Privatizing Change

http://www.nytimes.com/2011/09/20/business/energy-environment/tax-plan-to-turn-old-buildings-green-finds-favor.html?_r=1&ref=earth

The article I chose for this discussion question presents a way to privately finance environmentally friendly upgrades to older commercial buildings that are inefficient energy consumers. The plan is being executed by a business consortium led by Ygrene Energy Fund, a clean energy financing company. Ygrene has paired itself with big names such as Lockheed Martin and Barclays Bank to undertake these projects. The group takes advantage of a tax arrangement that allows commercial building owners to upgrade their properties with no upfront cost. The companies pay for the projects through property-tax surcharges but save money in the long run due to decreased energy usage and thus smaller utility bills. Their plan is currently being implemented in Miami and Sacramento. Lockheed Martin is expected to take command of the engineering plans on the larger projects and Barclays will provide short term loans to finance them.

I really like this idea for a few reasons. Instead of focusing on building new green buildings with newer technologies, it focuses on improving what we already have with proven technology. If these projects are able to become widespread the reduction of each community's carbon footprint could be significant. The article notes that the refurbishment of the Empire State Building decreased its energy usage by 40% and made it one of the greenest buildings in the city. That is an incredible improvement and it's only one building. Imagine if these changes were able to be implemented on even a third of the buildings in Manhattan. The difference would be staggering. The head of energy programs at the Environmental Defense Fund is quoted as saying that if this is done correctly, one third of the coal plants in the U.S. could be shut down. While this might be an ambitious goal, it's at least refreshing to know that it is not completely far-fetched.

Another, perhaps more important, reason that I believe that this is a feasible option is because it avoids political involvement. The article notes that no money is needed from Washington or the state governments, which is very significant since climate change matters are not seen as having great importance at the moment and funding is sparse compared to what it could be. Therefore, this plan circumvents what might be the greatest obstacle to combating climate change in this country: the bureaucracy. In addition to not being reliant on government funding, it also would create thousands of construction jobs, which would also help to further stimulate the economy. If this idea continues to spread, the opportunities for expansion are nearly endless since the country has such an expansive infrastructure and an overwhelming amount of commercial properties.

Finally, the article mentions that the plan was originally devised to be applied to homes, which is an interesting option to explore, but gets hung up on legal issues. So for now, I believe that this is the kind of change that needs to happen immediately because it can have instant impact.