You've doubtless seen ads recently offering you a $1,500 "stimulus federal tax credit" for 30 percent of the cost of putting in new windows. How the stimulus is related to windows might not be transparent to anyone less than wonky. But it's an important facet of the Obama administration's broader attempt to place retrofitting at the center of a new national energy policy.
The sexy side of environmentalism has never been about houses. We generally focus on cute animals (e.g. polar bears marooned on ice floes) or Hollywood disaster scenarios (e.g. The Day After Tomorrow). But the fact is that retrofitting houses to make them more efficient, through means that will create jobs, is the low-hanging fruit of the new environmental movement.
The new path was amply revealed in an exciting (if this is your sort of thing) report recently released by Vice President Biden's Middle Class Task Force and the White House's Council on Environmental Quality titled, "Recovery through Retrofit." The report puts the stimulus expenditures (such as the $1,500 windows credit) in a broader strategy.
The potential gains are pretty staggering. As the authors note, existing techniques and technologies -- that is, "business as usual" approaches -- can yield an incredible 40 percent energy savings per home, a reduction of 160 million metric tons of greenhouse gases by 2020, and total savings of $21 billion in home energy bills annually.
The report does the smart thing in modern progressive policymaking, focusing on how to use government to create a market that will allow entrepreneurs and consumers to find their own solutions, rather than imposing top-down measures that end up being inflexible and oppressive.
Consistent with this market-based approach, the report isolates three "market barriers":
There's a lot of good stuff in the report. On improving consumer information, it proposes applying the ENERGY STAR ® label, which has worked beautifully to help consumers purchase efficient appliances, to houses as well.
On access to financing, the authors suggest measures that would allow the cost of retrofits to be added into a homeowner's property tax bill, with amortized payments lower than the average utility bill. The cost (and value) of retrofitting would attach to the property, not an individual, meaning it would become part of the value of the house.
Finally, on worker training, the report advocates establishing uniform national workforce and certification training standards for retrofit workers -- familiar to anyone who's had to be licensed for a craft.
This is just a brief outline. You can check out the 12-page report for yourself here. It's not polar bears or a new ice age, but from windows to workers, it's a promising blueprint for change.
This piece has also been published at PPI's new website The Progressive Fix.
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Peter Diamandis: Most Valuable Real Estate in the Solar System
Today's announcement by NASA of significant water on the south pole of the Moon is scientifically critical, economically astounding and extremely important for the long-term future of humanity.
Property owners enter into contracts with private efficiency providers. Providers agree to assume responsibility for the owners' utility bills. Owners agree to pay the providers based on previous utility bills until the accumulated rate premium equals the quoted value of the providers' investments.
The greater the reduction in utility bills per money invested, the faster the providers recoup the value of their investments (including overhead) and terminate the contracts with owners, who then resume responsibility for their reduced utility bills.
Providers would compete to attract owners primarily based on how quickly they close contracts on average and therefore how effectively they invest in energy cost reductions. To this end, providers would work closely with contractors and owners to reduce energy consumption.
To finance these investments, providers auction "green bonds" on an open market. Government would be a major buyer of green bonds, especially to get the market going initially. Investors would also be attracted to providers that generate higher efficiency return on investment.
You can provide information about how to make your home more efficient, who can help you do it, and how to pay for it through tax credits and energy rebates. But people -- and I'm talking about people outside places like San Francisco and Boston -- need something to motivate them to care about making their homes more energy efficient.
Besides another huge spike in energy costs (a la 2008), it's tough to figure out how to get people to care. The model that I think has provided the best example for it is the national hysteria around "Cash for Clunkers". It's got to a really big deal and offered for a limited time only.