Energy efficiency should be baked into pandemic recovery
It took much longer than it should have, but Congress finally agreed at year’s end on a short-term pandemic relief bill to help struggling workers and small businesses make ends meet through the winter. While it’s a good aid package, the real work of rebuilding an economy wrecked by COVID-19 is just beginning.
Congress and the Biden administration now need to use the policy tools at their disposal to stimulate economic activity — not just sending relief to laid-off workers but also helping create conditions for unemployed Americans to find jobs. We need a targeted approach aimed at economic sectors seeing the most pain.
While the challenges facing the airline, restaurant and hotel industries are well-documented, other sectors not in the headlines have also seen enormous job losses and need federal support not just to rebound but to grow. One of those is energy efficiency, which is among the largest U.S. energy workforces with more than two million people.
The sector, which was projected to grow by 3 percent in 2020, instead shrunk by almost 15 percent, losing more than 300,000 jobs since March. For context, that’s nearly twice the size of the existing coal industry workforce in the U.S, and almost the same size as the entire wind and solar industry workforces combined.
Efficiency jobs have disappeared as weatherization programs have shut down and demand for building efficiency improvements has softened. These are largely blue-collar workers — with 60 percent working in construction, and they’re spread across the country in rural and urban areas alike. They’re also mostly small business jobs: 80 percent of energy efficiency companies have fewer than 20 employees.
The situation has improved slightly in recent months, but at the current pace of recovery, it would take three years for the sector to get back to pre-COVID employment levels. That’s clearly not acceptable, particularly when history shows that targeted policy can get these workers back on the job far more quickly.
When the economy cratered a decade ago, for example, Congress boosted tax incentives encouraging homeowners to make efficiency improvements, such as installing new windows or insulation, upgrading heating and air conditioning equipment or replacing water heaters. The added incentive worked: Homeowners immediately increased spending on these products, with IRS data showing that spending jumped by nearly $40 billion over two years, protecting and creating jobs with construction contractors and equipment manufacturers across the country.
Not only did it boost the economy, the expanded tax incentive helped consumers reduce their energy bills and slash greenhouse gas (GHG) emissions. We need more policies like that, and quickly. Homes and buildings account for nearly 40 percent of U.S. energy consumption and reached a record high for worldwide emission contributions in 2019. We can’t meet our climate goals without improving our building stock.
Other solutions include launching a national campaign to retrofit critical public buildings like schools, shelters and hospitals to make them more energy-efficient, safe and resilient so that communities are better prepared to respond to emergencies. In many cases, energy savings from efficiency improvements more than pay for themselves.
With small businesses struggling the most, we should also offer grants to help them reduce costs by improving their energy efficiency at low- or no-cost. And we should significantly ramp up weatherization assistance to low-income households struggling to pay their energy bills.
We’re all ready to leave 2020 firmly in the rearview mirror, and there’s no reason to think we can’t get this virus under control and put the economy back on track in 2021. But it’s not going to happen by itself. To ensure brighter days ahead, Washington should get right back to work in the new year and invest in the American workforce.
Glover is the newly appointed president of the Alliance to Save Energy and formerly president and CEO of the American Association of Blacks in Energy.
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