPs) have enabled low-cost financing of hundreds of billions of dollars of oil and gas pipelines. However, when Congress originally authorized MLPs, clean energy projects were excluded. Pending bipartisan House and Senate bills would change that, and there couldn’t be a better moment to do so.

Infrastructure spending — There have been discussions for years about a trillion-dollar federal program to fix up the nation’s highways, bridges, sewers and other deteriorating infrastructure. This list ought to include major infrastructure projects vital to accelerating clean energy. 

We need a vast expansion of our electric grid, for example, to move wind energy from the plains states to east coast markets and solar energy from the desert southwest to west coast cities. 

Only about 3,000 of the nation’s 90,000 dams produce electricity; some non-powered dams could be powered, while some powered dams could be upgraded to produce even more low-carbon electricity. 

We also need electricity storage projects — pumped storage, batteries etc. — to “firm up” intermittent solar and wind. In addition, we should vastly expand the nation’s network of electric vehicle charging stations. 

In 2019, President Trump and House Speaker Nancy Pelosi (D-Calif.) had a promising but short-lived discussion about a $2 trillion infrastructure bill. Let’s get those discussions going again and really stimulate jobs – and more than a few with a green tint.

Energy technology commercialization — The federal government has had an on-again off-again commitment to moving key energy technologies out of the lab and into the marketplace. In earlier times, our government spent heavily to commercialize civilian nuclear power, back the first utility-scale wind turbines, and support early carbon capture demonstrations. Today, however, there is an all-too-pervasive view in Washington D.C. that federal support for energy innovation should go no further than a university or government lab.

Just a decade ago, we had a better approach and a compelling and bipartisan idea. In 2009, the House Energy and Commerce Committee voted 51-6 to establish the Clean Energy Deployment Administration (CEDA), a federal agency with a full set of financial tools to leverage private sector investment in commercializing and deploying clean energy technologies, from offshore wind projects to small modular nuclear reactors to advanced carbon capture facilities. The Senate Energy Committee voted to do the same, and one of the CEDA bill sponsors, Sen. Lisa Murkowski (R-Alaska), is now the committee chair.

Two years ago, President Trump signed bipartisan legislation creating a new federal financing agency to invest in foreign projects involving U.S. companies. If we can support U.S. companies abroad in this way, we ought to do the same for U.S. energy companies at home — and CEDA is the right vehicle.

We face a global health crisis and we must be laser-focused on resolving it. But as the coronavirus also takes down our economy, let’s use our response to address an even more potent — albeit slower-moving — threat called climate change.

Dan Reicher is a lecturer and senior research scholar at Stanford University. He was previously director of climate and energy initiatives at Google and Department of Energy assistant secretary and chief of staff during the Clinton administration.