How Urban Industry Can Contribute Green Solutions for COVID-Related Health Disparities

The best nature-based solutions on urban industrial lands are those that are part of a corporate citizenship or conservation strategy like DTE’s or Phillips66. By integrating efforts such as tree plantings, restorations, or pollinator gardens into a larger strategy, companies begin to mainstream biodiversity into their operations. When they crosswalk the effort to other CSR goals like employee engagement, community relations, and/or workforce development, like the CommuniTree initiative, the projects become more resilient.

Air quality in urban residential communities near industrial facilities will not be improved by nature alone. But nature can contribute to the solution, and while doing so, bring benefits including recreation, education, and an increased sense of community pride. As one tool to combat disparate societal outcomes, nature is accessible, affordable and has few, if any, downsides.

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A Green Stimulus Plan for a Post-Coronavirus Economy

If we’re going to recover from the coronavirus pandemic, then let’s do it in a way that shakes up the status quo. This is the message that a group of U.S. economists, professors, and veterans of the last financial crisis sent in a letter to Congress yesterday asking for “green stimulus” legislation to jump-start the economy in a way that controls for climate change and poverty. 

They are asking for a $2 trillion commitment for programs that will create living-wage jobs, amped-up public health and housing sectors, and a pivot away from a fossil-fuels-based energy frame. Under their plan, the stimulus would automatically renew every year at 4 percent of GDP, or $850 billion annually, as well as give the public more of a voice in whether — and how — large-scale corporations would get bailouts. For now, the coalition recognizes that the focus should be on stopping the spread of coronavirus and mitigating all related health risks.

“However, we can do all the preparatory work now to make green projects are ‘shovel ready,’” the group said in its open letter published on Legislative action and planning work now “can ensure that physical projects can commence as soon as it is feasible to restart major in-person work across the economy.”

Congress is already deep in the throes of constructing a large economic recovery bill, to help workers losing income and businesses and governments losing revenue due to the novel coronavirus crisis. But the U.S. Senate is stuck in a debate between Republicans who want to dedicate a quarter of its $1.8 trillion stimulus plan to bailing out corporations, and Democrats who want to ensure strict transparency and oversight over how that $500 billion corporate bailout would be registered.

Congressional Democrats are also making their own demands, like making airlines that receive federal funding assistance agree to reduce carbon emissions by 50 percent, and making corporations pay a $15 minimum wage to its workers. The Green Stimulus asks Congress to push for even more to guarantee that workers are protected and businesses can operate sustainably to ward off climate change catastrophes, especially in a coronavirus-crippled economy. The authors of the proposal are focused more on the long-term recovery — similar to the 2009 American Recovery and Reinvestment Act stimulus passed by the Obama administration that followed the 2008 Emergency Economic Stabilization Act bailout of the Bush administration.  

In fact, many of the authors of the Green Stimulus letter either worked on the 2009 ARRA legislation or are now working on Green New Deal legislative proposals, and in some cases both. And yes, much of the Green Stimulus package mirrors the Green New Deal. The Green Stimulus architects are operating under guidelines set by a coalition of climate and environmental justice organizations called the “Five Principles for Just Covid-19 Relief and Stimulus:” prioritize public health; provide direct economic relief to families; relieve workers rather than corporate executives; protect elections and democratic processes; and, make a “down payment on a regenerative economy.” The last principle is what the Green Stimulus seeks to represent.

“As policymakers take steps to ensure immediate relief and long-term recovery, it is imperative that they consider the interrelated crises of wealth inequality, racism, and ecological decline, which were in place long before Covid-19, and now risk being intensified,” according to the principles.

CityLab spoke with J. Mijin Cha, an author of the Green Stimulus, senior fellow at Data for Progress, and assistant professor of urban and environmental policy at Occidental College. Much of her scholarship has been on the transition to a low-carbon economy, and how to fairly prepare fossil fuel workers and the unemployed for jobs in renewable energy. The interview has been edited for length and clarity.

Why is a focus on a just transition for workers — from fossil fuel industries to renewable energy industries — an important thing to talk about in the middle of a coronavirus pandemic?

