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Rebuilding Green: The American Recovery and Reinvestment Act and the Green Economy

Posted by Content Coordinator on Monday, March 14th, 2011


Executive Summary

As we mark the second anniversary of the American Recovery and Reinvestment Act (ARRA or the Recovery Act), it is an appropriate time to evaluate the impacts of this landmark legislation. President Barack Obama signed the ARRA into law on February 17, 2009. It was a response to the great financial crash of 2008 that devastated the U.S. economy, destroyed millions of jobs, created millions more long-term unemployed, and forced a tax-payer bailout, unparalleled in American history. The ARRA’s enactment represented a dramatic attempt to resuscitate a U.S. economy in free-fall.

Two years later, the Recovery Act’s public investments have not only saved and created millions of jobs, but have also represented an unprecedented down payment on the nation’s emerging green economy. As outlined in this report, Rebuilding Green: The American Recovery and Reinvestment Act and the Green Economy, the success of that down payment makes a strong case for additional public investment in the green economy as a centerpiece of a national strategy to solve the continuing unemployment crisis.

This report, a joint effort between the BlueGreen Alliance and the Economic Policy Institute, takes a comprehensive view of the Recovery Act, examining the success of this legislation as a response to a major economic crisis, and more specifically, its success in creating and saving jobs through critical green investments.

The report finds that through the end of 2010, the Recovery Act:

  • Committed $93 billion in public investment to green economy activities across a range of industry sectors.
  • Creates or saves nearly 1 million American jobs with this $93 billion investment. These 997,000 jobs include both the “green jobs” created directly by investment in specific industries and indirectly by their suppliers, as well as the additional jobs created when workers spend their incomes back into the economy.
  • Provides jobs for some of the country’s most vulnerable workers. These include workers who have been on the losing end of structural trends in the labor market over the past generation – including those in the middle of the wage distribution and those with less than a four-year college degree.
  • Increases U.S. Gross Domestic Product (GDP) by $146 billion with its green economy investment.

The report also examines the evidence on the overall effectiveness of ARRA in stemming the economic crisis, from its passage until the middle of 2010. This evidence demonstrates clearly that during this period ARRA:

  • Created or saved up to 3.4 million jobs;
  • Boosted GDP by up to $520 billion; and
  • Reduced the unemployment rate up to 1.8 percentage points.

Rebuilding Green shows how the Recovery Act was designed as an effective response to the economic crisis that required confronting three intersecting challenges faced by the United States:

  • Transforming energy – Our economy was designed to function in a world where fossil fuels are forever abundant and forever cheap. Today, as increasing demand for oil comes up against a dwindling supply, prices are rising to reflect that reality and are projected to continue rising;
  • Addressing climate change – Climate change is upon us and is close to reaching a tipping point, with devastating consequences for the country’s – and the world’s – ecological and economic systems; and
  • Restoring competitiveness – In 2009 China took first place among G-20 countries for overall investment in clean energy, pushing the United State to second place. The U.S. is also lagging behind G-20 countries by other key indicators of clean energy competitiveness. In all of the countries outstripping the United States, domestic policy is spurring the rapid scale-up of their green economies, with national standards for renewable energy and energy efficiency and carbon pricing providing long-term market clarity, alongside other supports like low- or no-cost finance.

FIGURE 3. What was in the Recovery Act?FIGURE 4. What is the most eective stimulus?

Download full report (PDF): Rebuilding Green
About BlueGreen Alliance
“The Blue Green Alliance is a national, strategic partnership between labor unions and environmental organizations dedicated to expanding the number and quality of jobs in the green economy.”

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