Daily Score Blog

Someone recently said “energy efficiencies aren’t low hanging fruit, they are the fruit lying on the ground.” Then why don’t people retrofit their homes? There are a lot of reasons, but one of them is finding the money to pay for efficiencies up front. While innovative financing tools (like my favorite bond financing) can help, they are only part of the solution.

An article in the New York Times this week called “A Stimulus That Could Save Money” traverses a well worn path in the discussion of energy efficiencies, asking the question “what will make people retrofit their homes?” The article doesn’t have any shockingly new ideas, but the discussion does surface the concept of Property Assessed Clean Energy financing—or  PACE. 

Now, sidestepping for a moment the obvious answer, “you can sell the energy efficient home for more money,” PACE is an interesting way of paying for the retrofits as part of regular property taxes. This is another version of “on bill” financing that puts the payments back on the owner’s property tax bill rather than on their utility bill.

Eureka! I have discovered a huge new source of clean energy in Alaska that can create green jobs too. Well sort of.

I’m not the first to strike gold, but lately I’ve been describing the potential of energy efficiency like hitting the jackpot. Efficiency is a clean, domestic energy source that would add, in the next decade, $1.2 trillion dollars to the economy. The big numbers (like saving 9.1 Quadrillion BTUs in Two Minutes) get people’s attention. If the kind of economic impact we could gain from energy efficiencies was a natural resource buried in the ground, you can bet that every level of government would be trying to dig them up.

Editor's note: The following is a profile from Sightline's green-collar jobs primer. Read more about what makes a green-collar job and how we can create more in the Northwest.

Michael McCormick poured his first home foundation more than three decades ago. Since then, he’s built everything from starter houses to mansions to a transplanted English castle.

At 55, he understands the importance of keeping his skills up to date. So he went back to school five years ago to update his blueprint reading skills and knowledge of ever-changing building codes. The collapse of the Puget Sound housing market coincided with his graduation.

For nearly three years, McCormick has done whatever he could to pay the bills and advance his career: taking classes in construction management, doing odd remodeling jobs, building decks, even falling back on a former career cutting hair.

Then he heard a Presidential candidate named Barack Obama talk about green-collar jobs as a way to fix the country’s crumbling economy.

Last Saturday, two stories about green jobs caught my eye. One was in the Washington Post and the other in the Seattle Times.  The Post article was a hand-wringing affair about the failure of energy efficiency efforts funded by stimulus dollars to create any of the promised green jobs. The Times article was a bit more positive, reporting about a training program I wrote about in a post titled Labor Sees Green Job Opportunity. The Times piece highlighted the first graduates of the program, created by the Laborers' International Union of North America (LiUNA) to train weatherization workers. But the Times piece also asked the crucial question of one of the graduates, “will you be able to get a job?”

The graduate, Ahmalik Claiborne, answered, "I'm sure I can get a job . . . We are at the start of something good." Not everyone is so optimistic. But it is important for our region’s problem solvers not to give in to pessimism. The fact is, our region is ahead of the rest of the country and getting green jobs right is better than getting them right now.

Early this week, President Obama gave a speech touting the $3.4 billion in grants the federal government has awarded to local companies, utilities and cities working to improve the country’s aging and outmoded electric energy grid. The awards will support “smart grid” technology that enables easier and more effective transmission of electricity from one region to another. One of the recipients is Pacific Northwest Generating Cooperative (PNGC), a Portland-based electric generation and transmission cooperative owned by 16 Northwest electric utilities. The grant will fund installation of “95,000 smart meters, substation equipment, and load management devices that will integrate electric cooperatives across four states using a central data collection software system hosted by PNGC.”

But will all the smart grid money create green collar jobs?

Unfortunately—and surprisingly considering unemployment rates—according to a recent report by the National Commission on Energy Policy, smart-grid investment will require trained workers who aren’t yet available in large numbers.

A study released over the summer found that there are some great opportunities in Washington state for green jobs in the renewable energy sector. But it also pointed to some problems ensuring adequate training for those jobs.

The study confirms what Professor W. Norton Grubb found: work force training needs to be better integrated with education. Training is about learning tasks or work related skills that allow immediate employment while education is grounded in more broadly applicable skills like reading, writing and organizational skills.