There is an overlap between communities that are struggling with coronavirus that don’t have the resources to adequately fight it, and these rural regions that are fossil fuel communities. As we think about the stimulus, this is definitely an area of workers that should be covered. Because we can’t end fossil fuel extraction tomorrow. It will take us 10 years or so to be able to really plan for economic diversification and implement it so that these communities don’t go from having a tax base that is tied to coal mining to nothing. So, if we’re going to infuse, support and invest in projects that will put people to work, working towards transitioning fossil fuel communities away from extraction is something that we have to do now anyway.

From a health perspective, is there something about renewable energy jobs that make workers safer in times like this, meaning disease outbreaks, than jobs in the fossil fuel industry?

The health impacts from these extractive industries would make people more susceptible to something like the coronavirus, because they’re already not in good health. The second thing is, I’ve seen reports of, coal miners for instance, and oil and gas drillers, whose jobs are considered to be essential. They’re not able to stay at home. So, they’re still constantly being exposed to the virus. They are bearing the brunt of our extractive economy, and then in times like now when there’s a pandemic, they are still right at the forefront.

Part of the Green Stimulus asks for ramped-up resources and financing for electric vehicle manufacturing. Are there any caveats for that? For example, should Elon Musk expect a huge payout?

Absolutely not. And we’ve put in points about prioritizing companies and projects that already have project labor agreements — at the minimum, they have to pay prevailing wage. This is something that’s really important as we think about job creation. Creating a bunch of bad jobs will just perpetuate both inequality and the climate crisis. Now is a time when we think about not just what we invest in but who we invest in. Businesses and manufacturers that pay and treat their workers with dignity are the ones that we want to be lifting up and investing in.

There are also several provisions that focus on investing in women in the recovery. Why is that important?

You can see that in terms of the occupations that are being hit, like health care and education, a lot of these are workforces that are majority women. We can say that women will bear the brunt of the negative economic consequences of the coronavirus. This emphasis on women is a way to acknowledge that historically women have been left out of things like manufacturing and tech. We’re focusing specifically on low-income communities, communities of color, indigenous communities, and other frontline communities that have been historically excluded from both the extractive economy and the current neoliberal economy that we have now.

Many of the people working on the Green Stimulus proposal also worked on ARRA. What lessons are being taken into account?

First, ARRA was too small to address the magnitude of the crisis, which is why we’re calling for at least $2 trillion. I think ARRA showed how antiquated a lot of the programmatic infrastructure is. For instance, they tried to ramp up the weatherization program, but it could not handle that infusion of cash, just in terms of their basic infrastructure. That’s why a lot of our policies are really on the public sector, where we can stretch and advance a lot of these things, like renewable energy projects at utility scale, mass retrofitting of public housing. These are all things that we can do.

Another issue with ARRA is that it focused on training workers for green new jobs, but didn’t focus as much on the demand side. So for us, what are the policies that we’re implementing that will not only create jobs, but also create demand for jobs? Like when we think about public procurement, that’s a lever that we can use to really ramp up manufacturing on the demand side, and that creates jobs.

Critics are already arguing that ideas like the Green Stimulus or even the House Democrats’ recovery bill are just exploiting coronavirus to get Green New Deal policies passed. How do you respond to that?

I understand where people are coming from, but I think what we need to realize is that what we’re having now is a total corporate stimulus. Are they also saying that Republicans are using this opportunity to really ramp up the corporate sector? I know people will ask: How do we make this politically feasible? But I think the focus should be more on what is the right thing to do. One thing that has come out from the coronavirus pandemic is how unjust our country really is. Like all the people that don’t have access to paid sick days, that don’t have access to health care, and understanding how deep our inequality really runs. This is something that has come to the surface, and this is an opportunity for us to address that.

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Ride-Hailing Isn’t Really Green

Uber and Lyft have consumed a vast amount of attention since they arrived a decade ago. But in many ways, we’re just beginning to understand what ride-hailing is doing. A growing cache of research by academics and policymakers points to a host of negative impacts associated with the explosive popularity of on-demand rides, including increased traffic congestion, declines in public transit ridership and upticks in traffic fatalities.

A new report by the Union of Concerned Scientists evaluates another, less-examined ramification of the ride-hailing sector: its environmental toll. The study estimates that the average U.S. ride-hailing trip results in 69% more pollution than the transportation choices it displaces, based on federal vehicle efficiency statistics, data collected by state and local transportation regulators and previous survey-based academic research. The effects are likely even worse in downtown areas, where riders are more likely to choose on-demand rides in lieu of cleaner modes of mobility.

