Federal Stimulus: Minnesota is Poised for Economic Growth
During election season 2020, it was clear that clean energy is becoming a more common topic of conversation. Now that the Biden-Harris Administration is settling in, a focus on investments in clean energy and infrastructure is emerging, focusing on the economic benefits of a transition to low and zero-carbon electricity.
Biden-Harris’ American Jobs Plan
The current proposal from the Biden-Harris Administration’s $2.3 trillion American Jobs Plan (AJP) budgets the following:
$174 billion for electric vehicle infrastructure
$100 billion for the grid
$46 billion in manufacturing for clean energy
$35 billion for research into technologies related to climate change
These areas are economic drivers for Minnesota. For example, according to the Minnesota Department of Public Safety, from 2016 through February 2021, annual battery electric vehicle registrations increased 535% and annual plug-in hybrid electric vehicle registrations rose 150%. And the advanced transportation sector employs nearly 3,200 Minnesotans, according to the 2020 Clean Jobs Midwest report. The advanced grid sector employs another 2,900 across Minnesota.
In his recent State of the Union address, Biden specifically called out the need for transmission, which continues to hamper Midwest renewable development. The AJP also sets forth a national clean electricity standard and provides tax credits for renewable energy and storage.
But what does this mean for Minnesota, where nearly 9,000 clean energy jobs were lost due to the pandemic? The short answer: Minnesotans would benefit in monthly electricity bills, jobs, as well as health and environment, by a transition to clean energy.
CEEM report highlights stimulus potential
The Economic Impact of Stimulus Investment in Clean Energy is a report which highlights the benefits Minnesota receives from this kind of investment — economic benefits, consumer savings, and significant return on investment.
Billions added to the economy. A federal stimulus package targeted at boosting the clean energy sector would end up adding more than $117 billion to Minnesota’s economy, a nearly 8 times return on investment.
Job Creation. A federal stimulus would create a massive amount of new jobs, totaling more than 750,000 new jobs. This number is measured in job-years, which is a combination of shorter-term construction or installation employment mixed with more long-term positions.
Consumer savings. Another important net benefit to a federal stimulus targeted at clean energy is the savings Minnesota consumers will see. This report tallies a savings of $5.5 billion in energy costs each year.
Tax Revenue. The positive impact of a federal stimulus on Minnesota’s economy also reaches our state and local governments. A stimulus of this size would create nearly $7 billion in additional tax revenue for local and state governments across the state.
Policy leads success
As Minnesota considers how to direct public stimulus to drive economic recovery from the COVID-19 health crisis, this report shows the significant impact the clean energy industries can have while helping the state increase its clean energy options and meet emissions reduction targets.
State and local policies can boost these benefits as stimulus investments are deployed. For example, the report notes a potential $79 billion in impact from energy efficiency investments. The American Council for an Energy-Efficient Economy (ACEEE) ranked Minnesota 9th out of all 50 states for its overall energy efficiency programs (the highest ranking in the Midwest, see the 2021 Minnesota Energy Factsheet for more information).
Currently, Minnesota’s lawmakers are debating the Energy Conservation and Optimization (ECO) Act, which would further expand energy efficiency options across the state. This has the potential to expand both jobs and economic benefits statewide.
Clean energy means business and recovery
In terms of economic impacts, pre-pandemic, Minnesota was home to over 61,000 clean energy jobs – and these jobs grew 2.5 times faster than Minnesota’s overall employment, according to the 2020 Clean Jobs Midwest report. And this growth in jobs is bringing benefits to all corners of our state, as 37% of clean energy jobs reside throughout Greater Minnesota.
The pandemic has caused nearly 9,000 job losses in Minnesota’s clean energy industries – roughly 15% of the workforce. But the industry stands ready for recovery. In 2020, renewable energy became the #1 source of electricity generation in Minnesota for the first time, providing 29% of power, up from 25% in 2019 and 18% in 2011. Further, corporate demand for clean energy from Minnesota’s business leaders like 3M, Cargill, Target, and others shows a strong commitment to clean energy transition.
CEEM is working with colleagues to help shape stimulus opportunities. We will continue to work with our businesses alongside federal and state policymakers as debates continue in DC and St. Paul. For more information on how your organization can engage and share your business success stories, contact Benjamin Stafford, our Director of Government Affairs.