The education training dichotomy is one aspect of the fragmentation that plagues work force training and by extension training for green collar jobs. Grubb’s ideas, creating better connections between education and training, are still relevant today more than a decade after he wrote about them in his book Learning to Work.

Very few of the stimulus dollars allocated for energy efficiency -- and the green jobs they can create -- have been allocated or spent by governments. At first this might seem a bit discouraging. Lots of money allocated but caught up in the bureaucracy of federal, state, and local governments. However, a look at green stimulus funding in the Northwest is more encouraging, with some cities and local agencies starting their work off on the right foot. 

A recent report by London-based New Energy Finance has found that less than 10 percent of green stimulus money allocated worldwide has actually been spent by governments this year. That’s about $177 billion spent so far on supporting energy efficiencies, renewable energy and green jobs out of more than a trillion available. (The report found that the United States government has spent about 12 percent of its stimulus allocation thus far or about $7.92 billion dollars.)

Editor's note: The following is a profile from Sightline's green-collar jobs primer. Read more about what makes a green-collar job and how we can create more in the Northwest.

Before Greg Jordan graduated with a degree in environmental sciences from Portland State University, he imagined he might find a job working in stormwater control or restoring wetlands.

Instead, he spent his summer on a weatherization crew doing hands-on labor—slithering through crawl spaces, blowing insulation into wall cavities, sealing up air leaks—and loving it.

Out of a dozen program graduates, he’s only one of two who were able to quickly land a job in a tough economy. It wouldn’t have happened, he said, without a renewed attention and commitment to energy efficiency.

“Without the stimulus and the funding, I don’t think I would have been given this chance,” said Jordan. “The field is really just getting going. It’s been around, but finally people are realizing these little things make a big difference.”

He answered an ad placed by EcoTech LLC, an environmental services company with a background in pollution cleanup. It launched a new a business line in October 2008 in energy efficiency and weatherization.

British Columbians have one more thing to be thankful for this holiday. September employment figures for British Columbia are in and the news is good.  BC employment increased in September by 31,000 jobs with the unemployment rate dropping 0.3 percent to 8.4 percent. This is the first monthly decline in unemployment since the collapse of the global economy last fall.

Manufacturing businesses hired 5,900 people and the construction industry, especially hard hit by the recession, created 4,000 new jobs.

Today, Sightline released a primer on green jobs called Green-Collar Jobs: Realizing the Promise. Green jobs have been a much-discussed topic here and elsewhere. But what are they? Who has them? And how do we get more for Northwest workers?

A follow up to our popular Cap and Trade 101, Sightline's new primer explains what makes a green job, how investment in clean energy creates those jobs, and how Northwest leaders can build a green-collar workforce in our region.

Included in the primer:

Green-collar jobs are those held by employees who devote a substantial share of their work hours to activities that boost energy efficiency, increase the supply of renewable energy, or prevent, reduce, or clean up pollution.

The Promise

Green jobs can speed progress on three important challenges at once: economic recovery, job creation, and climate change. This is an enormous opportunity to ease our dependence on climate-warming fossil fuels while fostering lasting, broadly shared economic prosperity for local families.

The Plan

The biggest chance in the near term for green-collar job creation is in boosting energy efficiency in buildings. This is local work that saves energy. These are jobs that cannot be outsourced. Focusing on training programs for workers that lead to credentials or certifications and factoring training, employment, and formal education into career ladders will help grow a green-collar workforce that gets Northwest families on a track to prosperity in the clean energy economy.

Combining work training programs in fields like efficiency retrofitting or renewable energy with innovative financing programs will supply the workers, stoke demand, and secure funding for the green-collar economy--right here in our communities.

The Prize

Applying a comprehensive set of solutions can help the Northwest lead a green-collar economic recovery. Success won't be fully captured in higher quarterly earnings or a lower unemployment rate; it will be measured by whether the Northwest increasingly offers its residents a more sustainable way to live, with greater energy independence, fewer greenhouse-gas emissions, cozier buildings with lower operating costs, and good-paying jobs that provide paychecks with a purpose for local families.

Read more about the green jobs primer; check out profiles of northwesterners joining the green workforce; or DOWNLOAD the primer now.