“Not every ride-hailing trip is displacing what would have been a car trip,” said Don Anair, the deputy director and research director of the UCS Clean Transportation Program and the lead author of the paper.

Anair and his colleagues first compare the pollution associated with the average, non-pooled ride-hailing trip to the pollution from the same trip in an average passenger vehicle, and finds that the on-demand rides generate 47% more carbon emissions. Although ride-hailing vehicles tend to be more gasoline-efficient than America’s fleet of individually owned cars — for-hire drivers often buy these cars for the express purpose of towing people around — Anair and his colleagues found that the fuel savings was not enough to make up for the many miles that ride-hail drivers log without anyone in the back seat (“deadheading,” in taxi-driver talk). As many as 40 percent of all miles driven by Uber and Lyft across six major U.S. cities were without passengers, according to a joint study released by the companies last summer, reported on first by CityLab.

Next, UCS researchers estimated how ride-hailing compare to the transportation options riders would have otherwise chosen. Assuming on-demand trips are pooled an average of 15 percent of the time, Uber and Lyft rides deadhead so much and so often displace lower-emitting options such as public transit, walking, and biking that they turn out to be 69 percent more polluting, the study estimates. The researchers uses data from California, where air-quality regulators have crunched numbers directly from ride-hailing companies.  

The findings run counter to the eco-friendly messaging that the companies have promoted over the years. Lyft pledged to go carbon-neutral in 2018 via an offset investment program, and both companies have touted their carpooling options and their value as “first and last mile” connections to transit. But shared-ride services are still far less popular than solo passenger rides—at least based on data from California and New York City regulators—and ride-hailing’s complementary relationship to transit has so far proven limited.

Campbell Matthews, a spokesperson for Lyft, called the new study “misleading,” because ride-hailing makes up only a small portion of overall emissions from the transportation sector. The report also does not account for the environmental benefits associated with people who have sold their cars or foregone new vehicle purchases because of ride-hailing’s availability, she said. “Lyft encourages the use of shared rides, was the first rideshare company to put public transit information into our app, and last year, made one of the largest single deployments of electric vehicles in the nation,” said Matthews. “We are eager to continue this work in partnership with cities, to advance shared, sustainable transportation.”

Xavier Van Chau, an Uber spokesperson, echoed that sentiment. “We want Uber to be a part of the solution to address climate change by working with cities to help create a low-carbon transportation future,” he said. “To unlock the opportunities we have to reduce emissions, we will continue to invest in products and advocate for policies that reduce car ownership, promote more pooled trips and support greater adoption of bikes, scooters, green vehicles and the use of public transit.”

The report also lists a number of ways that companies, rides, and regulators can ease the climate impacts of ride-hailing, including expanding the deployment of plug-in electric and hybrid vehicles, collecting trip fees in congested downtown areas and supporting carpooling and public transit. It notes that Uber and Lyft have boosted mobility in neighborhoods previously underserved by transit and for riders with disabilities.

“Policies that promote pooling, vehicle electrification and better connections to public transit can facilitate a reduced environmental impact from TNCs, while building on their mobility and accessibility benefits,” said Susan Shaheen, the co-director of the UC Berkeley Transportation Sustainability Research Center, which was not involved in the report.

Among the recommendations from UCS researchers: encouraging ride-hailing companies to share more data with government regulators. The industry’s reluctance to make trip data available has limited the ability of policymakers and academics to understand and rein in the impacts of the new mode, including pollution.

“It’s helpful both for consumers and policymakers to understand  what the climate emissions are and to understand what the solutions might be,” said Anair. “There are opportunities for ride-hailing to be part of a low-carbon transportation future, with some concerted effort among ride-railing companies, policymakers, and consumers alike.”

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CityLab Daily: Inside the Green New Deal for Public Housing

What We’re Following

Here’s the deal: On Thursday, New York Representative Alexandria Ocasio-Cortez and Vermont Senator Bernie Sanders introduced a bill that would dedicate billions of dollars to energy retrofits for America’s public housing. The Green New Deal for Public Housing Act would commit up to $180 billion over 10 years to upgrading 1.2 million federally owned homes.

