According to USA Today, the energy elements of Obama’s “stimulus” package add up to about $58 billion. He’d use $32 billion to fund a smart electricity grid;$20 billion for Renewable energy tax cuts and a tax credit for research on energy efficiency and clean energy, plus a multiyear extension of the green energy production tax credit; and $6 billion to weatherize modest-income homes.
There’s not all bad here. Many writers, including Vaclav Smil and Peter Huber have pointed out the importance of upgrading the electrical grid, and the fact that there is money to be saved there by allowing east-west energy flows that are currently impractical. And to the extent that renewables are going to come online in any meaningful way, a new grid would be important to help smooth out intermittancy. I think we’d all rather see the new grid build more by private entities than the government, but large scale infrastructure is pretty hard to get built even with private-public partnerships.
But it’s hard to see how any of this is a stimulus, since it’s virtually impossible to get projects like these off the ground quickly. The new grid, the new windmills, the new solar power facilities all require regulatory approvals, and the various states have their own approvals process to run through. You can bet the environmentalists will do everything they can to block these projects at the local level, because they’re fundamentally insincere about renewables. They use renewables as red herrings in the grand debate, while blocking them at the local level. What they really want is energy rationing, and a radical movement away from a technological lifestyle. By the time this spending actually gets rolling, the recession will be over (most predict we’ll come out of it in late 2009/early 2010) and then the public spending will be a drain on the economic resurgence, not a stimulus.
If Obama wants to stimulate the economy, he needs to get money into the hands of people, and encourage them to buy things. Most of the economists I know agree on this. Tax cuts would be best, but even some kind of time-limited stimulus gift card, given to people in lower-income brackets would get stuff purchased quickly.