By Stockton Williams

An unprecedented amount of federal stimulus funding – more than $10 billion – to retrofit homes, businesses and government buildings to be more energy efficient is starting to hit the streets in communities around the country. This is good news from an economic as well as an environmental perspective, because building energy retrofits reduce pollution at the same time they save families money and put people to work.

Energy use – and waste –in buildings accounts for nearly 40 percent of greenhouse gas emissions in the U.S. Low-cost, off the shelf technologies – and common sense construction practices – can cut energy use in most buildings by as much as 30 percent, translating into billions of dollars in cost savings and hundreds of thousands of jobs if applied to a substantial share of the properties in need of improvement.

Cities that receive retrofit funds from Washington are understandably focused on spending the money quickly to create jobs. It is critical that local governments invest these resources in ways that will also generate maximum long term benefits as well, as the big boost in funding from the recovery bill was almost certainly a one-time event.

This means three things: using stimulus money to attract other capital, establishing a comprehensive strategy for retrofits, and making the most of every retrofit opportunity.

The city of Chicago is showing how a relatively small amount of federal retrofit funding can leverage larger amounts of financing in an innovative program that aims to retrofit up to 5,000 low-income apartments in its first phase. By committing $1 million in recovery funds, the city has generated $7.5 million from banks and foundations to scale up the program.

A good example of a comprehensive strategy is the partnership between Minneapolis and St. Paul that has set an audacious goal of retrofitting all the buildings in the two cities in 10 years. The Twin Cities have engaged a partnership of state and local agencies, utilities, industry groups, organized labor and community-based nonprofits to create a comprehensive system, with critical seed funding from several streams of federal retrofit dollars.

Making the most of every opportunity means making sure retrofit jobs don’t simply pick the low-hanging fruit of easy energy efficiency, but also incorporate features to make properties healthier, safer and more accessible, which is especially important in homes of low-income older Americans. The city of Philadelphia is among the leaders in pushing the envelope on such “whole house” retrofits that drive toward maximum energy, health and accessibility benefits.

The Obama administration can help cities take a more strategic approach on building energy retrofits. For example, remaining recovery funds that are set to be awarded through a competitive process (as opposed to a formula allocation) should prioritize applications from communities that show the strongest financial sustainability and scale.

The administration should also work to encourage leading edge innovations in financing building retrofits, such as emerging models for amortizing the cost of improvements through small payments on property tax and utility bills.

Finally, the administration should redouble the solid efforts it has begun to ensure that the job and career opportunities that will come from investment in building energy retrofits, as well as other sectors of the emerging clean energy economy, are fully available to low-income people and minority small businesses that have long been disadvantaged in our (still) dirty energy system.

Some may say that such a commitment is untenable when overall unemployment and economic challenges are widespread at almost all income levels. In fact, the opposite is true. As the country recovers, reinvests and rebuilds to a stronger economic future, our ultimate success will depend on the full participation of everyone in our society.

Cities that utilize federal support for building retrofits as both a down payment on a long term economic development and environmental protection strategy, as well as an immediate boost to the jobs and tax base, will be in position to realize returns on the federal investment long after the funds are spent.

Stockton Williams is the Senior Advisor and Director of Green Economy Initiatives for Living Cities - an innovative philanthropic collaborative of 21 of the world's largest foundations and financial institutions. Among other key initiatives, Living Cities is focused on improving the lives of low-income people and the urban areas in which they live.

Urban centers pursuing sustainable objectives is nothing new, but a new report evaluates the progress of 40 cities to determine where priorities lie. Big cities are pressing sustainability as a top priority, but need to further focus on the needs of low-income citizens, according to the Green Cities report.

Living Cities, an international collaboration of 21 of the world’s largest foundations and financial institutions, measured how 40 of the largest U.S. cities are working to reduce their carbon footprint. The top five cities studied, ranked by population, were New York City, Los Angeles, Chicago, Houston and Phoenix.

