The Green Journey Starts at Home ™

With Congress struggling to find consensus on most issues, Reps. David McKinley (R-W.V.) and Peter Welch (D-Vt.) today found common ground by introducing bipartisan energy efficiency legislation that will create jobs, save homeowners money and benefit the environment.

The Home Owner Managing Energy Savings (HOMES) Act will provide rebates to homeowners who invest in energy efficiency improvements. Homeowners who demonstrate a 20 percent energy savings will receive a $2,000 rebate. For every 5 percent in additional energy savings, they can receive another $1,000 – up to a total of $8,000 or 50 percent of the project’s cost. The legislation is modeled after the Welch-authored Home Star Energy Retrofit Act (H.R. 5019), which passed the House with bipartisan support in the 111th Congress.

I am listening to Rick Santorum, GOP candidate, talk about energy conservation. He is trying to make the argument that there is a direct correlation between energy consumption and a societies standard of living. He says that we do not need to worry about energy conservation and that global warming is a hoax. He implies that energy consumption is good, since this correlates to economic progress.

Seriously? Do people really believe this drivel?

Santorum is misguided and fails to grasp the global significance and importance of becoming a leader in energy conservation and alternative energy. This is a rapidly emerging market that we will fail to have a major part of if we don’t actively engage and take some ownership in. If we don’t create and own this market, you can sure bet the Chinese will with their current billion dollar investments in alternative energy.

Santorum’s argument that there is a correlation between economic progress and energy consumption, was how things were early in our countries history as our economy evolved from agrarian to industrial. US consumption of energy per capita was high during the smoke stack days of the industrial revolution.

We’ve evolved out of this economic era, although it is abundantly clear Rick Santorum’s thinking hasn’t.

From Scientific American …
“Slow Money” is the name for a movement started by socially conscious investing pioneer and author, Woody Tasch, who essentially borrowed the conceptual framework of “Slow Food”—whereby participants eschew convenience-oriented “fast” foods, instead filling up their plates with traditional, unprocessed and, ideally, locally produced foods—and applied it to personal finance and investing. As such, Slow Money is dedicated to connecting investors to their local economies by marshaling financial resources to invest in small food enterprises and local food systems.

http://www.scientificamerican.com/article.cfm?id=slow-money-small-local-food-enterprises

The clean tech race is on. While the Chinese are investing heavily in clean technologies and in the process creating jobs….what are we doing? We are overturning environmental initiatives. We have groups such as the Tea Party who are well financed by the oil companies trying to overturn environmental regulations in states like California. They claim it is about protecting jobs, when in fact it is about protecting oil company profits. And meanwhile the Chinese have clearly defined strategic goals to make clean tech a pillar of their society.

The arguments that environmental protection hurts job creation reminds me of India after the British were kicked out. India closed their borders from foreign trade and taxed heavily any imports. This was about protecting jobs and foreign intervention. Many of the jobs within India were in protected industries. Over the years India fell increasingly behind the rest of the world. Inefficiency and poor quality became the norm.

The parallel here is that China is progressing ambitiously towards a Green future. And what are we doing? We have groups that are protecting the interests of the oil companies and in so doing, we’ll stand the risk of increasingly falling behind in clean technologies.

See Thomas Friedman in the NYTimes

The future of fossil fuels look problematic. People keep discussing proven reserves and whether peak oil already has arrived or not. What is most important is the fact that – no matter how much additional oil we can still retrieve – future barrels will be much more difficult to extract relative to the past.

This is expected to result in a rapid increase in oil prices from a decline in the availability of cheap and easily accessible oil sources. Our prices today are artificially constrained by the global recession. When the recession passes, prices of oil can be expected to soar.

Loyd’s of London, the world’s leading insurance market, recently published a report stating that businesses are underestimating the catastrophic consequences of declining oil.

Ron Oxburgh, a former chairman of Shell, wrote that “It is pretty clear that there is not much chance of finding any significant quantity of new cheap oil. Any new or unconventional oil is going to be expensive.” He went on to quote King Abdullah of Saudi Arabia commenting on a new oil find: “Leave it in the ground…our children need it.”

Loyd’s of London warned of “catastrophic consequences” for businesses that fail to prepare for a world of increasing oil scarcity and a lower carbon economy.

The Guardian paper wrote “The Lloyd’s insurance market and the highly regarded Royal Institute of International Affairs, known as Chatham House, says Britain needs to be ready for “peak oil” and disrupted energy supplies at a time of soaring fuel demand in China and India, constraints on production caused by the BP oil spill and political moves to cut CO2 to halt global warming.”

A similar warning was written in an earlier piece by the Wall Street Journal.

http://www.guardian.co.uk/business/2010/jul/11/peak-oil-energy-disruption

What does Minneapolis have in common with Portland OR, Boulder CO, Austin TX, Madison WI, San Francisco CA, Burlington VT?

Minneapolis is considered to be one of the top 10 Green cities in the nation.

CBS News reported last month that one of its news crews was threatened with arrest for trying to film a public beach where oil had washed ashore.  This is not an isolated incident.  There are numerous cases being reported in the Gulf where the press is being denied access to film the oil damaged beaches and oil slick.

There is a no-fly zone over the slick and pilots must petition the FAA for approval to fly over the area.  They are being consistently denied access when they state that there are reporters on the aircraft.  Even Senator Nelson, who had planned to take a Coast Guard Vessel out to the site with reporters, was told hours before the departure that the press would not be allowed.

Scientist are equally frustrated by the lack of access that they have to the to the area.

The National Oceanic and Atmospheric Administration said Monday that the planet’s average temperature for April was 58.1 degrees Fahrenheit, the hottest for any April on record. The more we keep pumping greenhouse gases into the atmosphere, the more we expose ourselves to a sudden, unpredictable climate disruption. The more we blithely remain addicted to oil, and not face up to all its negative geopolitical and environmental consequences, the more we invite sudden catastrophes like the gulf spill.

–from the NY Times.

Minnesota Governor Tim Pawlenty signed a bill last month that included provisions for Property Assessed Clean Energy (PACE).  This program will allow home and business owners to make energy efficiency property improvements that allow for immediate energy savings. The energy savings from the improvements will offset the costs of the investments — through lower building and home operating costs.  PACE effectively means you can do what is necessary to achieve comfort and energy savings in your home or building immediately, but spread the cost over 20 years by adding it to your property tax bill.

We believe PACE is a brilliant and creative financing solution for motivating the energy efficiency markets.  What has kept the markets constrained in the past was the concern of most home and building owners, that they would not live or own the building long enough to  warrant making the improvements necessary.  Why invest in a photovoltaic panel or new set of windows, if the payback period on these is 15 years, but you believe you may only live in your home 5 years?  PACE removes this obstacle.    You can make the necessary energy efficiency capital improvements to your home and not be burdened with the personal debt.  Instead these improvements are assessed directly against the property and remain with the property after the homeowner sells.

The PACE program is new to Minnesota (but has been adopted in 20 states) and many of our towns and cities are just now trying to figure out how they will implement it.  We see PACE as important and a tremendous opportunity for our clients and constituents.  At the Green Home Doctors we will be staying close to this issue and will keep our clients and friends aware of our insights around how PACE unfolds in the state.