Revive The Economy. Save The Planet. Get Efficient.

Greg Galitzine : Green Blog
Greg Galitzine
| Helping environmentally-conscientious business leaders choose environmentally-friendly solutions.

Revive The Economy. Save The Planet. Get Efficient.

Nearly every firm, agency and especially nonprofits subscribes if not reads to the notion of doing more with less as the key to productivity, profits or achieving other desired results.

So why not take this sensible, proven concept to energy? And in the process slice the U.S. deficit, chop healthcare and other high costs, kickstart the economy and breathe and live easier?

That's the argument made by David Goldstein, who is co-director of the Natural Resources Defense Council (NRDC's) energy program and a MacArthur Genius Award grant winner in 2002 for his work on energy efficiency, in his new book, Invisible Energy: Strategies to Rescue the Economy and Save the Planet in which he challenges the assumption that we are powerless to our addiction to oil and other dirty fuels.

Goldstein's book, says the NRDC argues that by using energy more efficiently, "we can cut our energy demand, improve quality of life, cut global warming pollution, and reduce pressure to drill for oil in sensitive ecosystems like the Gulf.  And in the process, we will be taking one of the few steps available to stimulate the economy while cutting the federal deficit."
"Goldstein emphasizes that we don't need the oil in the Gulf (or in other sensitive areas). He says the United States could do everything we are doing today - and in the foreseeable future - using currently available technologies to save more than $10 trillion over the next 40 years, reducing our demand for energy to perhaps 30 percent of what it is today."

"He also cites the failure to pursue strong energy efficiency policies since the 1970s as a primary cause for our global today's economic troubles, which can be remedied with energy efficiency policies that would pay off long-term dividends."
In a recent blog Goldstein writes: "Energy efficiency is one of the strongest tools we have at our disposal to recover from the recession. It can address all of the major problems that led to the Great Recession and that continue to hold back recovery: from the fear of inflation that [Paul] Krugman warns about to the trade deficit, high unemployment, and government deficits. Yet the policies that could work are not seen by policymakers to be of sufficient importance to implement with the needed urgency, and the economy continues to drift."

One of the underlying causes of the downturn that Goldstein correctly identifies is sprawl in that the transportation and energy costs of this development form has not been assessed in the total costs of house prices. If it were then consumers and lenders would have made more sensible and financially sound decisions. Alas in the talk about mortgage changes these factors have been left out.

He points out: "For mortgage lending, we have made almost no progress on incorporating energy and transportation costs into underwriting. When lenders evaluate or not whether borrowers can reliably make payments on a median mortgage of about $150,000 (or 80% of a median house price of about $180,000) they continue to ignore the 30-year commitment to pay some $300,000 in transportation expenses for a house located in suburban sprawl, and another $75,000 in utility costs."

"While these cost obligations are not contractual commitments, they are in practice real issues that affect whether or not the borrower can make their payments. Think about it. If you are in financial distress in Chicago in the winter, and you can't pay both your mortgage and your heating bill, which will you pay first? If you live in sprawl and need your car to drive to work, or look for a job, which bill will you pay first, your auto loan and gas or your mortgage?"

Goldstein if anything is understating the case, for supporting urban sprawl: commercial and residential is one reason why local and state taxes are so high that also adds to homeowners' financial distress, and why cash-strapped governments are cutting back essential services. It costs far more to provide and maintain roads, sewer/water, emergency response, transit, schools (including pupil and employee transportation) to low-density sprawling developments than it does to compact, efficient or smart walkable neighborhoods.

Why do local and state governments, knowing this, still encourage sprawl? Just check out who contributes to election more reason there should be limits on them (full disclosure: I am on the executive of a Canadian political party and have been a candidate in a local government election in which I did not take any money from developers)

This blogger has argued that to get moving greener--in more ways than one--we need to end all subsidies to energy and environmental waste. That also includes slicing mortgage subsidies. If you can afford a dream house, including the full costs, that's great. If you can't, well you can't. There's nothing wrong with settling for a smaller place or for renting.

Home ownership is such a shibboleth that it has blinded society to the hard costs it incurs. Yes it is nice to own your own home--you can within limits do what you want with it--something that provided your kids want it you can pass on to them. As investment it is hoary at best. Owning one limits flexibility in case circumstances change i.e. careers, life events e.g. marriage, kids, divorce, deaths. I've owned homes and I've rented and there are pros and cons to both. The bottom line is why should all of us have to subsidize the choice of living in sprawl?

The hard fact is though that for now there are millions of Americans (and many Canadian) that are stuck in homes, just trying to make ends met, and couldn't move out if they wanted to because what they would get in return would put them underwater.

Here's where teleworking can help: for we have also subsidized office-based employment and the energy it wastes both in buildings and in commuting at taxpayers' and the economy's expense, resulting as this blog has pointed out in huge healthcare costs.

Shifting the work to the worker saves them $4,000 to $5,000 in work-related employment costs than they can use to pay bills. They can also write off some of their house costs namely utilities for their workspaces. And they can sell one of their cars and rent out the garage to generate more cash. Doing so in turn also generates some $20,000 per employee/per year in net benefits to employers in the way of facilities costs and productivity gains. Meanwhile taxes can be lowered through less commuting resulting in minimizing road wear-and-tear, transit costs, and in emergency services.

And we get to breathe easier.

Something to think about as you relax at home, or return home from your 4th of July or extended (for those who are playing hookey) Canada Day holidays.

P.S. Be part of the solution. Walk, bike, take mass transit and carpool with others when you travel this holiday





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