That might sound like a lot of green, but it’s actually a two-in-one deal: The bill would address the federal government’s dilapidated buildings that already have very costly deferred maintenance backlogs, while also reducing those buildings’ energy consumption. Another easy-to-overlook feature: It would repeal a law that currently caps the number of public housing units at the level it was at in 1999. CityLab’s Kriston Capps has the story: Inside the Green New Deal for Public Housing Act

Andrew Small

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Facing declining birthrates and rural depopulation, hundreds of “marginal villages” could vanish in a few decades. But some small towns are fighting back.

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19th-Century London’s Extreme Wealth and Poverty, Mapped

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Everywhere a Sign

Toru Hanai/Reuters

Whether you like it or not, advertising signage has always been part of urban life. Fly-by shots of cities may present the “blank facades of skyscrapers,” but at the street level, “cities are a riot of lettering and symbols,” Darran Anderson writes. These images and symbols—the hanging signs of London, the neon lights of Las Vegas and Hong Kong, and even ads projected on the side of the Eiffel Tower—have aroused both curiosity and irritation. Even if we try to shut it out, advertising can become part of a city’s identity, as brands fade into our urban past. On CityLab: The Irresistible Visual Power of Urban Advertising

What We’re Reading

New Jersey fined Uber $649 million for saying drivers aren’t employees (New York Times)

Will Kansas City become the first major U.S. city with free bus service? (Kansas City Star)

Cities and states take up the battle for the open internet (Next City)

Venice got hit by a massive flood, again (Reuters)

Why street vendors make cities feel safer (Curbed)

Tell your friends about the CityLab Daily! Forward this newsletter to someone who loves cities and encourage them to subscribe. Send your own comments, feedback, and tips to

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Bernie Sanders and AOC Unveil a Green New Deal for Public Housing

Socialist Democrats are pushing the progressive envelope with a new iteration of Green New Deal legislation this week, this time with a focus on public housing.

On Thursday, New York Representative Alexandria Ocasio-Cortez and Vermont Senator Bernie Sanders introduced a new bill that would dedicate billions of dollars to energy retrofits for America’s dilapidated public housing stock. The Green New Deal for Public Housing Act would commit up to $180 billion over 10 years to upgrading 1.2 million federally owned homes.

At a press conference outside the Capitol on Thursday, Ocasio-Cortez said a bill focused on public housing reflects the larger aim of the Green New Deal to prioritize “frontline communities”—those that are most likely to be harmed by the climate crisis. “In the Bronx alone, 2,400 public housing residents may be going without heat tonight. That is inhumane,” she said. “That is environmental injustice.”

At the same event, Diane Yentel, president and CEO of the National Low Income Housing Coaltion, said: “We must build the political will to combat both the affordable housing and climate crises.”

The bill is an effort to bag two birds with one stone. America’s public housing portfolio is in a shambles, with deferred maintenance costs nationwide running into the billions. The bill introduced by AOC and Sanders would bring that backlog up to date while also reducing the energy consumption from this aging housing stock.

Overall, buildings are responsible for about 39 percent of global carbon emissions, and about one-third of emissions in the U.S. That puts energy retrofits front and center in debates about how to arrest climate change.

“For an estimate between $119 and $172 billion, you could decarbonize the country’s entire public housing stock,” said Billy Fleming, the Wilks Family Director of the Ian L. McHarg Center for Urbanism and Ecology at the University of Pennsylvania. “If you think about that from just a pure carbon perspective, that’s the equivalent of taking 1.2 million cars off the road.”

The energy retrofits imagined by the bill run the gamut, including new cladding, efficient window glazing, and electric appliances. Building-systems modeling tools would be used to determine the best approach to upgrades in different regions. All the technology envisioned by the bill is already within reach, according to Fleming. Energy retrofits could reduce the costs of public-housing water bills by $97 million per year (about 30 percent), according to estimates by the progressive think tank Data for Progress, and bring down energy costs by $613 million (70 percent).

Fleming, an alum of President Barack Obama’s Domestic Policy Council, is also a senior fellow with Data for Progress, which has led the national conversation on policy associated with the rising socialist left and the Green New Deal. He said that Ocasio-Cortez’s office approached the think tank to discuss how deep energy retrofits could be a way of improving the lives of public housing residents while also accomplishing Green New Deal goals.

“It was a surprise to us how quickly and how cheaply this could be done,” said Fleming, who worked on the proposal with Julian Brave NoiseCat, director of Green New Deal strategy for Data for Progress, and Daniel Aldana Cohen, director of Penn’s Socio-Spatial Climate Collaborative and, like Fleming, a Data for Progress senior fellow. “We began by saying, what are the things we have to do just to get public housing up to the standard that we promised residents?”

