Maine Treasurer in Sun Journal: Maine should position itself for green economic opportunities

With elections concluded, policymakers can look forward and refocus on laying the groundwork for policy solutions to improve lives and tackle big challenges. Obviously, the top priority of Gov. Janet Mills and the Legislature remains a successful public health and economic recovery response to the COVID-19 pandemic. As this work continues, I also urge policymakers and state government to position ourselves for enhanced and more centralized strategies to finance renewable energy and its high-paying jobs, provide opportunities for consumers to save money and energy, and fund all other climate mitigation efforts.

Climate change poses a significant risk to Maine’s economy and financial position. Within the lobster and fishing economy alone, “Some $600 million in annual revenue from fisheries and aquaculture are also at risk from warming and acidifying ocean waters,” according to a draft report from the Maine Climate Council released in November.  Further, “Changing climate conditions create significant stress in Maine’s forests, which cover 89% of the state and supports an important forest industry sector that has $8-10 billion in direct economic impact.”

We now finally see leadership at the federal level on combating climate change. President-elect Joe Biden’s Clean Energy Jobs Plan calls for “developing innovative financing mechanisms that leverage private sector dollars to maximize investment in the clean energy revolution.” In the past six months, the House has passed legislation calling for national green bank known as the Clean Energy and Sustainability Accelerator that would provide $20 billion in funding to state and local green banks or equivalent entities across the country. Vice President-elect Kamala Harris co-sponsored partner legislation in the Senate.

For the last decade, more than a dozen states have experimented and perfected standalone green banks with impressive results, even with small amounts of funding. Here’s how a green bank works: The bank receives seed money that it then uses to leverage funding from the private sector, usually $2 in private money for every public dollar. This concept should not be confused with frequent proposals made in Maine to start a so-called state bank that is seeded with the state’s cash pool. Instead, seed money could be a mix of state funds, private investments, and most realistically, funds made available by the incoming Biden administration.

These combined funds are loaned to renewable power, building efficiency, grid infrastructure like transmission, industrial decarbonization, clean transportation, reforestation and climate-resilient infrastructure. Because the dollars are repaid over time, they can be recycled to make additional investments in the future.

Maine is not Connecticut, but our New England neighbor’s experience with a green bank is illustrative. Connecticut established a green bank in 2011. Since then, the green bank has used $260 million in public funds to generate $1.68 billion in overall investment in the state’s clean energy economy.

There may not be a need to reinvent the wheel. For decades, the Finance Authority of Maine has been supporting Maine businesses and ventures that need credit enhancements to grow and retain payroll and operations. The Maine State Housing Authority provides weatherization services and Maine people have long utilized funding opportunities from Efficiency Maine. These entities can all play a role and benefit from possibly incoming federal dollars.

Maine people pay federal income taxes, and Maine routinely prepares to accept and then utilizes federal dollars for health care, public safety and transportation. This situation should be no different.

At the very least, Maine’s business community and state government should complete an accounting of lending and investment needs and potential in our local green industries.

Fortunately, advocates in the State Legislature stand ready, and much work has been done by the Governor’s Climate Council. Rep. Stanley Paige Zeigler of Montville previously introduced ambitious legislation for a standalone green bank. Rep. Victoria Morales of Portland has led community efforts in her community and Portland and this session, Senator-elect Anne Carney of Cape Elizabeth will introduce legislation to improve green financing for homeowners, small landlords and small businesses.

Fighting COVID-19 and climate change and improving our economic position are all daunting challenges. We must be thoughtful and brave. Maine people, businesses and policymakers simply need to rise to the occasion.

Knowing Maine and its people, I know it is possible.

Henry E.M. Beck is Maine’s state treasurer.

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