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A W4 Solution: Insulate US from economic and climate devastation

January 14th, 2009 · 10 Comments

President Obama and Congress must act to stimulate the US economy with a package of win-win-win-win (W4) elements that will:

  • Create and protect jobs throughout the nation
  • Foster economic activity that will help, through tax revenue, pay for the stimulus
  • Strengthen the nation’s economic prospects for the long-term, and
  • Help address other critical challenges: notably energy security and climate change.

Good news: such W4 options exist in abundance.

Not so good news: While they are there in some degree, W4 elements are not dominating the discussions nor the draft economic stimulus package’s financial structure.

This is the first in a series of posts highlighting W4 options that should be part of the discussion and, even better, the economic stimulus package’s financing.

Insulate the US from Economic and Climate Devastation

As discussed here, Architecture 2030 developed The 2030 Challenge Stimulus Plan to create roughly nine million (yes, 9,000,000) jobs and several trillion dollars of building activity through a two-year, $192.47 billion program focused on using financial instruments to spark investment in energy efficiency in private buildings throughout the nation.


The financial instrument to stimulate action

The vast majority of the money would be spent on a housing mortgage interest rate buy-down and commercial building accelerated depreciation based on meeting energy efficiency targets. Very simply, the more efficient construction, renovation, or rehabilitation can make a building, the lower the mortgage cost for the homeowner and the depreciation for the building owner. As for a home, hit a target of carbon neutrality and the program would buy-down the mortgage/mortgage refinancing (with funding of the project) to just two percent. Would a two-percent (fixed, 30-year) mortgage interest you in making your home carbon neutral? A three-percent loan to make it far more energy efficient? FYI — the cost savings from the energy savings would likely pay for the costs, even without considering the lowered cost for the entire mortgage (and not just the energy efficiency upgrade costs).

In addition, while the money would spark about $1 trillion in private building energy efficiency investments, there is likely to be a much broader stimulus. How many homeowners would package the deal with needed major repairs (new roof, painting the house) or renovation (new kitchen)?

Not just mortgage financing

The plan includes elements beyond these fiscal incentives. For example, $2 billion in additional funding for training local officials and energy auditors, educational outreach programs, permitting assistance, and incentives for locally built products.

Some idea of the benefits

This truly looks to be a W4 option meriting attention:

  • Job creation: nine million new jobs (mainly in sectors hit hard in the recession, such as residential (down 37% in 2008) and commercial building construction (down 17%))
  • Tax implications: In addition to that minor little item of nine million new jobs, the program might just ‘pay for itself’ due to the tax base of increased economic activity.
  • Long-term impacts: The financial savings are quite strong, about $132-208 billion in energy and mortgage payment savings for consumers: in the first five years. Of course, these are savings that continue indefinitely into the future. And, this activity would spark the American building industry down a path toward far more efficient building and could spark American industry to develop energy efficient systems that could capture a global market space. Both the direct improvement in the efficiency of American use of energy and creatinga a market pull for 21st century options will improve American competitiveness for decades to come.
  • Improved Energy and Climate Security: The plan’s impact would cut US green-house gas emissions by 500+ million metric tons (about ten percent of one year’s US emissions) through five years. Energy consumption would fall by 6.5 Quadrillion Btu (US annual use is about 100 Quads), with a savings of about 2 trillion cubic feet of natural gas and 90 million barrels of oil (4.5 days of US oil use).

My reaction at first glance a month ago: Wow!

And, as Architecture 2030 has strengthened and developed the concept my enthusiasm has simply grown. Thus, WOW!!!!

In Architecture 2030’s words

This type of stimulus investment benefits all Americans, no matter what income level or location in the country because, due to the vast number of products and services involved, the investment would be spread across the entire U.S. and across all industries. It provides an economically efficient and powerful way to simultaneously address the three major crises facing the America today: the economy, energy independence and climate change.

This sort of systems thinking and systems-of-systems’ solutions should be centerpieced in the stimulus package.

NOTE: Again, there are other W4 options to be discussed.

ACTION ITEM: This plan merits discussion at the highest levels of government. It is worth contacting your Congressman about and Stimulate the Economy through Energy Efficient Buildings is in the “Citizen’s Briefing Book” at Change.GOV. If interested, go there and vote it up/make comments for attention within the Obama Transition Team.

