Obama hails wind energy incentives as ‘win-win’

In the midst of a global recession and a decades-long slump in American manufacturing, President Barack Obama spent part of Earth Day in central Iowa defending an ambitious policy agenda reflecting the view that economic prosperity is intertwined with energy security.

“The choice we face is not between saving our environment and saving our economy – it’s a choice between prosperity and decline,” President Obama said in his speech at a wind energy manufacturing facility in Newton. “The nation that leads the world in creating new sources of clean energy will be the nation that leads the 21st century global economy.”

Obama called investments in wind energy “win-win,” saying it is “good for the environment and great for our economy,” and he described other incentives that his administration supports to encourage energy independence and reduce the impacts of climate change, including “a market-based cap” on carbon emissions.

Enacting such a plan, often called “cap and trade,” will likely be one of the toughest fights Obama will face in Congress this year. In a sign that battle lines are being drawn, Obama described the lack of restrictions on carbon emissions under current law as “the carbon loophole,” a characterization that conservative opponents of his plan dispute but that allies, including former Vice President Al Gore’s Alliance for Climate Protection, have embraced in advertising campaigns.

Conservatives have criticized Obama’s plan, arguing that efforts to further regulate and tax businesses during a recession could lead to further economic decline. They say that government should resist new efforts to manipulate the market by limiting carbon emissions.

But David Osterberg, Executive Director of the Iowa Policy Project, warns that sometimes the market is not equipped to solve problems on its own, and government must step in to create incentives and impose regulations. “If [global warming] is real, then all the government is doing is trying to make the market do what it ought to,” he said. “The market has already demonstrated that it can mess up badly. It is messing up badly when it comes to global warming.”

The facility where Obama spoke was once home to a Maytag manufacturing plant, which closed in 2007, leaving Newton without its major employer. Now operated by Trinity Structural Towers, the factory produces towers for wind turbines, and many of its 100 employees had worked for Maytag.

Obama hailed the Trinity factory and others like it as examples of how alternative energy manufacturing can help towns recover in the wake of serious layoffs.  But such factories are hardly a panacea. The Maytag closing in Newton left hundreds of workers without jobs, and only a fraction of them have been rehired by the wind energy plants that have since come to town. Dozens of other Iowa towns have lost factory jobs in recent years, and only a fraction have been supplanted by jobs in the alternative energy sector so far. In fact, two wind energy plants in eastern Iowa have been forced to lay off more than 100 workers this year.

Osterberg, who recently coauthored a report about Iowa’s growing wind energy capacity, admits that wind energy manufacturing is not likely to reverse the downward trend in manufacturing jobs statewide, but he is bullish on the industry’s opportunities to expand over the coming decades, mitigating the impact of additional manufacturing layoffs in other sectors.

No industry is immune to the current credit crisis, and that was what caused recent layoffs at wind energy production plants, Osterberg said. “People are having trouble financing wind farms because people are having trouble financing anything.”

Specifically with regards to wind energy, Osterberg sees the financial situation improving already, after massive infusions of federal recovery dollars meant to spur investment.

As the economy improves, wind energy manufacturing should continue to grow faster than most other segments of the economy, in part because of how far behind the United States is in wind energy production compared to Europe. Growth might not continue at its current rate — a remarkable 50% per year — but significant expansion will be necessary for the foreseeable future just to catch up to the rest of the world, Osterberg said.

“The new plant in Newton doesn’t take the place of Maytag, but all of the wind plants take the place of Maytag,” he said.