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.
The jobs situation in America remains grim. This week saw a rise in the number of initial claims for jobless benefits, just as the virus is surging. And the number of “long-term” unemployed ticked up over 3 million. There are still 10 million fewer jobs prior to the pandemic. And the true number of those in need of work is far higher, with approximately 20 million collecting unemployment, and millions more out of the labor force entirely.
The measures put in place by Congress back in the spring have proven woefully inadequate to address the situation. One-off checks to families were spent long ago. PPP loans made to businesses in the hopes they kept employees on payroll were not large enough to sustain many. Bailouts to large corporations like airlines only delayed massive layoffs. And the Fed’s liquidity programs for mid-sized businesses were never used in the first place.
The strategy of putting the economy “into the economic equivalent of a medically induced coma” seemed sensible back in the spring. But this has lasted far longer than those short-term measures were designed for. Realistically we are not close to a return to normal, so we have to consider how to put people back to work safely so families can sustain themselves.
There are workers who cannot and should not work until there is vaccination due to health risks. This is where new, but sustained, relief spending is needed. But for others, we need genuine job-creating stimulus to put people back to work where it is possible to do so safely. The prior jobs in tourism, dining, and travel simply don’t exist anymore, though. So jobs in new sectors have to be created.
It turns out construction and clean energy are ideal places to put Americans back to work. Job creation in the construction industry writ large has been steady throughout the year, adding nearly 800,000 jobs back in the last 6 months. And even without a shred of federal support, nearly 200,000 clean energy jobs have been created in the last 5 months.
This is part of a larger global trend. Global renewable electricity installations will hit record levels in 2020. Ninety percent of all newly installed power generation capacity in the world will be renewable this year.
How is this possible during Covid? It turns out that outdoor construction work is relatively safe during the pandemic. And office buildings sit empty across the country, creating an ideal opportunity for safe building upgrades for efficiency and clean energy. And in OSHA’s categorization of risky tasks per occupation, it deems no construction-related tasks have a “very high” risk of Covid.
This all matches perfectly with the cornerstone pledge of President-Elect Biden’s campaign. Perhaps his most salient policy commitment was to invest federal funds in the construction of clean energy infrastructure to create jobs.
The Clean Energy Accelerator is the critical, flexible tool that Congress and President-Elect Biden must adopt to take advantage of this job-creating opportunity. The formation of this national green bank would create millions of jobs, mobilize private investment, create small businesses, and drive targeted investment to frontline and disadvantaged communities. The Accelerator has passed the House 2x this year, and is endorsed and co-sponsored by VP-Elect Harris.
Flexibility is key. The Accelerator can direct its investments into specific sectors, project-types and geographies to create jobs where and when its possible. The Fed’s liquidity programs are a perfect example of what happens when Congress appropriates hundreds of billions of dollars to a static program that misses the mark because the economic situation is fluid. So flexibility is essential. And because the Accelerator leverages 3 private dollars for each public one, job creation is also multiplied by 3x.
It’s no longer viable for federal spending to focus purely on pandemic disaster relief. This has gone on too long to ignore the task of job creation where it is safe and viable to do so. Nothing fits this need than construction of clean energy infrastructure, and no policy is more fit-for-purpose than the Accelerator.
The Clean Energy Accelerator, as envisioned in legislation introduced earlier this year and late last year, pairs each public dollar with multiple private dollars to expand clean energy’s reach in the US.
NOVEMBER 11, 2020 JEAN HAGGERTY
The likelihood that a federal Clean Energy Accelerator will be introduced by the Biden administration as a stimulus solution is growing. The solar and storage industries should be paying attention because the arrival of this type of financing mechanism could provide a massive boost.
Ushering in a Clean Energy Accelerator through the infrastructure bill, which is likely to arrive in January, also would set the incoming administration on a path towards meeting one of its key goals – achieving a carbon pollution-free power sector by 2035.
“A [Clean Energy Accelerator] could be a massive stimulus for the solar industry. If you do some rough back of the envelope math that means that solar and wind are going to have to grow from a 12% market share to a 75% market share in 15 years,” said Jeffrey Schub, executive director of the Coalition for Green Capital, a nonprofit that incubates and supports local green banks.
