The use of taxpayer money to incentivize investment by the private sector is rarely a sure thing, but a proposal recently introduced in Congress has the potential to provide just such a spark to a growing U.S. industry while substantially improving our environment. This plan has solid results behind it based on test cases in Connecticut and several other states.
Get Instant Access to This Article
Subscribe to Hartford Business Journal and get immediate access to all of our subscriber-only content and much more.
- Critical Hartford and Connecticut business news updated daily.
- Immediate access to all subscriber-only content on our website.
- Bi-weekly print or digital editions of our award-winning publication.
- Special bonus issues like the Hartford Book of Lists.
- Exclusive ticket prize draws for our in-person events.
Click here to purchase a paywall bypass link for this article.
The use of taxpayer money to incentivize investment by the private sector is rarely a sure thing, but a proposal recently introduced in Congress has the potential to provide just such a spark to a growing U.S. industry while substantially improving our environment. This plan has solid results behind it based on test cases in Connecticut and several other states.
The proposal would set aside $50 billion to establish a national Green Bank. The money would be used to leverage private investment in green energy and energy-efficiency projects. From a fiscal perspective, the evidence produced by state green bank programs suggests this segment of the economy reacts favorably when government funds are used to boost new projects at the start.
In Connecticut, our five-year-old Green Bank has leveraged $148 million of rate-payer dollars to stimulate $755 million in private investment in clean-energy and energy-efficiency projects completed by businesses and residential homeowners. We estimate this spending has helped create up to 3,000 jobs in that same period of time. Other local green banks in New York, Maryland, California, New Jersey and Rhode Island are achieving positive results.
The green bank model is a clear case of the states serving as laboratories for good public policy that can be adopted on a larger scale by the federal government to fund a nationwide movement. Energy independence has been a goal of our federal government for nearly 50 years and recent growing concerns about climate change make green energy a similar national priority.
It has been estimated that our planet will need to spend as much as $90 trillion over the next 15 years to stave off the worst anticipated effects of climate change. That represents about $800 per person, per year for 15 years. Through the work of the Connecticut Green Bank, state residents have achieved the equivalent of $100 per year in spending toward climate change mitigation, as compared with the $10 per person state residents were contributing five years ago when the program began.
The economics behind certain forms of clean energy are still cost prohibitive for many businesses and homeowners. The use of public dollars to provide for innovative financing models can make these projects economically viable for larger numbers of people with great cost efficiency. Through one financing program, Connecticut has achieved $9 of private investment for every $1 invested by government.
With limited public funds available to pay for priorities like education, health care, transportation and defense, taxpayers demand that we use government resources wisely. The green bank model does just that and there is every reason to believe, based on our experience in Connecticut, that a federal expansion of these programs would have positive effects nationwide in terms of environmental protection and the creation of a new industry in which the United States could take a leading role.
It is an economic and environmental priority for the next administration and the new Congress to take advantage of this moment in history to create a national green bank.
Bryan Garcia is president and CEO of the Connecticut Green Bank.
