One of my loyal readers was kind enough to bring to my attention a troubling article from the Washington Post in which a man who had earned 9 green certifications and sent out hundreds of resumes still has yet to receive a single job offer.

In September, I spoke at a Woodrow Wilson Foundation event on green jobs for women.  Most of the presenters were from non-profit organizations which trained women for green construction jobs.  They all reported that their graduates were having trouble finding work.

The subject of the Washington Post article had been laid off from his job as a surveyor:

Anton has been out of work since 2008, when his job as a surveyor vanished with Florida’s once-sizzling housing market.

He then retrained to do solar installation, green demolition, etc. and still could not find a job. 

The Washington Post article waves a wagging finger at the green stimulus spending and the promise of green jobs:

The Obama administration channeled more than $90 billion from the $814 billion economic stimulus bill into clean energy technology, confident that the investment would grow into the economy’s next big thing.

The underlying assumptions of the Washington Post article, and many others like it, are inherently flawed.  You cannot wring blood from a stone. The recovery is happening slowly.  Lending is still very tight, meaning that it is difficult to get building projects–green or otherwise–financed. In other words, it’s the economy, stupid.

The problem for Mr. Anton is not that he retrained green.  Indeed, his odds of finding a job actually went up through his retraining.  According to the Pew Charitable trust:

[B]etween 1998 and 2007, clean energy economy jobs—a mix of white- and blue-collar positions, from scientists and engineers to electricians, machinists and teachers—grew by 9.1 percent, while total jobs grew by only 3.7 percent. And although we expect job growth in the clean energy economy to have declined in 2008, experts predict the drop in this sector will be less severe than the drop in U.S. jobs overall.

Mr. Anton, and millions of others like him, are out of work not because the promise of a green economy failed, but because the economy failed.

Articles like the Washington Post piece also claim that the promise of the green economy as a job engine has been over-hyped.  This is not because the idea that green technology and renewable energy is not a potential new source of job growth–just look at China.  Even our own stimulus plan demonstrates that green stimulus projects create the most jobs per dollar of any of the stimulus initiatives. 

Rather, since Obama came into office and pushed a "green" stimulus plan, the public policy initiatives that underpin a successful green economy (not to mention a healthier environment)–like control of carbon through cap or tax, a national renewable energy portfolio, etc.–have been jettisoned.  With no new real economic engine or dynamism, the overall economy is recovering slowly. Yet, despite these obstacles, green job creation is still outpacing other sectors. 

So, perhaps the Washington Post article should have asked a different question: If green is not the next big thing, what did the other $724 billion buy you? 

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I have been tracking the green stimulus spending since June 2009. In November 2009, actual dollars spent on green projects was $1.5 billion.  Now, in November 2010, dollars actually paid to date on green projects is approximately $11 billion.  It amounts to approximately 7% of contract spending from the Stimulus bill (which does not include tax benefits), and 2.6% of the total stimulus money paid to date. 

By agency, the spending on green breaks out as follows:

I used the same methodology as described in detail here. If you are a data geek like me, you can do your own number crunching at Recovery.gov and the agency recovery sites who do weekly reporting in Excel on the allocation and spending of the Stimulus money.  There is a wealth of information available, and I welcome any input or different statistical or mathematical analyses from the Green Building Law Community. 

At the initiation of the Stimulus, Obama touted the green components of the stimulus bill.  He has also been very positive on the prospect of green jobs. Opponents of the stimulus bill, and waning support of green initiatives and green jobs in general, has been on the rise.

So the question becomes: what is the value of the 3% of the Stimulus that went to green initiatives, and was the return on investment higher or lower than the other initiatives that were funded by the stimulus.  The answer is yes.  Agencies tasked with green funding (DOE, EPA, GSA) hold 3 of the top 10 most efficient job creating agencies that were allocated stimulus funding:

  By contrast, the two departments which spent the most money, the Department of the Treasury (tax cuts) and the Social Security Administration only created 188 direct jobs.

It will be argued that the tax cuts, etc. indirectly created jobs by pumping more money into the economy.  But there is a direct way to measure the impact of a single green dollar.  To address this, I looked at the statistics for the GSA.  Unlike other agencies which allocate money through states to programs or disperse it to individual taxpayers, the GSA contracts directly with builders and other direct contract fund recipients to build or renovate federal buildings.

As of September 30, 2010, the GSA had saved or created 5773.82 jobs (how you have .82 of a job I can’t say). The stat is here. The GSA was 16th in the agencies recieving funding, and the12th net job creating agency.  But on a job per dollar basis, the GSA the 6th most efficient job creating agency at $258,613.16 per job created.   

