Proposed Renewable Energy 401(k) Tax Credit will fight rising sea levels and growing unemployment by creating 500,000 green collar jobs. Tax credit will double annual increase of renewable energy production within three years, according to the Renewable Energy Task Force of the South Denver Chamber of Commerce.
Responding to a report released today in the journal Science, indicating that global warming may raise sea levels by 16 to 21 feet, an unusual alliance of business, trade association and environmental groups are urgently calling on President Barack Obama, Congress and the Senate to implement a tax credit incentive for companies that add a renewable energy fund to employee 401(k) plans. The modestly priced legislation could be added immediately to the near completed economic stimulus bill.
According to the Renewable Energy Task Force of the South Denver Chamber of Commerce, the Renewable Energy 401(k) Tax Credit will be a high yield federal economic stimulus investment. The tax credit will also create a rapid decrease in carbon emissions responsible for the projected rise in sea level that could flood major coastal cities like Washington, D.C. Key highlights of the proposed legislation are:
- renewable energy is the fastest to build, and most cost-effective, low carbon electrical generation technology. Renewable energy costs of 5 to 6 cents per kilowatt hour and build times of a few months (large scale solar) to 1 to 2 years (1000 MW wind farm) compare favorably to costs of 8 to 11 cents per kilowatt hour for new nuclear (Keystone Center report, June 2007) and build times of 10 to 15 years. Large scale, commercially viable, clean coal technology is not expected to be available until 2030 according to the World Business Council for Sustainable Development.
- with a government cost of $7 to $8 billion, the Renewable Energy 401(k) Tax Credit dollars will generate $60 - $100 billion investment in renewable energy. This will create a rapid five-fold increase in the size of the renewable energy sector (2007 renewable energy investment was $19 billion dollars).
- allow 50 million Americans to invest a projected 5% of their 401(k) plans in clean energy production
- create 500,000 or more clean energy jobs over three years
- create an annual increase of 20,000 MW of new wind, solar and geothermal electrical generation by 2012
- help renewable energy meet 100% of new national electricity demand in three years
- will continue to lower the cost of renewable energy technology for countries around the world, including China. Combined with energy efficiency, tax credits to allow retirement plan access to renewable energy investment, will be a leading solution to global warming.
- 2006 data indicates that US 401(k) plans held $2.7 trillion dollars. Allowing these funds to be invested in renewable energy, if individual plan holders choose to do so, is a wise economic and environmental course of action that needs to be implemented immediately.
"Last year almost half of all new US electricity was generated from renewable energy," says Jim Welch, CEO of Bella Energy, a Colorado based solar energy firm, "The Renewable Energy 401(k) Tax Credit will rapidly allow all new US electricity to be generated from renewable sources and play a major role in preventing climate change impacts."
American Wind Association data released last week indicates that more than 8,000 MW of new wind production was built in 2008 with investment in the wind energy sector passing the $17 billion mark. Totaling 42% of all new US generation capacity added in 2008, the newly added wind farms produce enough electricity for 2 million homes. These numbers are up from wind providing 30% of all new US electrical generation in 2007.
The additional annual $20 to $30 billion of new investment generated by the Renewable Energy 401(k) Tax Credit will help to more than double the number of new clean energy megawatts installed each year. With swift passage of the proposed tax credit bill, by 2012 one hundred percent of new US electrical demand can be provided by renewable energy. This is consistent with President Obama's target to double renewable energy production over the next three years.
"In 2007, investment in the American renewable energy sector, including both wind and solar, was $19 billion dollars with employment of 116,000 people. More than 50,000 new renewable jobs were created in 2008 - that's an impressive annual growth rate of 45%," continues Jim Welch, "Congress and the Senate need to support the Renewable Energy 401(k) Tax Credit which will create $100 billion in clean energy investment and 500,000 new green jobs over the next three years."
Reflecting the national trend, Colorado's renewable energy sector has been experiencing rapid-fire employment growth. In 2008 AVA Solar added 165 new manufacturing and engineering jobs in Ft. Collins and Longmont. The new AVA manufacturing plant produces thin film solar panels at 30% of the cost of existing solar technology (AVA cost is $1/watt). Vestas built a new wind turbine manufacturing facility near Denver that employs 1,350 Coloradoans and uses 200,000 tons of steel annually to produce enough wind turbines to power more than half a million homes per year. Nationally, wind turbine and turbine component manufacturers announced, added or expanded 55 new facilities in 2008.
As renewable energy production rises faster than demand for electricity, clean generation capacity will be used to retire aging conventional power plants over a 5 to 30 year period leading to significant reductions in climate change causing emissions thereby reducing sea level rise.