Overall costs for the program speak primarily to the dire straits of public housing in America. Estimates from the U.S. Department of Housing and Urban Development for necessary repairs for public housing nationwide through 2030 total $90 billion, work that includes abatement of lead, mold, and other toxins. Given the intrusive nature of this work, a more dramatic overhaul would not necessarily mean a much bigger lift.

“If we have to do all of this work anyway, what would it cost to take this a step further and do deep energy retrofits that get the nation’s entire public housing stock at or near a net-zero standard?” Fleming said.

The bill, which is cosponsored by Oregon Senator Jeff Merkley and Massachusetts Senator Elizabeth Warren, would create some 250,000 jobs—including high-paying jobs and union jobs, as the proposal’s backers are quick to point out. Some of these would benefit public housing residents themselves. A bill that would actually put severely delayed federal upgrades into motion would not only spur new opportunities, it would promote economies of scale to boost industries in weatherization and energy retrofits, its backers say.

“Policies such as this which protect the needs of workers, taxpayers and community should be implemented wherever public funds are spent,” said Mike Prohaska, business manager for New York’s Construction & General Building Laborers Local 79, in a statement.

The bill would have a seismic impact in New York City, where the nation’s largest public housing agency faces deferred maintenance costs of nearly $32 billion. Federal prosecutors accused the New York City Housing Authority of “systematic misconduct, indifference and outright lies” following an investigation into elevated blood lead levels among public housing residents. A local solution to the city’s public housing crisis looks impossible. In fact, earlier this year, HUD Secretary Ben Carson named a federal monitor to oversee the the New York City Housing Authority.

“As [New York City] makes plans for a changing climate, public housing residents are often last on the list, despite being some of the most vulnerable,” said Wanda Salamán, executive director of Mothers on the Move/Madres en Movimiento, a South Bronx community organization, in a statement. “The Green New Deal for Public Housing includes opportunities for residents to finally gain access to promised jobs, while improving their quality of life and planning for climate resilience.”

Yet the benefits of a GND for public housing would not accrue to New York and other coastal cities alone. The analysis from Data for Progress finds that such a bill would create more on-site construction jobs in states that voted for President Donald Trump in 2016 than in blue states.

The original Green New Deal framework called for upgrading all buildings in the U.S. as a way to transform the nation’s economy. Republicans pounced on that proposal as impossibly optimistic, citing figures from conservative think tanks that pegged the costs for building upgrades at $1.6 to 4.2 trillion.

So the new approach from AOC’s office is more piecemeal. The Green New Deal for Public Housing Act fits within an existing policy sphere targeting the built environment to bring down the country’s carbon pollution. A new, Green New Deal–inspired law in New York aims to cut the city’s carbon emissions by 80 percent by 2050, in line with the Paris Agreement. (Trump withdrew the U.S. from the Paris protocols earlier this month.) Numerous U.S. cities now require the owners of large buildings to measure and disclose their energy use.

The AOC–Sanders bill also promotes public housing as a goal in itself. A provision of the bill would repeal the Faircloth Amendment, a federal rule that caps the construction of new public housing units. Data for Progress has outlined a vision for a progressive housing agenda that leans heavily on public housing and other goals that current federal law (and federal funding levels) make difficult or impossible. People’s Action, a grassroots group, introduced a policy platform called the Homes Guarantee that outlines many of the same goals.

Housing has emerged as a high-profile issue in the Democratic primary, with numerous candidates touting a range of plans and reforms. In the fall, Ocasio-Cortez produced her own suite of protections for tenants, immigrants, children, and others, most notably a proposal for a national rent control policy. The left has found a policy arena in which they have common ground with establishment Democrats—at least in terms of big-sky proposals.

“The folks at People’s Action and in the housing and tenants’ rights movement really built the momentum for Congresswoman Ocasio-Cortez and Senator Sanders to feel like they had the cover and the urgency necessary to put this bill up,” Fleming said.

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Can Green License Plates Help Plug Electric Cars?

It could soon be much easier in Britain to recognize the cleanest cars on the road: green license plates. Stemming from a proposal released for consultation this week by the U.K. government’s Department for Transport, the special number plates would be reserved for ultra-low emission vehicles such as electric or hydrogen-powered cars, making them instantly visible on the road.