Do not fall into this statistical trap "$258k per job? We could have created five $50k jobs for that money!"  Remember, this dollars per job includes materials and costs of the jobs involved (bricks, mortar, etc.), which also have downstream job creating effects (brick makers, concrete haulers, etc.).

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I recently attended the West Coast Green conference in San Francisco and came out enthused and confused.

I was enthused about the progress the green building industry is making. That over 14,000 people from all over the country came to learn about the new innovations in green building is huge for an industry, which in many ways, is in its infancy.

I listened to speakers from all sides of the business, real estate experts, government officials, green building consultants, and contractors to list only a few. They all provided interesting insights on where the industry was and should be going and a bit about it how it was going to get there.

There were also more numbers thrown around than a mathematician could handle. The amount of the money that was being directed to the industry from the stimulus bill, CO2 reduction goals, energy efficiency performance goals, and more and more goals.

One thing I didn’t hear enough of was specific ways to connect money to goals. People were so excited to learn that the government was finally sending money their way they forgot to ask how it would actually be implemented and with what oversight.

After the opening remarks I decided to spend the next three days focusing on one thing, how to get actual changes implemented. I decided to break down this task into two areas. First, I would focus on how conferences like this could teach and encourage people to start changing the built environment to stop negatively effecting the natural environment. Secondly, I wanted to know how to get money to these newly educated people to carry out the ideas they learned.

Interview with an Environmental Consultant

To figure out how conferences like West Coast Green affect change I decided to talk to a presenter who led a session at the conference. Matt Macko is a principal at the San Francisco based green building consulting firm Environmental Building Strategies. He led a session titled Deep Retrofits of Commercial Buildings along with Jose Guevara, Property Manager at Cushman & Wakefield of California, Inc.

CleanTechies: What was your talk focused on?

Matt: I discussed the potential to flip the current green building conversation from its current state, littered with defensive reactionary discussions mostly focused only on conservation, to one where we work on the offensive to create demand in the marketplace around sustainable decision making. I targeted some economic and financial evaluations that a handful of firms are providing their clients as highlights of the quality work being done in the sustainability industry.

CleanTechies: What were the three most important things you think people got out of your talk?

Matt: People walked away with an understanding that demand must be created to tip the marketplace in order to meet our GHG goals. They also left with a better understanding of the financial value that can be derived through intelligent sustainable decision making. Lastly, they should have walked away understanding that investing in energy efficiency is as at least as lucrative if not more profitable than investing in Google.

CleanTechies: How do you think people will use the information you gave them to improve the green building industry?

Matt: I hope to generate more intelligent conversations around how we value “green.” If I had one main objective to relay it would be that we have the tools to prove the value of sustainability but we are just not doing a good enough job to date. I hope from there people will find ways to carry the message along and encourage others to join the movement.

CleanTechies: What is the focus of your firm’s work and how are you trying to change the conversation?

Matt: My firm focuses on making the business case for sustainability. We are a consultancy that uses tools such as discounted cash flow and energy models to prove the value of energy efficient decisions to our clients. Many of our clients come to us looking for efficiency through the LEED process. Our development of the LEED EDGE tool has helped several firms realize significant efficiency gains through making the LEED Certification process easy and virtually paperless.

Why I was confused?

Throughout the three days, and from almost every person I talked to, people had an encouraging outlook on the future of green building. They cited the mass amounts of money headed its way and they mentioned the new standards mandated by the government as proof that green building is here to stay.

One of the most exciting talks I heard was Panama Bartholomy’s talk on “Greening Existing Buildings: The Biggest Piece of the Low Carbon Puzzle.”

In it he mentioned the importance of the existing building retrofit market on reaching all of the carbon emissions goals being sent down from the politicos in Washington and Sacramento. He also outlined where some of the stimulus money was headed, but very little about how exactly it was going to be used or who was in charge of oversight.

I wouldn’t call it lack of foresight but clearly the infrastructure is not ready for all the money flowing in, though there are signs of life. Panama mentioned one specific financing optioned that would encourage homeowners to improve their home’s energy performance. PACE districts allow homeowners to implement energy efficient measures with no upfront cost to them. They pay for the measures with increased property taxes, which should be more than offset by the resulting energy savings.

Some recent success.

Joe Biden recently announced his contribution to the movement. He asked the Council Of Environmental Quality, earlier this year, to come up with a study on how the government could guide the development of a home energy efficiency retrofit market. They produced the “Recovery Through Retrofit” report. It offered several recommendations: more access to information for homeowners, more transparent and accessible financing, and a plan for worker training.

