State leadership on clean energy/energy efficiency will create jobs
Job creation is one of Connecticut’s top priorities, and the creation of new jobs through energy efficiency and clean energy projects in schools, homes and public buildings should be a high profile initiative led by Gov. Malloy and supported by the Connecticut legislature.
Jobs that provide an energy or environmental benefit, also known as “green jobs,” are a key opportunity for the state. Over the last several years, a consensus has emerged among business, environmental groups, government and other stakeholders that economic growth, clean energy, and environmental protection must go hand-in-hand. Energy efficiency projects (such as energy-saving upgrades to lighting, insulation, heating, and cooling) clearly showcase this economy-energy-environment link. According to a recent economic study published by Environment Northeast, every $1 dollar that is invested in energy efficiency cycles through the local economy and ultimately generates $5 to $6 of gross state product.
Energy efficiency projects also create jobs directly. According to a 2009 report prepared for the Connecticut Clean Energy Fund and the Connecticut Energy Efficiency Fund, for every $1 million invested in energy efficiency in homes and office buildings, 7 local jobs are created. When you bring private sector investment into the equation, the benefits of energy efficiency get a lot bigger: experience has shown that $1 of public sector energy efficiency funding can leverage $5 of private sector investment. So for every $1 million of public funding for energy efficiency, the state can potentially create 35 jobs. The Clean Energy Finance Center has estimated that the state can create 20,000 jobs over the next ten years if adequate investment is made in residential, commercial, and public building energy efficiency.
Although our state has made notable progress on energy efficiency through its Energy Efficiency Fund and other public funding sources, we need to do a lot more. Current efforts are not well-coordinated and not at the scale that will drive major job development and energy savings. The reality is that the vast majority of businesses, school districts, and state and local government still do not have access to economically viable sources of clean energy financing.
Here are two important ways to jumpstart this critical initiative.
First, we need a high profile campaign led by the governor that brings to scale energy upgrades in state and municipal buildings and K-12 schools. Our public buildings, in particular our state buildings and schools, are highly energy inefficient, but have had limited options to finance improvements. We have estimated that through a proven financing tool called energy performance contracting, the state can create over 3,000 jobs over the next ten years while reducing energy use in Connecticut’s public buildings by 20%. Energy performance contracting uses mostly private sector investments to fund energy retrofits; the resulting monetary savings are guaranteed to cover the cost of loan repayments. The legislature must first pass legislation enabling the use of energy performance contracting in public buildings so we can get started.
Second, to realize the full potential of energy efficiency, we need to create a Connecticut Energy Investment Fund. The CEIF, which would be a non-profit or quasi-governmental agency, would bring together public and private sector sources of capital and be a “one-stop shop” for energy efficiency financing that would integrate current funding sources. Ideally, it would address financing needs for all sectors-business and residential, as well as state and local government. By increasing economies of scale and leveraging public sector dollars with private sector investment, the CEIF would lower the cost of financing for energy efficiency and other clean energy projects. One critical note–the Fund would use existing sources of public funds (including funding from the Connecticut Energy Efficiency Fund, Connecticut Clean Energy Fund, and Regional Greenhouse Gas Initiative auction revenues, among others), and therefore would not require any new allocation of public dollars. The same is true for the public building initiative described above.
If green jobs are as important as lowering the cost of energy in Connecticut, and if we seek a cleaner environment in the state, then a state-wide, high-profile initiative to promote energy efficiency should begin now.