The report found that three-quarters of participating cities have or are developing plans to reduce greenhouse gas emissions. The recent economic changes have prompted efforts towards energy-efficiency, mass transit and the ever popular green jobs.

Investment in reducing greenhouse-gas emissions vary greatly through the reported cities, and cities have anywhere from one to dozens of staff members working on climate change. Most cities were able to estimate their budgets for sustainability efforts handled through a number of programs, which generally fell between $150,000 and $500,000, with a high of $15 million. However, more than two-thirds of cities have reported that state and federal government had little or no impact on their work to reduce emissions.

Public transit use rose alongside mounting energy costs in virtually every city per the report, and significant numbers of cities are investing in at least one central strategy to boost mass transit. Escalating costs have also driven cities to develop programs to subsidize weatherization and efficient appliances. Metropolitan centers are also constructing more efficient buildings-- one in four cities have green building mandates that not only affect city buildings, but also apply to private (usually commercial) construction.

Four in five urban centers report that sustainability is a top five priority and more than half of the cities are either creating or developing plans to achieve sustainable objectives. The recent stimulus bill can supplement these sustainability plans during a time when cities are reeling from recession budget impacts.

Cities are also focused on attracting green jobs and industries, so much so that one in three cities has partnered with local colleges and created training programs that are green-focused. However, few cities are actually working with low-income communities as part of green strategies. Since one of the key tenets of sustainability is to work to meet all human needs, these types of programs need to be expanded. Ideally, cities will shift priorities to not only react to economic and environmental changes, but also to work to further connect low-income residents to the city’s mainstream economy.

“The emerging green economy can and must deliver opportunities to low-income people and communities, from lower energy and transportation costs, to good jobs and career paths,” said Ben Hecht, CEO of Living Cities.

By Jackson Robinson and Elizabeth Levy

Less than a year ago, the dawn of a new age of green energy seemed to be at hand. Oil prices were climbing to a peak of $140 a barrel. Climate change was embedded deeply in the popular consciousness, and companies and countries all over the world were accelerating efforts to create a lower-carbon society. In the U.S., consumption of solar energy had grown by more than 11 percent in 2007 and wind by more than 20 percent.

In the ensuing months, however, the world has suffered one of the great financial collapses in modern history, and oil prices have plummeted from their dizzying heights to as low as $35 a barrel. Stocks of green energy companies have been severely battered, as the widely-followed WilderHill Clean Energy Index fell by a whopping 70 percent in 2008, terrible even when compared to the dismal 38.5 percent fall of the bellwether S&P 500 index. Funding for some renewable energy projects has dried up, and some people now question green energy’s staying power.

But despite this economic gloom, 2008 was one of the best years on record for renewable energy — in terms of policy progress in the U.S. — and 2009 has continued that trend. Barack Obama was elected on a platform promising a transformation of the nation’s environmental and energy policies.

The stimulus bill passed in 2008 provided support to the growth of clean and efficient energy for years to come, and introduced the concept of improving building efficiency as a source of green jobs, both themes continued and expanded in 2009’s stimulus plan. Obama and Congress are committed to devoting more than $150 billion in the coming decade to developing alternative energy sources and vastly improving energy efficiency.

Incredible growth opportunities. Unprecedented economic misfortune. In the face of such powerful and conflicting forces, the question remains: Can the growth in green energy continue?

To answer this question, we started by looking backwards, and challenging some core beliefs and assumptions that we have long held about the growth of green energy. And despite the current economic morass, we find our bullish assumptions on green energy unchanged — indeed, even strengthened. Our conviction is based, in part, on five basic trends that have been building in recent years.

1. Energy consumption will continue to grow.

Current economic conditions have resulted in many industries grinding to a halt, reducing their demand for energy. However, despite lowering its short-term growth projections for energy demand, the International Energy Agency (IEA) still predicts continued long-term growth in every imaginable scenario, with its base case forecasting a 45 percent increase in worldwide energy consumption by 2030. Even in scenarios that factor in a price being levied on carbon emissions (translating into significantly higher energy prices), demand for energy still grows. In one scenario where carbon is priced at a lofty $90 per ton in 2030, the IEA still predicts 1.2 percent annual demand growth. Factors such as population growth and income growth in developing countries mean that energy demand is likely to be extremely inelastic in the future — so long-term growth is expected to continue.

