Summary
A new Senate bill sponsored by Sen. Sherrod Brown aims to improve the long-term competitiveness of American manufacturers and enhance domestic capacity for manufacturing clean energy technologies including geothermal, solar, wind and hydroelectric power, as well as aiding suppliers in providing components to assist automakers in meeting upcoming stricter federal fuel efficiency and emissions standards. The legislation is also an incentive for former semiconductor manufacturing companies to transform capacity to solar cell production, as several major players have done in recent years.
Analysis
On June 17, U.S. Senator Sherrod Brown (D-Ohio), introduced the "Investments for Manufacturing Progress and Clean Technology (IMPACT) Act of 2009,” which would initiate a $30 billion revolving loan program to facilitate manufacturers shift resources into the clean energy industry. Details on this new legislation are available on Sen. Brown’s official website. The bill aims to improve the long-term competitiveness of American manufacturers and enhance domestic capacity for manufacturing clean energy technologies including geothermal, solar, wind and hydroelectric power, as well as aiding suppliers in providing components to assist automakers in meeting upcoming stricter federal fuel efficiency and emissions standards. The legislation is also an incentive for former semiconductor manufacturing companies to transform capacity to solar cell production, as several major players have done in recent years.
Sen. Brown was accompanied by Apollo Alliance Chairman Phil Angelides and other notable business, labor and clean energy leaders, as he introduced IMPACT that is anticipated to put America's ailing manufacturing sector on the path to recovery by facilitating the development of domestic clean energy manufacturing and production.
The legislation would also widen the focus of the Hollings Manufacturing Extension Partnership (MEP), a division of the Department of Commerce’s National Institute of Standards and Technology, to assist manufacturers transitioning to the clean energy industry. MEP is a national network that provides companies with consulting services and access to public and private resources in order to enhance growth, improve productivity, and expand capacity. For the past 20 years, MEP has worked with thousands of manufacturers delivering $1.44 billion in cost savings and $10.5 billion in increased or retained sales annually.
The domestic manufacturing industry is often cited as a significant contributor to the growth of the American middle class and is also critical to national security. It accounts for 12 percent or $1.6 trillion of the U.S. gross domestic product (GDP) and nearly three-fourths of the nation’s research and development (R&D), according to statistics highlighted in Renewable Energy World. However, the U.S. manufacturing industry has contracted for 16 consecutive months during the latest recession, which is the longest since World War II. Since 1987, the manufacturing sector’s contribution to GDP has declined by 30 percent, as companies once having plants in the U.S., outsource production facilities overseas, where the cost of labor is less. According to the Federal Reserve Board, manufacturing output fell 2.7 percent in January 2009 to a level 13.1 percent below that of only 12 months earlier.
The IMPACT bill follows the American Recovery and Reinvestment Act or economic stimulus bill (green energy components), American Clean Energy and Security Act, and national Renewable Energy Standard bill, all of which will generate highly elevated demand for clean energy components at various elements within the economy. These bills are part of the effort to develop comprehensive clean energy and security legislation, including demand creation and the elements necessary for meeting the demand such as tax incentives, special corporate finance packages, and R&D funding, etc. It is relieving that spokesmen such as Angelides have addressed the need for comprehensive legislation, which was mentioned in a previous article, about American potentially exchanging its reliance on Middle Eastern oil for Asian solar panels and/or European wind turbines, if it does not create its own clean energy infrastructure, since oil is a finite source of energy whereas renewable energy sources are- infinite.
The IMPACT Act would provide resources for small- and medium-sized manufacturers through a 2-year, $30 billion manufacturing revolving loan fund that would provide critical credit to domestic manufacturers, whom are struggling to obtain financing at this time due to the national bank credit crisis, so they can enhance manufacturing processes, transform facilities, and expand production of clean energy products. The Apollo Alliance estimates that this bill would create 680,000 direct manufacturing green jobs and nearly 2 million indirect jobs over five years.
Interestingly enough, many past presidents did not offer substantial legislation to seriously stop outsourcing of domestic manufacturing and former President George H. W. Bush even gave speeches strongly supporting outsourcing for its benefits to the American economy. Furthermore, a substantial commitment to clean energy legislation including carbon emissions reductions, fuel economy standards, energy conservation, and renewable energy funding and subsidies have remained merely rhetoric since the Carter administration. President Obama has articulated frequently how the numerous economic problems the U.S. is now facing are a result of years of failed policy and poor government regulation leading to the need to rebuild America; thus supporting the old saying that the “sins of the father manifest to the son,” as well as the new saying- "Green Revolution."