Tags: Energize America · Energy · Global Warming · analysis · architecture · architecture2030 · emissions · energy efficiency · energy smart · environmental · financial policy · government energy policy · green

10 responses so far ↓

  • 1 Making some energy efficient sausage … // Jan 22, 2009 at 11:40 am

    [...] this does not achieve the multiple wins and extent of reach and impact of the Architecture 2030’s $197 billion plan to create 9 [...]

  • 2 “Architecture 2030″ Plan to Revive Economy // Jun 17, 2009 at 5:12 am

    [...] buildings through a mortgage subsidy program. Quite simply, this is perhaps the most valuable W5 strategy (win economically (stimulus, competitiveness, etc), win on energy, win on jobs, win on social [...]

  • 3 Merkley-Lugar Introduce Energy Smart Legislation // Aug 4, 2009 at 1:31 pm

    [...] form, this falls short of the massive benefits that would come from adoping the Architecture 2030 W4 plan to insulate America from economic devastation. Share and [...]

  • 4 Stop the Presses: Bipartisan sanity on Green Jobs and Helping American Homeowners // Sep 15, 2009 at 12:20 pm

    [...] if given the facts and straight information, the vast majority of Americans would support.  (And, energy efficiency investments in the built infrastructure are a huge win-win-win-win space.) Sadly, too many elected Republicans seem more concerned about Rush Limbaugh, Sean Hannity, and [...]

  • 5 WIN to the Sixth Power // Nov 16, 2009 at 2:40 pm

    [...] Financing Net Zero (& Lower Energy Demand) Building: As discussed here, Architecture 2030 developed The 2030 Challenge Stimulus Plan to create roughly nine million (yes, 9,000,000) jobs and several trillion dollars of building activity through a two-year, $192.47 billion program focused on using financial instruments to spark investment in energy efficiency in private buildings throughout the nation.  Buildings account for roughly 40 percent of America’s greenhouse gas (GHG) emissions. This program would put a serious dent into that figure while skyrocketing the United States in a global leadership position in building energy efficiency. [...]

  • 6 Clean Energy: The Jobs Program America Needs … NOW! And, tomorrow! // Nov 17, 2009 at 1:49 pm

    [...] example, financing Net Zero (& Lower Energy Demand) Building (see here) could be done on the basis of the Architecture 2030 developed The 2030 Challenge [...]

  • 7 Energy Efficiency, Net Zero, Plug-Ins & More Win-Win Opportunities | CleanTechies Blog - CleanTechies.com // Dec 7, 2009 at 9:56 pm

    [...] Financing Net Zero (& Lower Energy Demand) Building : As discussed here, Architecture 2030 developed The 2030 Challenge Stimulus Plan that would create roughly nine million (yes, 9,000,000) jobs and several trillion dollars of building activity through a two-year, $192.47 billion program focused on using financial instruments to spark investment in energy efficiency in private buildings throughout the nation. Buildings account for roughly 40 percent of America’s greenhouse gas (GHG) emissions. This program would put a serious dent into that figure while skyrocketing the United States in a global leadership position in building energy efficiency. [...]

  • 8 Clean Energy Jobs Go Home: $30 Billion to put 4.5 Million to Work // Dec 8, 2009 at 2:40 pm

    [...] A W4 Solution: Insulate US from economic and climate devastation [...]

  • 9 $100 billion/year: tax cuts for 1% or solutions for all? // Nov 19, 2010 at 6:53 am

    [...] And, by the way, these paths easily could have created far (FAR) more jobs than 3 million. Here, for example, is a path to create 4.5 million jobs with $30 billion. Or, there is the Architecture 2030’s concept for leveraging $100 billion per year to create 8-10 million jobs v…. [...]

  • 10 Energy Efficiency, Net Zero, Plug-Ins & More Win-Win Opportunities - CleanTechies // Mar 16, 2014 at 6:35 pm

    [...] Financing Net Zero (& Lower Energy Demand) Building : As discussed here, Architecture 2030 developed The 2030 Challenge Stimulus Plan that would create roughly nine million (yes, 9,000,000) jobs and several trillion dollars of building activity through a two-year, $192.47 billion program focused on using financial instruments to spark investment in energy efficiency in private buildings throughout the nation. Buildings account for roughly 40 percent of America’s greenhouse gas (GHG) emissions. This program would put a serious dent into that figure while skyrocketing the United States in a global leadership position in building energy efficiency. [...]

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