Environmental Leader

Green components of an economic recovery effort can both create jobs now and offset costs to taxpayers through future energy savings, according to a report released by the Peterson Institute for International Economics and the World Resources Institute.

The chart above assesses potential green-program impacts per $1 billion of U.S. government economic-recovery spending.

“On average, the green recovery scenarios we assess save the economy $450 million per year for every $1 billion in government investment, a sort of ‘efficiency pay-go’ provision for current fiscal spending,” said Trevor Houser, lead author of the report. “The most successful programs will be those that can be implemented quickly and complement, rather than replace, comprehensive energy and climate policy down the road.”

By returning money to households through lower energy bills, Houser says green components of a recovery package combine tax cut-like benefits with the construction and manufacturing jobs created from infrastructure investment. On average, green recovery programs create 30,000 jobs for every $1 billion in government spending.

Despite these benefits, stimulus provisions alone will only have a modest impact on greenhouse gas emissions and dependence on foreign oil. However, a recovery effort with well-designed green components can serve as a down payment on future climate and energy policy by reducing costs and maturing key technologies.