All these things are necessary and important but this report fails in going far enough in its scope. It doesn’t hash out any programs or concrete plans on how to bring all of its recommendations to fruition.

The “Retrofit Ramp-Up”, a program recently drawn up to fund retrofit programs, has started receiving applications for qualified projects to receive funding but this program also has its flaws. It helps facilitate funding but only for those who go looking for it and have the knowledge and expertise to get it.

Compare this approach to the one the government has taken with auto industry. The government does not offer funding to improve average MPG of automakers’ fleets to meet more stringent standards; instead they mandate the new standards. Why couldn’t the government take more of a hard-line approach, similar to this example, with the existing home and building retrofit market? I like the idea of money going to the right people but couple that with some mandated standards that have teeth, then everyone will be forced to see what they sometimes are too stubborn to realize, that green building can save them money.

My solution.

California already has a leg up on most states and could act as an example for the nation to follow. State government officials could begin by using the power of AB 1103 to get  ENERGY STAR scores for all commercial buildings in the State.

The “Recovery Through Retrofit” report also called for an ENERGY STAR program for homes to be created, which could provide later structure to update this solution.

After compiling all of the ENERGY STAR scores, the government could mandate and directly fund the retrofit of the worst buildings, possibly the lowest 10% of ENERGY STAR scores. These buildings would then go through an energy audit where the best energy conservation measures could be identified.

Payback could be formulated in either of two ways. Either the government could get paid back with the energy savings resulting from the increased efficiency or they could increase property taxes and have the building owner get the energy savings, similar to PACE districts. In both cases retrofits would be mandated, but the key is that these changes would not cost a dime in the end.

Energy savings in these wasteful buildings would be very high and would easily pay for the retrofits within a couple of years. The government could then use the projects as an example of the potential of the industry, further enticing interest and generating new projects. These projects would also create numerous jobs. Connected to the program would have to be a mandated education curriculum to get contractors up to speed on how to implement the upgrades. This education would further improve the future of the retrofit industry by increasing the stock of qualified workers.

[photos: Environmental Building Strategies, ENERGY STAR, E>mar]

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Jennifer Kho this week asks what I can only assume is a rhetorical question on Green Inc. Blog at NYT, “Is Washington the New Wall Street for Cleantech?”

There was almost $30 billion in the stimulus bill that could be described as allocated toward cleantech. Lobbyists are flocking to the Hill on Waxman-Markey, and they don’t work for free.

There is ample evidence that angels and VCs are now second fiddle to the American taxpayer when it comes to cleantech capital for the next generation of innovation and investment.

To me, a more debatable and salient question is: Given that VCs and angels are looking for ROI – usually explosive ROI from the “killer app” – they have a certain set of criteria that they use to evaluate who and what gets funded; the government on the other hand has no such interest. Their interest is not in seeing a technology achieve commercial success, it is in policy advancement, political gain, maybe even – gasp! – some patronage.

Does that shift in the key investors’ priorities mean that we will see money spread around on a bunch of pie-in-the-sky projects or hopeless technologies instead of being thrown behind the most competitive, and innovative ideas?

In my mind there is no debate. We may get to the same or similar endgames no matter who is funding the technology development, but with the government doing it, it will cost A LOT more to get us there in the aggregate.

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There are all kinds of tax credits and other green incentives in the new economic stimulus bill.

But nonprofits are being left out of the mix. Such organizations are usually ineligible for federal tax incentives for renewable energy projects, according to folks from the National Development Council.

The council, one of the oldest national nonprofit community and economic development organizations in the U.S., aims to change that. The group has secured $1.5 million for a solar installation project at the Gasser Foundation’s base in Napa Valley, Calif.

“For too long, forward thinking nonprofits have been ineligible for the same tax incentives as private industry,” says Robert Davenport, NDC president. “We hope to apply this model for other nonprofit projects across the country looking to modernize, cut long-term costs, and install a green operating system.”

The NDC’s model uses a financing structure that takes advantage of the renewable energy tax credit. The $1.5 million for the Gasser project is made up of tax credit equity, two loans and a state cash rebate from the California Energy Commission.

The Gasser project includes rooftop solar panels installed by Borrego Solar that are expected to supply almost all of the building’s power, cutting out about 26 tons of carbon dioxide emissions a year.

The NDC describes the Gasser project, the first of its kind in the nation, as groundbreaking and pioneering.

Read more at the North Bay Business Journal.

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