2. The marginal cost of new oil production is rising over time.

Estimates of marginal production costs are highly location-dependent and therefore hard to generalize. Many new production sites, such as the Canadian tar sands, various deep sea wells, and Arctic sites newly accessible to exploration (accessible, ironically, because of Arctic melting that is widely attributed to global warming), are more complex and difficult to access than historic ones, requiring much greater investment. Chevron’s Vice Chairman Peter Robertson, for example, has predicted that the cost of new production in the Gulf of Mexico’s deepwater sites could exceed $95 a barrel.

We are currently seeing the effects of the high costs of drilling for new oil: Many of the exotic new projects were suspended or cancelled as oil prices dropped in the second half of 2008. As the global economy recovers, oil demand will increase again, leading to another cycle of oil price volatility and a resumption of new, and more expensive, production.

3. Green energy technologies are improving in terms of both cost and capabilities.

Green energy technologies are undergoing a rapid improvement both in performance and in the costs of production. As manufacturing becomes more advanced and industry volumes grow, the cost per unit of renewable energy is steadily dropping. At the same time, the price of standard electricity from the grid has been increasing; according to the Energy Information Administration (EIA), the retail cost of electricity for consumers actually increased 20 percent between January 2006 and November 2008 (the latest data available), a fact often lost amid the news about falling oil prices.

As the costs of traditional and renewable electricity are converging, we are nearing the holy grail of renewable energy — “grid parity,” the point where the costs of producing renewable energy and the costs of traditional, carbon-based energy become equal. According to Ernst & Young’s estimates of the price of solar electricity, solar has already achieved grid parity with the help of subsidies in New Jersey, California, Massachusetts, North Carolina, and Connecticut, and without subsidies in Hawaii. Once we reach the point where there’s no difference in price between “green” and “brown” electricity, adoption of green energy will happen on a massive scale.

4. Increasingly, energy is a national security issue.

No one in America wants to be overly dependent on foreign oil imports and potential disruptions in supply caused by the likes of Venezuela’s Hugo Chavez or Russia’s Vladimir Putin.

5. Momentum is building for action against climate change.

Awareness of climate change continues to grow, consensus around the need for action has solidified, and the prospects for global action on climate change continues to progress, with U.S. participation in the process finally gaining significant traction. As nations prepare for the next round of international climate negotiations in Copenhagen in December, hopes are high that the U.S. will finally be a partner, rather than an obstacle.

At home, President Obama is already ushering in a new approach to climate change and energy independence. The February stimulus bill, the American Recovery and Reinvestment Act of 2009, prominently features investments in green energy as one of the tools to restart the economy. It contains more than $20 billion for the green economy, including renewable energy and energy efficiency programs, grants, bonds and loans — a sum unimaginable even six months ago. And an energy bill containing a national minimum requirement of renewable energy is looking increasingly likely this year, as well as some kind of climate legislation during Obama’s first term. Together, these represent a major transformation of U.S. energy policy.

These five trends have been evident for some time. Yet just as important are several new developments that have come into sharper focus in recent months and more clearly indicate the direction we are now heading. These latest trends are a strong sign that a massive societal shift to cleaner energy is not some future event, but is happening right now.

* Utilities and investors are backing away from coal due to its economic and environmental risks.

Many in the U.S. are thinking twice before planning new coal-fired generation facilities – and investors are thinking twice before investing in them. One of the drivers for this slowdown is uncertainty regarding regulations. As Lisa Jackson settles in as the Environmental Protection Agency administrator, she is revisiting many of the decisions made by the Bush administration. For example, the EPA is widely expected to rule soon that carbon dioxide and other greenhouse gases are harmful to human health and therefore can be regulated under the Clean Air Act. Such a ruling will undoubtedly make reliance on coal-fired power plants an even less attractive option in the future.

