President elect Barak Obama has proposed an economic recovery bill of tremendous proportions. Unfortunately, with our rush to get cash flowing into the economy, the infrastructure portions of the current proposal, in many cases will fund the last brown projects of the 20th Century rather than the first green projects of the 21st Century.
The bill's goal short term goal is to get people working. But it would be much stronger if this work was organized by a long-term strategic vision. It is missing an extraordinary opportunity to not only stimulate the economy, but also invest in solutions that will improve our economic future, increase our energy security and reduce climate change.
There is no doubt the economy is in trouble and swift and decisive action is a must. The dramatic drop in employment and lack of liquidity has created a call to fund "shovel ready" projects. Unfortunately, most ready to go projects were designed in an era of "earmarks". So being "ready to go" is not sufficient criteria for smart investment policy.
President Barak Obama has spoken eloquently about the need to build a new green economy, but those words are not sufficiently reflected in this bill. The bill also seems to have been organized around a flawed premise that we need to deal with the economy first, and then the environment. In fact, the best investments can lead to a healthier economy and a healthier environment. It would be a terrible waste to spend billions of dollars in ways that harm the environment and then have to spend more to remediate the damage that we have done.
There is consensus that a substantial portion of the economic recovery funds should be invested in infrastructure but little clarity on what kind of infrastructure. In fact, there seems to be a growing concern that the bill spends too much on tax credits and not enough on transformational infrastructure. If we want to make transformational investments, this is the time to fund the design and construction of a strategically planned network of high speed intercity passenger and freight rail, rebuild aging airports, develop next generation telcom networks, and develop waste water recycling projects to supply the thirsty Western States. These are the kinds of investments that will enhance America's economic productivity and reduce its environmental impacts.
Unfortunately, the State lists of ready-to -go projects are full of rural road repavings, exurban water and sewer extensions and remote area telcom upgrades. These are the kinds of projects that not only produce the least amount of economic activity, but at the same time produce the most amount of sprawl. And sprawl is the least economical and ecological form of investment and development.
The current stimulus directs funds to State agencies without guidance on its use, other then that the projects be "ready to go". A few key principles could help guide the investment of these funds:
Invest, don't spend: We should view the stimulus funds as critical resources to invest in America's infrustructure. The goal of the program should not be to spend (i.e. to get a lot of money into the financial system) but rather to invest (i.e. to use the funds to develop or rebuild the infrastructure that is critical to America's economic and environmental prosperity).
Plan infrastructure: The last great national infrastructure investment, the interstate highway system, had a strategic goal and a national plan. But most of today's projects are viewed as "one offs" rather then a part of a systemic solution. Many of our nation's metropolitan regions span state borders- we need to generate regional plans to co-ordinate our investment strategies and we need to sum these up into a national plan.
Location Matters: Invest where the investment will make the greatest difference. The Brookings Institute notes that 75% of our nation's GDP is generated in our top 100 metropolitan areas. Focussing our infrastructure investment in these 100 metropolitan areas will create the most jobs and economic activity, rather then building bridges to no- where. The "fix first" funds should be concentrated in these communities.
Prioritize Connections: Metcalf's law notes that the robustness of a system is directly proportional to the number of nodes on the system. Networked systems provide more economic and social utility then stand alone systems. For example, a new train line that interconnects two existing transit lines provides much more mobility, resliance and economic benefit then a stand alone train line.
Expand modes of use: Much of the proposed transit funding will go to rebuild our network of roads and hi-ways. Instead of rebuilding the mono-use roads of the past, we need get more value out of our investments by building the smart streets of the future, which include appropriate combinations of pedestrian and bike paths, bus rapid transit and HOV lanes.
Connect Systems: We get even greater synergies when we interconnect different systems. For example, the Economic Recovery bill has funds to build affordable housing. When we build affordable housing next to mass transit, we make the trips to the housing more affordable, improving the lives of the residents more then if the affordable housing was in an auto dependent location. When we put senior housing next to mass transit, we increase senior's mobility. When we connect transit, housing, schools and cultural facilities, we create more vibrant communities. When we connect our electrical and data networks, we create a smart power system that is much more resilient and responsive to demand. And connecting these systems increases their environmental efficiency.
Integrate systems: Transportation systems are essential for the future of our metropolitan areas. But school systems, healthcare systems, cultural/ library systems, data and energy systems, water and sewer systems and housing support systems are also essential. We need to make investments that maximize the benefit to the whole, by creating a framework that integrates the individual systems into a whole.
Build Green: Climate instability and biodiversity loss are huge looming threats to our economic, social and ecological health. Therefore, everything that we build must be designed to reduce its climate and biodivsersity impacts, or to help us adapt to the risks of climate change, increasing the resilience of our metropolitan areas to the threats of climate change. And we should require that every piece of equiptment paid for by the bill meets energy star standards, if available.
Start Planning the Future now: during the last decade, our nation focused too much on financial engineering, and not enough on civil engineering. We should provide funds to hire 100,000 engineers to begin the design of the infrastructure projects of the future.
If we apply these simple frameworks to the decision making process for allocating the stimulus funds, we will create an investment of enormous power to heal our economy, our ecology and the social fabric of our nation.
The economic recovery bill is likely to be followed by a new energy bill, a health care bill, a cap and trade bill and, next summer the reauthorization of the transit bill. By the fall of 2009, it is more likely that we will be discussing the huge deficit than another stimulus investment. And thus, we have to treat every dollar we commit to invest in 2009 as a once in a lifetime investment opportunity, as 2010 is likely to be a year of greater fiscal restraint.