In addition to accelerating financing, green banks can help create jobs, build sustainable affordable housing, lower energy costs and adapt communities to withstand impacts from climate change.
Clean Energy Accelerator
A Clean Energy Accelerator lines up with what the Biden administration is trying to achieve – job creation, reduced emissions and equity, Schub said, pointing out that economic recovery, racial justice and climate change are three of the four topics highlighted on the Biden/Harris transition website. Confronting the Covid-19 pandemic is the incoming administration’s other top priority.
In its World Energy Outlook, released last month, the International Energy Association noted that solar PV is now consistently cheaper than new coal- or gas-fired power plants in most countries and that solar projects now offer some of the lowest cost electricity ever seen.
“I see solar becoming the new king of the world’s electricity markets. Based on today’s policy settings, it is on track to set new records for deployment every year after 2022,” Dr. Fatih Birol, the International Energy Association’s executive director said. “[And] if governments and investors step up their clean energy efforts in line with our Sustainable Development Scenario, the growth of both solar and wind would be even more spectacular – and hugely encouraging for overcoming the world’s climate challenge,” she added.
According to Schub, from a purely practical point of view, the Clean Energy Accelerator is a tool for dispatching aid to small businesses that can benefit from a transition to clean energy. House and Senate Republicans might be less likely to resist the idea because of its jobs and small business focus, he noted.
The Clean Energy Accelerator, as envisioned in legislation introduced earlier this year and late last year, pairs each public dollar with multiple private dollars to expand clean energy’s reach in the US.
Using this model, a state-chartered green bank could receive federal dollars and pair them with private capital to fund state and local initiatives that involve supporting renewable power, building efficiency, grid infrastructure, industrial decarbonization, clean transportation, climate-resilient infrastructure, etc… Because the public money invested is repaid over time, it can be redeployed.
“The leverage piece and running through non-governmental non-profit is important, but jobs and businesses are number one [priority],” Schub said.
Currently, 15 state and local green banks exist in the U.S. and about a dozen other states and cities are actively exploring launching one.
Against this backdrop, the Green Finance Institute, the Natural Resources Defense Council (NRDC) and the Rocky Mountain Institute are publishing a State of Green Banks Report later this month. Through the report, which will include a review of green banks worldwide, the partners aim to inform the development of a Green Bank Design Platform that they hope entities will be able to use to establish green banks.
“As an organization, we are working furiously right now to try to engage [state and local entities] to get them ready,” Schub said. It would be unacceptable if states that already have active green banks, like Connecticut, are ready to go and receive Clean Energy Accelerator money, while other state and local entities are not, he added.
Earlier this year, nearly 100 organizations voiced support for the Clean Energy Jobs Fund, which included a Clean Energy Accelerator in both its House and Senate versions. Letters of support for the Accelerator came from state green banks, start-ups, clean tech investors, utilities, energy industry trade groups, including the Solar Energy Industries Association and Energy Storage Association, and several environmental organizations, including the NRDC, the Sierra Club, Environmental Defense Fund, the Union of Concerned Scientists and Appalachian Voices.
ClimateWorks Foundation is providing the funding for the Green Bank Design Platform’s development and for the partners’ green banks review.
By STEPHANY GRIFFITH-JONES
US president-elect Joe Biden wants to massively increase investment in everything from clean energy to healthcare and housing. But his efforts will be hampered because the US lacks vital tools that its major competitors and allies rely on….To address the challenges America is facing — Covid-19, recession, inequality and climate change — Mr Biden should create a public investment bank. Without one, the US is trying to respond with one arm tied behind its back….We propose that an AIB should be independent, non-partisan and subject to rigorous regulation and government audit. It should be capitalised initially with up to $100bn to assure sufficient resources for its activities and aim at a high investment grade credit rating to access private capital markets at low cost. …At all times, it would allow grant resources and technical assistance to reach vulnerable communities. Those with significant populations of black, brown, indigenous people and others, are often marginalised and face a lack of access to credit, and disinvestment because of loss of industry or transition to clean energy, for example. Read the full piece online.
This weekend, President-elect Biden launched his transition, which highlighted four priority policy areas: beating COVID-19, economic recovery, racial equity and climate change.
