President-Elect Obama’s inauguration is only 13 days away, and it’s clear that economic stimulus will be at the very top of his agenda. We’re keeping our collective fingers crossed that Congress doesn’t get in the way, for urgent action was needed months ago. While details are still few and far between, it’s becoming clear that the package will be split between direct stimulus (i.e., government spending) and tax relief, and that there will be a green thread throughout. Much of this money will be used to promote spending by funding infrastructure projects at the federal, state and local levels, everything from building new roads to insulating government buildings.
President-Elect Obama’s inauguration is only 13 days away, and it’s clear that economic stimulus will be at the very top of his agenda. We’re keeping our collective fingers crossed that Congress doesn’t get in the way, for urgent action was needed months ago. While details are still few and far between, it’s becoming clear that the package will be split between direct stimulus (i.e., government spending) and tax relief, and that there will be a green thread throughout. Much of this money will be used to promote spending by funding infrastructure projects at the federal, state and local levels, everything from building new roads to insulating government buildings.
It’s also clear that some of that money will trickle down to normal folks like you and me. Additional tax relief for individuals and families is in the works. We certainly could use the extra money in our pockets, but what’s truly exciting are the hints that the Obama Administration might use some of the stimulus funding to jump-start the green economy, provide mortgage relief in return for green upgrades, invest in residential green technologies, or perhaps all at the same time. Details are still scarce (at least as of late afternoon January 6th), but some of the more interesting proposals include the following:
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Mortgage relief tied to energy conservation. Architecture 2030 is a prominent nonprofit group focused on fighting climate change by changing the way buildings are designed and built. Their proposal at face value is pretty simple: reward homeowners for investing in and achieving significant energy savings by reducing their mortgage interest rates. If you have an existing home, you’d be rewarded for cutting your energy use by 30% vs the latest code with an interest rate of 4.5%; go all the way to carbon neutrality and your rate would drop to 2%. Architecture 2030 estimates that this program, combined with a similar incentive program for commercial buildings, could lead to as many as 8.5 million new jobs over a two-year period. Sounds pretty aggressive, but major media outlets such as Business Week suggest this plan could be gaining traction in Washington.
Home retrofits and smart metering. Lisa Margonelli, an Irvine Fellow at the New America Foundation, recently recommended a number of components that should be part of the stimulus package in an article published in The Nation. She recommends that the government fund a mass home weatherization program for families with incomes less than $75,000. An investment of $3,000 per home could cut energy use by 20%, the equivalent of an ongoing $400 stimulus check. Pretty steep? Maybe, but Ms. Margonelli points out it’s equivalent to the $3,150 tax credit initially offered to Prius buyers regardless of income bracket. And we know that most of the folks driving those early Priuses weren’t in the lower brackets!
Ms. Margonelli also proposes an extensive upgrade of the electrical grid. Of course the utilities are lobbying furiously for multi-billion subsidies of new transmission lines and power plants, but she proposes that the Administration also look at each individual house by installing “smart†electricity meters on individual homes. Pilot studies have shown that a $100 meter and the visibility into power usage it promotes can lead homeowners to cut electricity consumption by 10% - 40%. In addition to giving us better tools to cut our own energy usage (and save money), this would also create thousands of installation jobs.
More details about exactly what will / will not be proposed should come out any day now - we’ll keep you posted. (FYI, if you’re interested in seeing who’s speaking to the Obama team, check out this website and select “Energy and Environment†from the drop-down list. Definitely a major improvement over the Cheney years!)
In the mean time, though, the government’s already handing out money in 2009 for a variety of green upgrades via tax incentives in the LAST stimulus package. Upgrade your furnace or boiler and receive $150, or bring your old home’s insulation and sealing up to modern code and receive $500. Our friends at Green Building Elements have put together a reasonable list of the highlights.