Questions about climate regulation and the future cost of greenhouse gas emissions have shifted from “if” to “when,” even as details have yet to be agreed upon. In the absence of concrete information, some investors are beginning to factor in a price for carbon on their own. For example, Bank of America’s Chairman and CEO Ken Lewis has stated that the bank is now factoring carbon pricing into risk and underwriting models, estimating the price of carbon at $20-$40 per ton.

This regulatory and pricing uncertainty, coupled with the current drop in energy demand, is causing utilities to rethink plans to invest in new coal-fired generating capacity. In January 2009, the developers of a coal-fired power plant in Montana abandoned a project they had already sunk $44 million — and five years — into, claiming that the 250-megawatt proposal “just simply cannot be accomplished” given the current “aura of uncertainty” surrounding coal-fired power.

* Renewables are financeable. At the same time that fossil fuels, such as coal, are becoming less attractive, renewable energy sources — such as solar and geothermal power — are becoming more attractive. Even in this dismal economic climate, solid projects are being funded and completed, and proving their effectiveness.

February’s stimulus bill contains myriad funding sources for green energy projects, including tax incentives, loan guarantees and direct credits. Dollars from these programs are beginning to flow; in mid-March, Energy Secretary Steven Chu announced the first loan guarantees for green energy were beginning to be released.

* Detroit is counting on green. After years of losing market share and making inefficient cars that American consumers increasingly didn’t want, it seems that domestic car companies are at last committed to going green. The near-collapse of Detroit’s auto industry, the federal bailout of General Motors and Chrysler, and the insistence of the Obama administration and Congress that Detroit start producing hybrids, electric vehicles, and far more fuel-efficient cars — all signal that a major change is finally at hand.

* Green isn’t just about the environment anymore. One of the most heartening developments over the last few months has been the transformation of green energy from an environmental interest to an economic and national security interest. Previously, solar panels and wind turbines were viewed only as tools to fight climate change. Now, however, they are viewed as tools for job growth and economic recovery, and President Obama has made room for green energy and climate change in his budget, even including revenues from a cap-and-trade carbon regulation.

Given this heady combination of factors, we believe that growth in green energy and clean technology will continue for many years to come. The dangers of a fossil fuel-driven world are enormous; climate change and other environmental hazards are real and growing threats to our survival. Our collective awareness of these problems and our drive to tackle them head-on have reached critical mass around the world. And the primary solutions to the problems — renewable energy sources and efficiency technologies — are becoming more effective, more scalable, and less expensive by the day.

The time for the green energy revolution is now. The current recession may slow down its progress, but forward movement seems inevitable.

Reprinted with permission from Yale Environment 360.

Jackson Robinson is president and founder of Winslow Management, a Boston-based investment advisory firm that specializes in green investing, including organic food production and renewable energy. Elizabeth Levy is Winslow's senior environmental analyst.

One of the most compelling concepts behind the new green economy is its ability to create jobs in the US. You certainly can't outsource the installation of a solar system or high-efficiency windows. Industrial-scale wind turbines are enormous, thus favoring local production.

Although these concepts are true, there are some pitfalls to watch for:

1. Outsourcing Manufacturing
The US has lost 6 million manufacturing jobs in the last three decades. Many of these jobs had been stable and relatively well paying, especially for people without college degrees. These manufacturing jobs will not necessarily come back in a green economy.

This is especially true of energy-efficiency products. A major supplier of compact florescent light bulbs for General Electric has a manufacturing plant in southern China. This plant had been breaking numerous Chinese labor laws and did not inform workers on safety concerns for handling the mercury found in the bulbs.

2. US Subsidies Benefiting Offshore Manufacturers
US Law requires domestic sourcing for many programs and agencies, including the Federal Highway Administration, the Federal Aviation Administration, Clean Water Grants for Water Treatment, and the Energy Policy Act of 1992. The renewable energy investment and production tax credits however do not have this stipulation, thus these subsidies may end up benefiting foreign markets more than local ones.

