Each dollar invested in clean energy creates jobs, stabilizes and reduces our energy costs, increases productivity, reduces our foreign dependance on energy, creates exportable products and services, enhances our balance of trade, and significantly improves our environment. The key differentiation with clean energy investments is the significant economic leverage achieved compared to any other investment, known in economic circles as velocity. In aggregate, any dollar invested by the government usually has one dollar less of velocity as compared to a similar investment by the private sector. Government begins in a disadvantaged position, caused by the tax effect on money. Any investment on the part of government, therefore, must really bring unique advantage and not be duplicated in the private sector. Clean energy fits that paradigm.
This country's clean energy strategy will focus on solutions that are economic, have a large impact, create jobs, increase productivity, improve our balance of trade, and enhance our environment. The core elements of the three step clean energy strategy include:
- Electricity - Accelerate proportion of economic renewable electricity, with a principal focus on enabling wind power.
- Transportation - Accelerate the domestic development of very high mileage plug-in hybrids.
- Buildings - Accelerate the adoption of high efficiency end-use central systems, appliances and end-uses, including combined heat and power systems and geothermal heat pumps.
The first role of government is to reduce the barriers to adoption, by eliminating regulation which discourages or hampers the development of these clean energy sources. The second role of government is to encourage regulation that enables the development, deployment and adoption of these resources. This would include tax breaks for developing and deploying these sources of energy. The third step for government would be to provide financial incentives that directly reduce initial costs, such as tax incentives, rebates and grants. It is important that the government share of these expenditures be kept low, so as to ensure only the most economic projects are built and that private capital is put to work, leveraging fundamentally scarce public resources.
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