This should make it easier for civic authorities to give the greenest vehicles preferential treatment, such as allowing them to drive in bus lanes, use special parking spaces, or access areas that are barred to more polluting alternatives. Such spaces are expanding in Britain: London, for example, launched an Ultra Low Emission Zone in the central part of the city in April, which levies drivers of more-polluting vehicles a penalty charge of £80 ($103)—a cost that is doubled if not paid within two weeks—should they enter the controlled zone. In a new report, the city claims that pollution in this zone fell by more than a third in the six months since implementation began. The city plans to expand that zone further in 2021.

The special green plate is also designed to be a visibility campaign and an incentive program to speed the adoption of zero-emission vehicles. As Transport Secretary Chris Grayling put it on the government’s release on the subject: “Adding a green badge of honour to these new clean vehicles is a brilliant way of helping increase awareness of their growing popularity in the UK, and might just encourage people to think about how one could fit into their own travel routine.”

The concept isn’t exactly newdrivers of hybrid and electric vehicles in Ontario, Canada, for example, have been issued special green plates for the last decade. But the U.K. proposal goes a bit further than existing schemes in Europe. Paris has required cars to display a shield detailing its emissions grade since 2016, as a way of banning more polluting cars from entering the city. Many German cities have a similar system that bars cars without the right shield on the windshield from entering special environmental control zones. While these alert authorities to a vehicle’s emissions status, they don’t specifically identify electric cars, and remain relatively subtle markers.

Norway, however, has gone a step further, by prefixing all registration numbers for battery-powered cars with an “E” to make them instantly identifiable. That makes it easier to control access to EV-only spaces, such as special parking lots equipped with charging stations. The Nordic nation leads the world in electric-vehicle adoption, thanks to a remarkable suite of government programs and incentives.

Britain’s yet-more-visible green plates represent an effort to tap into that success story, and stoke more EV enthusiasm among the British motoring public. At present, most of the greenest vehicles don’t look much different from regular gas-burning cars. The government hopes that making other drivers more aware of EVs—and the enviable perks their drivers enjoy—will encourage buyers to consider switching to an e-vehicle themselves. Green plates might even become a form of chic signaling of a driver’s environmental conscience.

Britain is promoting EVs through other means already, of course, currently offering a £3,500 subsidy for all-electric vehicles (although possibly not for much longer), and has committed £70 million to doubling the existing number of charging points in the U.K.’s now-patchy network. Such infrastructure investments are vital if the government wants to meet its goal of phasing out all sales of gas- and diesel-powered vehicles by 2040, a goal it is now considering bringing forward to 2035.

Still, the public remain as yet largely unconvinced by the new mode, with only one in four drivers saying they would consider buying an electric car in the next five years.

Some environmental activists have expressed skepticism about the effectiveness of the license scheme. “If ministers really want to boost the take-up of electric vehicles” a spokesperson for Friends of the Earth told the Independent newspaper, “they should introduce more charging points and better financial incentives.”

Letting green-plated drivers use bus lanes and other forms of private electric-vehicle promotion might also accomplish little in the larger effort to rapidly transform a car-centric regime that plans to spend £30 billion on roads between 2020 and 2025. Regardless of the tailpipe emissions of the vehicles that use the roads, there are significant environmental costs to driving of any sort. (Even cars powered entirely by renewable energy produce, for example, particulate emissions from brake pads.) Giving EVs a green badge of virtue might help get more of them on the road, but if the ultimate goal is reaching net-zero emissions by 2050, it’s not going to be the only answer.

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How Green Banks Help Cities Transition to Clean Energy

Over one hundred global cities already get the majority of their electricity from renewable sources, with more than forty cities powered fully by renewable energy. Nineteen cities have announced their pledge that all buildings, old and new, will meet net-zero carbon standards by 2050.

However, despite this progress, fossil fuels have the same market share of the global energy system today that they had thirty years ago. As some cities, countries, and economic sectors have decarbonized, others have risen up to take their place. The pace of investment, and ultimately, the pace of change, must increase if we are to gain ground on fossil fuels.