Each of these alone represent urgent tasks for the American people and the new incoming administration, but just one looms largest as an existential threat to the continued viability and habitability of our planet: climate change. Addressing it must be a top priority for Biden and his team.
To do so, the administration should commit to funding a nonprofit clean energy Accelerator—based on the proven green bank model that invests resources into clean energy projects across the country. To get this done, Biden will need to wrangle with a divided Congress to get legislation passed.
Luckily, Congress has already shown it supports this idea. The clean energy Accelerator would be based on the National Climate Bank Act, which passed the U.S. House of Representatives with bipartisan support this year. It’s a smart, one-time investment that will pay dividends for years to come.
A nonprofit Accelerator will create 500,000 jobs with strong labor protections for every $10 billion of public capitalization, across seven sectors of infrastructure. Because it pairs public dollars with private sector dollars, this model allows for an outsized impact.
Biden’s stated climate plans overlap significantly with the benefits on offer from a clean energy Accelerator. On the issue of infrastructure, his plan calls for the creation of “millions of good, union jobs rebuilding America’s crumbling infrastructure.”
On the auto industry, Biden calls for the creation of “1 million new jobs in the American auto industry, domestic auto supply chains, and auto infrastructure, from parts to materials to electric vehicle charging stations” and more. An Accelerator will provide financing to businesses and consumers to adopt electric vehicles, spurring demand for American manufacturing.
On transit, Biden wants to “provide every American city with 100,000 or more residents with high-quality, zero-emissions public transportation options through flexible federal investments.” A clean energy Accelerator will finance conversion of public vehicle fleets, including busses, to electric vehicles, using innovative EV-fleet-as-service models to overcome adoption barriers.
In the power sector, Biden wants to “move ambitiously to generate clean, American-made electricity to achieve a carbon pollution-free power sector by 2035.” An Accelerator will mobilize private sector investment into multiple forms and applications of renewable power, including distributed solutions, in order to increase renewable power market share six-fold, which is required to reach the 2035 target.
When it comes to how Americans heat and power their homes and businesses, Biden has called for us to “upgrade 4 million buildings and weatherize 2 million homes over four years … by funding direct cash rebates and low-cost financing.” A Accelerator is the best practical means of accomplishing this goal, by working with lenders, housing agencies, weatherization partners and others to make buildings more comfortable with lower energy costs overall.
On housing, Biden wants to “spur the construction of 1.5 million sustainable homes and housing units.” A Accelerator will finance home electrification efforts to ensure new buildings are built to be sustainable from the ground up.
On agriculture and conservation, Biden wants to “create jobs in climate-smart agriculture, resilience, and conservation.” A Accelerator is specifically authorized to invest in natural climate solutions in forestry and agriculture, and can invest based on the necessary decades-long time horizon to make these projects work.
And on environmental justice, Biden’s goal is to “ensure that environmental justice is a key consideration in where, how, and with whom we build—creating good, union, middle-class jobs in communities left behind.” A Accelerator will have a specific mandate to direct 40 percent of its investment into underserved, frontline and communities of color, and as a nonprofit has particular capabilities to target investment into specific communities.
Every one of these goals is important for creating jobs, for climate and for justice. And every one of them needs a practical, proven and fast-moving implementation strategy to actually get the job done. The Accelerator, based on a decade of green bank experience, is the no-regrets policy needed to achieve these goals. Throughout his time in public service, Biden has sought to bring policymaking in line with his—and our—ideals of what this country can be when it is at its best. Now, as president-elect, he has another opportunity to do so through a new clean energy Accelerator.
There is consensus in the climate community that investments to combat climate change must prioritize communities of color, front-line communities, fence-line communities, low-income communities, historically disinvested communities and rural communities and enable a just transition to a clean future.
Today, the Coalition for Green Capital is releasing a new white paper illustrating how a National Climate Bank would expand on the success of state and local green banks efforts to invest in these communities, while opening up entirely new pathways for job and business creation in the most climate impacted communities.
The report is part of a series from CGC which analyzes the potential impact of a National Climate Bank, providing details, context and recommendations on its workings.
The full white paper is available here.
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