Many renewable energy products are not manufactured domestically, despite their size. For example TDI Composites manufactures wind blades in China that are in part intended for the US market despite PR statements to the contrary.

3. Low Wages
Not all green jobs pay a lot of green, even when receiving generous local subsidies. A recent study of green jobs found recycling plant workers making as little as $8.25 an hour and manufacturing jobs in renewable energy products paying as low as $11 an hour.

On the bright side, there are companies like Sanyo Solar that are paying $22 an hour. This however was a stipulation in them receiving enterprise zone benefits.

Reprinted with permission from Triple Pundit.

During these last months we've witnessed the implosion of capitalism as usual. In the process some basic assumptions have gone kaboom, for instance, the notion that you can repackage and sell highly questionable  loans, and that as long as you keep them moving from one owner to the next, they'll never come back and bite you in the assets.

 

 

Over the course of the centuries, countless opportunists and ne'er-do-wells have based their lives on the proposition that "I may be worthless in this town, but in the next town I'll be okay." Ironic as it seems, a similar intuition appears to have been fueling the titans of Wall Street. Just keep on moving that debt downstream and everything will be fine!

Only it's a small world now, and the frontier isn't limitless, and the bucks have stopped here and brought down the house.

It's not entirely a bad thing when a system collapses. The destruction of the old makes room for the new: you can't have a phoenix without ashes.

We now have a once-in-a-lifetime opportunity to erect a sustainable economic system—which is to say, an economic system that's dramatically different from the one that we're witnessing in its death throes.

Kudos to the Obama Administration for pledging to make clean tech and green jobs centerpieces of the new economy.

However, a truly comprehensive sustainability makeover would do more than that. It would address all the deep structures of our current economy that have made it so unsustainable.

Here's my starting list of what would be required to create a truly sustainable economy.

Make It Real. Assets need to have real value. This is a complicated subject, too complicated for a post of this length (never mind my easily boggled brain). The basic point is this: don't pass off junk as having value. Sustainability requires assets to have verifiable worth.

Make It Sustainable. The economist E.F. Schumacher said it years ago: small is better. Local is also almost always better, too—it builds community, and it also reduces the financial and environmental costs of shipping things around the globe. In an increasingly carbon-challenged world, that's no small matter.

The current economic system favors the big, global players. We need to do more than support clean tech and green jobs. We also need to tilt the playing field to favor the small and local.

Police the Bad Actors. The last few news cycles have been dominated by stories about fraud on a massive scale. The financier Bernard Madoff was arrested for running a $50 billion Ponzi scheme, while prominent New York City lawyer Marc Dreier was arrested for a $100M fraud that involved, in the words of The New York Times, "selling phony debt to hungry hedge funds looking for deals." By today's $700 billion bailout standard, $50 billion is chump change, and $100 million is even chumpier. Still, scandals like these say a lot about the culture of corruption on Wall Street.

While there will always be criminals and con men, we seem to have been doing an especially good job these last years of creating a culture (in the sense of a petri dish) for bacteria like these to thrive in. In a sustainable economy, we'd throw the book at the crooks, and we'd also work night and day to put an end to the culture that sorta kinda makes it okay to betray people's trust in the first place. Corruption and sustainability are incompatible.

Transform the Story. Capitalism isn't only about externalities--the free market, or the rules and regulations (or lack thereof) that govern it. It also has an internal aspect: it's an idea that inhabits our minds.

For years, our story about capitalism has been what Professor Ed Freeman of the University of Virginia has called "cowboy capitalism." It's a model that "conceptualizes business as a competitive jungle resting on self-interest and an urge for competition in order to survive." 

As Freeman himself has pointed out, that's not the only possible story about capitalism. The free market can also be tethered to the greater good. Why not a more ennobling story about capitalism that brings an end to the historic schism between greed and service? Why not a narrative about capitalism that positions it as the engine of green and ethical change?

