In a sobering, yet alarming report delivered by the United Nations’ International Panel on Climate Change in March, the deleterious impacts caused by carbon emissions stood to produce far worse effects on our environment than were predicted. Whether we accept it or not, the fact is that our environment is changing rapidly. Already, climate change is impacting lives across the United States – from epic droughts that are laying destruction to our nation’s beauty to the devastation caused by Superstorm Sandy in the northeastern region nearly two years ago. With those images, we cannot deny that we are witnessing the impacts of our changing climateFaced with this reality, it will take a monumental and collective effort to mitigate and reverse climate change’s march to global ruin. Particularly, it will take the work of the largest producers of carbon emissions around the world – United States, China, and India to name a few – to begin to reverse the trend of climate change. But before President Obama lectures the developing world to combat climate change at this week’s climate summit at the United Nations, shouldn’t we lead by example and reduce our impact on the environment first?
In my opinion, it is an emphatic yes.
It will take a Herculean effort to accomplish this feat; but it is not without precedent. When the U.S. faced its worst economic challenge in the modern era, President Franklin D. Roosevelt mustered resources of the government to put their citizens back to work through federal programs. This was called the New Deal. Therefore, to face the worst environmental challenge of our modern times, we must enact a “Green New Deal”.
The combination of an ailing environment, inconsistent economic growth, and stagnant wages at home calls for an unprecedented action to combat climate change while putting Americans to work in well-paid jobs. Like the New Deal that was promulgated and implemented during the Great Depression, the Green New Deal would call upon the government to fund projects and initiatives that can reduce our nation’s energy consumption and carbon emissions, by extension. In turn, this investment would help to create jobs and the savings generated could be reinvested into wage increases over time.
What would the size of this investment need to be to make a real difference? One could argue that the American Recovery and Reinvestment Act of 2009 (ARRA) was a step in the right direction for climate change mitigation. However, out of the $787 billion appropriation given by the government, a mere 5 percent of that was devoted to environmental/energy grants and tax incentives. That investment was not nearly enough to make an impact on reducing carbon emissions. According to a report published by McKinsey & Company, a global consulting firm, before ARRA’s implementation, to reduce the U.S.’s carbon emissions by three gigatons, it would require “approximately $50 billion annually through 2030,” which would equate to “$1.1 trillion” over that time span. Therefore, we would need the entire appropriation given through ARRA and over to begin to deal with this challenge. Would the political makeup of the current U.S. Congress find this kind of expenditure palatable? To me, an investment of this size would be immediately dismissed. Given the federal government’s retrenchment from spending large sums of taxpayer money, it is obvious that an investment of this size cannot come from them alone. Therefore, the federal government should act as a facilitator to attract new sources of capital.
An investment of this size requires innovative ideas and multiple sources of capital; but this investment should begin with the federal government. Akin to the infrastructure bank concept floated by the Obama administration in 2011, the government should create a climate change bank. The federal government could provide seed funding to initiate the fund, which would then leverage funding from local, state, and private sources of capital. The funding should be used for implementing energy improvement projects and job training programs to train workers on energy efficiency concepts, practices, and improvement technologies and measures. Such efforts should be implemented on the local and state levels of government through municipally-managed programs and state energy offices. Through this bank, both residential homes and commercial building operators can apply to get access to its funding, which can be administered by local and state authorities, in order to implement energy-saving projects.
Reducing our carbon emissions by three gigatons through a “Green New Deal” will be both easy and challenging at the same time. While there are many low-hanging fruits to latch upon to reduce energy consumption (improving lighting, adding insulation, replacing inefficient mechanical equipment), this is not as simple as it seems.
I see two major challenges facing the success of this plan. The first challenge will come in convincing building owners that these improvements reduce their energy consumption. There is still an energy efficiency gap to overcome in our society, where people will require proof that reducing energy consumption translates into tangible savings. As one form of proof, the program I administered on residential energy efficiency, Long Island Green Homes in Babylon, New York, conducted a post-retrofit study of homeowners who retrofitted their homes. By examining utility data before and after the retrofit, we determined that homeowners garnered on average approximately 77 percent of the total savings we quoted them. This shows that energy efficiency can reduce energy consumption and produce guaranteed cost savings. The second challenge is convincing local and state governments, who are also facing a capital resource quandary, to implement programs to combat climate change. Strictly from a cost analysis standpoint, we must weigh the cost of inaction against the cost of action. In the aftermath of Superstorm Sandy, the total cost in property damage was approximately $70 billion, which is nearly $20 billion more than the annual investment needed to reduce our carbon emissions by three gigatons over the next 16 years. From one disaster alone, we have already lost one and a half years’ worth of investment into climate change mitigation. Therefore, if local, state and federal levels of government want to continue paying insurance claims from natural disasters, we will be paying more sums of money as storms become stronger in intensity.
Reversing the trend of climate change is a moral imperative. The U.S. must lead the world in showing that it can reduce its carbon emissions in a cost-effective manner. Bringing stakeholders together in the local, state and private arenas can help to bring diverse sources of capital and human resources together to finance carbon-reducing projects. Through this, we can put more Americans back to work in the following types of ways: training energy auditors to identify energy-saving opportunities in buildings; certifying building performance analysts to install weatherization measures in homes; and putting electricians to work installing solar panels on commercial and industrial facilities. Together, employing more Americans in climate jobs will help reduce our carbon footprint significantly. All it will take is a modern incarnation of the New Deal to make our world a better place.