It's a bit old now, but this report (pdf link) by researchers at the Peterson Institute for International Economics and the World Resources Institute offers some nice supporting evidence for the role of green jobs in the economic recovery. 

They found that every $1 billion invested in "green recovery" projects, such as mass transit, weatherizing homes, and greening schools...

• ...Creates 30,100 job-years.  In contrast, traditional infrastructure investments such as roads create only 25,200 job-years per $1 billion in spending. (A job-year, by the way, is a measure that incorporates both the number of jobs created and how long those jobs last. I wish that all job-creation metrics were so clear; we need good apples-to-apples comparisons for long-term vs. short-term employment effects.)
  

• ...Saves $450 million per year in energy costs -- meaning that the initial investments pay for themselves very quickly.  In the author's words:  "These future savings can serve as a sort of 'efficiency pay-go' for government outlays today," suggesting that if they're done right, energy saving investments can be largely self-financing.
  

And in case you hadn't heard of the Peterson Institute before, it was founded by former Nixon administration commerce secretary Peter G. Peterson -- a mainstream, old-school fiscal conservative.  And the report, in my view, takes a hype-free view of the economics of saving energy.  The fact that the authors found such clear job-creation benefits from saving energy makes me optimistic that, despite recent controversy, green jobs may be an issue that can bridge ideological divides. 

Quick opinion polling note as we roll into the autumn Congressional session.

Significantly, more people think these changes would add jobs in their state than believe jobs would be lost (36 percent to 15 percent). It looks like relentless conservative attempts to characterize the energy bill as a job-kill have so far failed to convince the public.

Support for a cap-and-trade system is steady. In June, there was a 52-42 support for this approach; today it’s nearly identical: 52-43 in favor.

Finally, Americans are more apt to see energy solutions in renewables and efficiency than domestic fossil fuels or nuclear.

Read the Center for American Progress analysis here.

Photo courtesy: jcolman, Flickr.com.

During Washington’s last legislative session, I wrote glowingly about a bill introduced by Representative Hans Dunshee that would have sold $3 billion in bonds for energy efficiency retrofits in public schools across the state. It didn’t pass. But what appealed to me was that this idea is a 3 for 1 deal. A win, win, win. It could reduce climate changing emissions, create much-needed green jobs in local communities (reviving a flagging economy), and save money on energy bills. In fact, it could create enough savings to pay back the bonds. I called it Green Increment Financing.

 Maybe this kind of far-thinking, money-saving, job-creating, innovative policy will pass next time around. Meanwhile, I have found out that this kind of financing is already happening in the Northwest—albeit on a much smaller scale—hundreds of thousands of dollars versus the hundreds of millions it would take to retrofit all schools. It’s called Energy Service Performance Contracting. Washington's General Services Administration and Oregon's Department of Energy have been doing this for awhile, and the model has existed since at least the 1990s.

When the American Recovery and Reinvestment Act (the stimulus bill) passed in April it included $3.2 billion in bonding authority for states in Qualified Energy Efficiency Bonds (QECBs). The QECB program was actually increased from the $800 million that was passed in October of last year. Most states and local governments in the Northwest haven’t yet figured out exactly how they are going to use this new capacity to borrow money for clean energy projects. But they know it’s a bandwagon to jump on for cost savings, energy savings, and job creation.

Here’s a quick review of how bonds work. Bonds are issued by government or a private entity and they are essentially financial instruments or loans of money based on conditions set by federal or local government. In the simplest terms they are debt, sort of like the debt you might take on with a home equity loan or a credit card. Like a home equity loan governments and businesses often issue bonds for improvements they can’t afford now but think will add benefit in the form of equity or increased ability to generate revenue. For governments there are specific requirements and stipulations about how much they can borrow using bonds and how they spend the money once they borrow it. Some bonds are issued with very low interest rates but they are also very low risk. Or the buyer (the party loaning the money) might get their return from their loan in the form of tax credits instead.

SustainableWorks is an energy efficiency program that uses energy retrofits as a neighborhood organizing tool. We wrote about this innovative program late last year and earlier this year when SB 5649 passed the Washington State Legislature. 

The SustainableWorks model is unique because it takes seriously the idea that retrofits can be a way of empowering local communities and neighborhoods through mobilizing themselves to save energy with retrofits.