In other words, the construction of renewable generation, battery storage, and transmission lines must increase. Electric vehicles must become more widely used, and charging infrastructure must be built out at scale to enable this. All of these projects are capital-intensive, meaning they require a large upfront investment which is paid back over time as the project generates income. To secure the initial capital, project developers must go to investors or commercial banks, which evaluate the project to make sure that it will be profitable.

Existing policies send market signals, but leave gaps.

Many of the most widely-used climate change policies focus on pulling various economic levers to improve the profitability of clean projects. Carbon prices raise the cost of fossil fuels, making clean energy more competitive. Renewable portfolio standards allow clean energy projects to generate an income stream by selling clean energy credits. Other policies like tax credits can also boost the economics of renewable power.

Other energy policies may take a command-and-control approach; for example, mandating that pollution controls must be added to fossil-fueled generation sources. In the U.S., we’ve seen many of these policies get increased attention as Democratic presidential candidates have released their climate plans and debated their merits at televised town hall events.

However, obstacles and points of friction still remain in transitioning to clean energy. Even with policies in place such as those just mentioned, projects can face barriers in securing the capital they need. Public investment can remove these barriers and close these market gaps. This serves to get more projects developed more quickly, and also lowers the cost of energy and the cost of compliance with other programs and regulations. At the state, local, and city level, institutions called Green Banks exist to manage and invest public capital based on the following principles:

Support small projects.

Small and geographically dispersed projects like residential or small business energy efficiency are often not cost-effective for private investors to underwrite. Green Banks can bundle together and projects that are not cost-effective to underwrite on their own. Pooling these loans diversifies risk and achieves scale, making them far more attractive to lenders.

De-risk new technologies.

Transactions that involve new technologies or have never been done before are more labor-intensive than typical standardized transactions, and can face resistance from investors. Green Banks can offer credit enhancements, such as loan loss reserves or loan guarantees, that help de-risk investments for private investors.

Reduce perceived risks.

Other perceived risks can cause lenders to offer capital only at a high cost, preventing the project from moving forward on an economic basis. Green Banks can directly co-invest in a clean energy project, through senior debt, subordinated debt, or other mechanisms. If a project is only able to secure financing for a portion of the costs, Green Banks can provide the gap financing needed to close a deal.

These techniques all draw private capital into projects that wouldn’t have happened without the Green  Bank’s involvement.

Green Banks have built track record of success.

Existing Green Banks have already proven that a single public dollar of investment can catalyze multiples of private co-investment. These projects simultaneously earn profitable returns for private investors, and provide economic benefits and reduced costs to consumers.

The track record of state and local Green Banks in the U.S. shows how these financial institutions can move projects forward in cities. For example, consider a success story from the New York City Energy Efficiency Corporation (NYCEEC). A property management company that wanted to make improvements to six of its multifamily properties. Incentives from the local utility would cover part of the cost, but significant gaps remained, and the developer needed an affordable loan. NYCEEC provided a $1.3 million loan, which is due to be repaid within six years. The improvements will reduce greenhouse gases in an amount equivalent to removing 3,200 vehicles from the road, and will also reduce the emission of fine particulates which damage city residents’ health.

A National Climate Bank could provide these benefits to more cities.

Residents of even more cities could benefit from these savings and improvements if the networks of Green Banks were expanded. One of the most exciting ways this could happen is through the passage of the National Climate Bank Act, introduced in the Senate in the summer of 2019. The bill would create a National Climate Bank, which would be empowered to capitalize state and local Green Banks, and provide technical assistance to newly forming Green Banks. For large projects outside the scope of what state and local Green Banks normally handle, the Climate Bank would also be able to invest directly to help projects move ahead. CGC’s own analysis found that this Climate Bank could mobilize up to $1 trillion of investment over 30 years with just $35 billion of federal funds.

Energy efficiency upgrades, expansion of cogeneration and distributed renewables, and clean transportation improvements are just a few of the ways that the growth of the Green Bank model could help to cost-effectively reduce greenhouse gas emissions within city limits. On a larger scale, the Climate Bank could invest in regional power transmission lines, making it easier for cities affected by transmission bottlenecks to procure renewable energy. The Climate Bank would be able to invest across sectors in a wide range of project types.

Given the urgency of the climate change crisis, policymakers are appropriately looking at a wide range of tools and levers to accelerate the clean energy transition. The Green Bank investment model is compatible with a wide range of other incentives, and a National Climate Bank would provide an influx of capital to boost the growth of the clean economy.

Learn more:

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