Several states are floundering financially, according to a new report by the Pew Center on the States. Another recent report by the American Council for an Energy-Efficient Economy (ACEEE) cites energy efficiency as contributing to certain states’ bottom lines.
According to Pew, the 10 most troubled states are Arizona, California, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin, with Colorado, Georgia, Kentucky, New York and Hawaii close. Pew looked at the loss of state revenue, size of budget gaps, unemployment and foreclosure rates, poor money management practices, and state laws governing the passage of budgets.
The report warns that how these states tackle their financial woes will likely have a large impact on the rest of the country’s economic health because taxes may be raised, additional jobs lost and services cut. The ten struggling states make up one-third of the nation’s economic output, CNNMoney.com said.
Though only a portion of a state’s spending, energy-related costs could serve as an opportunity for freeing up money, creating jobs and growing businesses, according to several analyses, particularly where in the U.S. buildings represent 70 percent of all energy use. The ACEEE 2009 State Energy Efficiency Scorecard report quoted Delaware Governor Jack Markell as saying, "Investments in greater energy efficiency put people to work now and pay dividends for the future. Every dollar wasted from inefficient energy usage is a dollar that is not put to work getting our economy moving in the right direction.”
Arthur Rosenfeld, Commissioner of the California Energy Commission since 2000 and founder of the Center for Building Science at Lawrence Berkeley National Laboratory, has said that energy efficiency can play a vital role in reducing fiscal deficits. In a March 2009 interview with the Times of India he explained that a $1 billion per year program saves the state and its residents $2 billion per year, yielding $1 billion to be put to use in the economy. In the spring, U.S. Energy Secretary Steven Chu cited Rosenfeld’s research into white roofs, which showed that painting the roof surfaces of the world’s largest cities could have an enormous impact on reducing heat absorption and related cooling costs. Rosenfeld was instrumental in establishing policy in California in 2005 to require all flat roofs on commercial buildings to be white.
ACEEE Executive Director Steven Nadel said, “The states continue to be leaders in advancing energy efficiency policies and programs. In fact, this growing and deepening commitment to energy efficiency is so strong that the current recession has not put a dent in the vast majority of state programs. And that is for good reason: Energy efficiency is the only resource that can actually reduce energy consumption while growing the economy – making efficiency the ‘first fuel’ states can use to balance their energy portfolios.”
Also this year, Greenpeace UK made the case for investment in energy efficiency to boost economic recovery in the short- and long-term, specifically in creating jobs and reducing problems related to fuel poverty. The Greenpeace report includes case studies of energy efficiency and employment from around the world and specifically notes that Germany gained from the creation of 140,000 jobs as a result of a retrofit program and California was able to generate 1.5 million new jobs through several policies.
Green Building Adds $500 Billion To GDP
Another new report from the U.S. Green Buildings Council (USGBC) and Booz Allen Hamilton forecasts the green building sector to more than triple its contribution to the U.S. gross domestic product. According to the report, the green building industry provided $178 billion in the eight-year period from 2000 to 2008 and will add an additional $554 billion to the GDP in the next four years, plus nearly $400 billion in wages.
Furthermore, the green building market will generate almost eight million jobs in the next four years, the report says. The retrofitting market to increase energy efficiency in existing buildings is also growing, according to a new report conducted by McGraw Hill Construction, a leading provider of project and product information to industry news, trends and forecasts. The report predicts the retrofit market to be a $10-15 billion market by 2014.
As an added benefit to both the green buildings and job market in general, employees working in green buildings are more productive than those working in non-green buildings, say researchers at the University of San Diego's Burnham-Moores Center for Real Estate and CB Richard Ellis.
Environmental Leader recently featured a discussion by Simon Parsons, a business consultant for IBM Global Business Services, as to how sustainable property management reduces costs associated with energy. Costs can be reduced with lighting upgrades, installing motion sensors, additional insulation or implementing renewable energy such as solar or wind to power a building’s operation.
Cost saving opportunities abound in improving lighting, heating and cooling and plug load. The U.S. EPA’s ENERGY STAR Building Upgrade Manual recommends upgrading buildings in steps, beginning with lighting and supplemental loads. Following lighting and equipment and appliance power changes, assessments should continue with the building envelope, then controls, then heat exchange equipment, and finally heating and cooling systems. According to ENERGY STAR, lighting and other appliances generate a significant amount of heat. The downstream savings of lighting efficiency measures can therefore include cost savings in facility HVAC operation and energy use.
Small and large businesses and universities are taking advantage of the savings and return on investment building retrofits have to offer. For example, large companies such as Dole, Walmart, Holiday Inn, New York Times, Arby’s, and SunGard have reduced costs by installing energy efficient lighting in their buildings. A family-owned Pennsylvania pet store expects to save $200,000 in electricity costs as a result of a lighting upgrade. One private company, LED Saving Solutions is in the business of making energy efficiency possible and has forged production and financial partnerships that allow it to take on the initial cost of replacing conventional lighting, making the retrofit cash-flow positive for properties from the start.
This summer Living Cities, a philanthropic organization comprised of 21 of the world’s largest foundations and financial institutions, held a summit at Harvard University’s Kennedy School of Government where top officials from 17 U.S. cities received training from experts on retrofitting cities’ buildings to be more energy efficient and how to create green jobs.
The states with the best ACEEE energy efficiency scorecards are California, Connecticut, Massachusetts, New York, Vermont, Washington, Oregon, Rhode Island, Minnesota and Maine. States needing the most improvement in energy efficiency involvement are Arkansas, Missouri, Louisiana, Georgia, Alaska, West Virginia, Nebraska, Alabama, Mississippi, North Dakota and Wyoming. Three of those, California, Oregon and Rhode Island, however, are among Pew’s struggling states. The Pew report identifies the varying issues faced by each state on its list.
ACEEE just released a report based on using energy efficiency as a basis for economic development for South Carolina. The study concludes that implementation of energy and water efficiency policies could cut electricity and water bills for South Carolina residents by $5.1 billion and could create almost 22,000 new green jobs by 2025.
