Where will the money go?

Earth2tech had an article this morning commenting on Obama's "radio address" this morning, where he lays out some plans for job creation at a high level. The Youtube video is embedded below, with my additional analysis below that.



I agree with Earth2Tech that the speech will be applauded by certain parts of the cleantech industry - those related to renewable energy production. But other large sectors of cleantech are also hoping to fit in with the administrations plans. If the focus of the administration is on green investments that also create large numbers of jobs ASAP, I think you will see a tendency toward large projects like he is describing, and away from subsidies for R&D to solve the longer term problems of global warming.

Here is the problem the administration is working through. If they have $100 to spend to solve the problem, where do they allocate the money? They are going to place bets that will address as many of their goals simultaneously. One major goal is immediate job creation (not jobs in four years). Another goal is reduction in carbon emissions. A third goal might be supporting the industries that are developing green solutions. There are other goals, no doubt, and certainly if you compile the goals of those lobbying for the administrations attention, the list would be quite long.

This, I believe, is why the idea of doubling renewable energy production is an attractive program for the administration. It creates jobs now, provides market support for companies in the renewable energy production industry by stimulating demand, and builds low-carbon energy capacity directly.

So far so good, but remember that in this exercise there is only $100, and if the monies are spent on these types of large infrastructure projects, less might be available for other programs that might generate fewer immediate jobs per million dollars invested, such as R&D investment, manufacturing subsidies, and market subsidies (addition incentives for EVs, residential solar, etc).