by Zachary Rybarczyk
Scaling up energy efficiency retrofits around the U.S. could save an estimated $1 trillion over the next 10 years while creating 3.3 million job years for a wide range of skilled workers, according to study released this week from Deutsche Bank and the Rockefeller Foundation.
The study, “United States Building Energy Efficiency Retrofits,” calculates the massive economic impact a $279 billion investment in energy efficiency would have. Along with saving consumers money and boosting economic productivity, the investment would also reduce carbon dioxide emissions by 600 million metric tons — or about 10% of current emissions.
Here’s a run-down of the impact in each sector:
The majority of economic savings, GHG reductions, and direct and indirect “job years” would be created in the residential sector. Analysts at Deutsche Bank and the Rockefeller Foundation estimate that residential building stock could be made 30% more efficient by retrofitting all buildings built before 1980.
So how to get there?
Deutsche Bank also explores financing models that could facilitate the expansion of energy efficiency retrofits at such a massive scale. Here’s a great summary of some of the top models currently being used in the U.S. (click on graph to enlarge):
- Over the past few years, there have been new emerging financing structures, such as Energy Service Agreements (ESAs), Property Assessed Clean Energy (PACE), and On-Bill-Finance options, which offer significant potential to address historical barriers and achieve scale across the different market segments.
- These provide additional options beyond Energy Service Companies (ESCOs), which operate primarily in government markets (which include both commercial and institutional segments).
- PACE has potential as a model for all segments, but it requires significant regulatory support and acceptance from the mortgage industry. On-Bill Finance could be utilized with enabling regulation or used as a mechanism to enhance other financing models across the three building market segments.
While the report authors conclude that the market will continue to scale without additional changes in policy, they recommend a focus on stronger local policies and regulations that will “dramatically speed this process.”
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Financing the extreme effort to stop emissions and restore the environment at wartime speed will be the place where financial institutions will show their real worth and make money.
Lessee…. financial institutions earn money when
(A) they finance oil and coal companies to pull oil and gas for home heating out of the ground, or pull out coal and gas to make electricity for home cooling;
(B) Homeowners use their credit cards to buy heating oil or natural gas to replace the BTUs lost thru their walls or due to stack-effect, and in the cooling season use their credit cards to remove excess BTUs that got managed to get in
Yes, over the short term they can make money financing efficiency renovations, but I fail to see how that replaces the profits I just described over the longterm. I’m not saying this to bitch or be cynical, rather I’d really like to know how the banks can hold their profit margin steady if we change the paradigm to one of high efficiency?
Why would they do it? Because people pay money for efficiency retrofits for their own personal investment. That means there’s money to be made in doing these retrofits. And considering the possibility of government-mandated standards being put in place, this would further increase financial incentives to get in on this.
There will always be money to be made in building energy, regardless of its efficiency or source, and considering the huge numbers of people starting to have access to electricity around the globe, there is definitely money to be made for obvious reasons.
There is even a roll for a Green Component of the military and defense dollars in this effort of National Security.
Seems obvious that the smart money will move quickly to address climate change.
Government can provide extremely fertile ground for doing this but is so far severely lacking.
The conversation right now should be:
“What do we do?
We wait for the climate Pearl Harbor?
Then, clean up the mess and terrible waste and reduce emissions at wartime speed while restoring the environment.
Or, do we start doing it now and hopefully reduce a lot the terrible waste and severe hardship?
Obviously, the is a sign of good governance and for that matter good management in the private sector as well since it is the rational most cost-effective solution while reducing the risk of loss.
The “climate Pearl Harbor” was Hurricane Katrina and her sisters.
The attack was thoroughly predicted. In a tactical sense Katrina was prepared for, but none of the government agencies functioned as they should have. (Which is odd in that it was so consistent/common.)
Standing around doing little or nothing will result in the relative near term in chaos and social disintegration.
So, at what point do we begin to suspect that there are those who desire such an outcome? This is a bizarre idea, but at some point you have to wonder.
My personal hypothesis is that global warming, horrible as it will likely be, is really just….if just is the right word…. just a symptom of our infatuation with nonstop growth. I don’t really think anyone wants the global warming horrors, but deep thinking about this stuff inevitably leads to questioning the notion of growth. I don’t think the powerful and wealthy can conceive of a non-growth dependent world, and I think their emotions simply abhor that very line of thinking. And so merrily we go. I was listening to Zap Mama today. “The boat goes to the bottom, to the bottom. And nobody reacts, standing in the middle, if the boat goes to the bottom.” The change we need ain’t coming from the top down, and all solutions are stop gaps if they don’t question nonstop growth. See Joe’s prior posts about the global ponzi scheme.
fj, what makes you think that the Masters will put easy mega-profits, from businesses that they dominate, aside, for the risky process of investing in industries that they do not already dominate? What makes you think that they give a stuff what happens in thirty years, when they will be dead? And what makes you think that they are not looking forward to ecological collapse, if only to bring about that Malthusian cull of the ‘useless eaters’ that they have been discussing in their transnational cabals for decades?