A softer, more gentle capitalism is not necessarily a weaker capitalism.

And this isn't just talk: models are emerging. There is the ascendance of socially responsible business, which we might think of as "greener business," and there is also the still bolder concept of the social enterprise, which marries the wealth-creation mission of business with the service mission of the non-profit sector. The leaders of the Obama Administration should use the bully pulpit to espouse both of these approaches and in the process help to foster the emergence of a new narrative about the nature and purpose of capitalism.

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Are these idealistic views realistic? Are these things achievable? In my view, yes. It wouldn't cost a lot of money to tilt the playing field toward small and local. As for propagating a new story of capitalism, the total cost of that would be a few well-chosen sentences at an Obama press conference plus whatever time it takes to develop favorable legal and financial incentives for socially responsible businesses and social enterprises.

Nor should we forget that this appears to be a time of rare consensus, when people at all points along the political continuum agree that we can only get out of our current mess by pursuing dramatic change. The diem is here and it's ripe for the carping.

The one thing that's required to push the "go" button on all this is a slight but crucial shift in focus. Instead of simply applauding the Obama Administration for its laudable eco-plans, we need to also be asking, Are clean tech and green jobs alone enough to make our economy truly sustainable? If not, what's missing? What else do we need to do?

You get the right answers by asking the right questions, and you get the right questions by looking through the right lens.

The lens is the first step.

The lens is everything.

 

Image courtesy of Wikimedia.

 

With economic hiccups striking across the developed world, people everywhere are looking for a refuge from the storm. Job-seekers looking for places to work in growth industries with good job security, investors are looking for places put their assets that will protect and hopefully grow their wealth, and local communities are looking for businesses that will bring in income without harmful consequences. And for all three demands, the clean energy industry seems to be an ideal supplier.

But a recent op-ed in The New York Times by notable feminist author Linda Hirshman has decried the prognosticated boom of environmentally-friendly employment as distinctly biased toward men. Hirshman writes, "Mr. Obama compared his infrastructure plan to the Eisenhower-era construction of the Interstate System of highways. It brings back the Eisenhower era in a less appealing way as well: there are almost no women on this road to recovery."

Talk about hearkening back to the Eisenhower days—it's difficult to even know where to begin to dismantle this generalization. Overlooking the outdated notion that construction jobs are a purely male pursuit, it's important to note that green jobs are more than just construction workers. Engineers, investors, designers, lawyers, consultants, accountants, human resources staff and all the other jobs supported by conventional business are still part-and-parcel with the green collar work-force, and these careers include millions of women.

Furthermore, women will be holding two of the highest-level green jobs around. Barack Obama nominated Lisa P. Jackson (pictured) to head the EPA, while Carol Browner will advise the president-elect on energy and environment.

At any rate, the negative impacts of the current economic downturn have fallen disproportionately on workers in the fields Hirshman stereotypes as being traditionally male. The Boston Globe provides a damning set of statistics to back this up: in past year, 1.1 million male workers have lost their jobs, while over the same time period, the number of employed women jumped by some 12,000.

Green collar jobs certainly aren't meant to be slot-for-slot replacements of present day employment, but the fact remains, these layoffs have left the the current pool of available labor overwhelmingly male.

But what is perhaps the most irritating aspect of assigning a gender bias to the new green economy is that it seems to deny that the contributions to the economy will  be good for all prospective hires, regardless of gender. In the boom years before the recent recession, the currently suffering construction and financial services sector brought income into the pockets of American consumers, which was then spent on good and services produced at least in part by American workers across a wide swath of industries. Regardless of who cashes the checks, the restoration of that income will be what reinvigorates our flagging economy.

So while gender equality should remain a serious consideration of any wide-based job creation package, ghettoizing the green sector as a purely male enterprise not only reinforces outmoded stereotypes, but also has the potential to severely hinder an enterprise that will likely form the linchpin of the forthcoming economic recovery.