President Obama’s green economics

By Derrick Rehn

obamaPresident Barack Obama recently set out a stimulus package for the ailing American economy. In it, $80 billion was earmarked for the use of furthering renewable energy usage and other measures to promote a low carbon economy. Some of that money is for things as simple as larger scale public transportation. Other portions of that money will be used to allow companies to research renewable technology such as solar power, which is considered an almost risk-free investment now. Private businesses that are not directly involved can also receive grants to install renewable technologies in their existing buildings. Even the individual consumer will receive a tax credit for buying a hybrid car.

As far as winning over American citizens (who are notoriously resistant to change), Mr Obama’s plan seems to be the right approach. By allowing business to survive and recover from the current recession by using green technologies, this will make necessary changes to the US infrastructure and allow for a sustainable future. The focus on the individual, as well as big business, will certainly attract attention and is the smartest route to take. The boons to manufacturing come in the form of grants for those who produce these green technologies. From an American’s rather cynical point of view, it is common knowledge that private business tends to be greedy. Being greedy does not, however, have to mean behaving badly. Because of this, the private sector will certainly flock to these new green initiatives as a means of saving money and maximizing profits. While this may sound like a rather calculating and cut and dry way to view things, one must bear in mind that this money saving will mean a better future for the next generation.

The biggest appeals to the individual revolve around the installation of solar panels on housing, both to heat water and produce electricity. There is also the tax credit that can cover up to $7,500 of the price when a consumer purchases a hybrid car. Making a home more energy efficient can obtain a tax credit for the consumer as well. These tax credits will certainly encourage individual consumer involvement.

Money will also be allotted to businesses that install solar panels or research solar panels. Government buildings will also become more energy efficient, and solar panels will be installed on them, thanks to an allotment of $5.5 billion. Wind power installation is receiving an extension on its tax credits until 2012. Finally, companies using smart grid technology will receive a reimbursement that could cover up to 50% of its costs.

These cost-covering tax credits will no doubt stimulate the necessary parts of the economy, and hopefully also create new jobs. It is the first big step towards a more sustainable future, and one that many Americans are happy to support. However, it is important to bear in mind that there is room for abuse, as is evident that some companies have taken advantage of certain loopholes in the stimulus package. One such example is that several paper manufacturing plants now use diesel fuel for processes that do not require diesel at all, but are able to get tax credits to do so. We cannot ignore loopholes such as these if we are to step towards a more sustainable future.

We are also now going to have to mix the idea of sustainability with realism about what can be achieved now and what can be achieved in the future. It is certainly quite uplifting to see this bill take strides towards a greener future. As an American and world citizen, I hope to see the day when sustainability has finally merged with the dominant infrastructure.

The opinions expressed in this article are the opinions of the contributor and are not necessarily the opinions of Climate Answers.

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