Coalition for Green Capital

Reed Hundt co-authored a piece with Rep. Ed Markey (D-MA) comparing the investment and job creation opportunities in clean energy to the telecommunications revolution in the late 90's:

Jobs and Change, Communications and Energy
By Ed Markey and Reed Hundt - March 9, 2010, 9:34AM

Jobs are the chief concerns of most Americans right now. Those with them are scared they might lose them. Those without them want to find one. What we need to do is clear: pass laws that open new industries to job opportunities for millions of Americans - and in a hurry. Predictions that we will not return to full employment for five or more years should drive us to act as we did in the early 1990s, when we faced a similar, although far less, serious economic slump.

When Congress enacted the spectrum auction authority in 1993 and the market-opening Telecommunications Act of 1996, we intended to create new opportunities for high-paid work in the communications industry. As a legislator and a regulator, we partnered to create policies that did that, and we would freely admit that what happened exceeded our wildest dreams.

In the ten years that followed the spectrum auctions that created competition in digital cellular and the regulatory framework that opened Internet access to competition and the telephone network to innovation - 1997 to 2007 - investors, according to McKinsey and Company, poured more than $850 billion in new capital into mobile, data, and expanded cable networks in the United States.

This investment drove job creation beyond any economist's prediction. Unemployment fell to 4 percent by the end of 1990s, and nearly 65 percent of the population was employed. That's a remarkable contrast to the numbers today: 9.7 percent of Americans are unemployed and only 58 percent of people are employed. The job growth led to national income growth and increased tax revenue, so that the federal budget, contrary to every estimate at the beginning of the 90s, was balanced by 1998.

We can get the same upside surprises if we pass a law that retools the carbon-based energy sector of the last century and encourages private investment in a 21st century energy economy built on alternatives such as wind, sun, biomass and geothermal. That's the purpose of the Waxman-Markey bill, which passed the House of Representatives last June.

Reform in communications stimulated creative destruction. For example, the old long distance industry charged ten cents a minute for a call when we passed the Telecommunications Act. Now people are not even aware that there used to be a long distance charge when they use their phones to call anywhere.

The replacement of the old networks with the new led to waves of innovation. Our reforms permitted everyone to unplug the phone line from the back of the telephone and stick it into the back of the computer. That connection was the first pathway to the World Wide Web - in large part because we did not permit the telephone company to charge extra money for all that extra and unpredicted use. The new demand for data connections drove telephone companies to buy routers and switches, to build data centers, and to upgrade lines. Cable companies were driven to respond by switching some of their capacity from one-way video programs to high speed two-way internet access, giving rise to broadband. In response, the phone companies are now installing fiber, taking broadband to new levels of speed and lower price per bit.

Similarly, in the energy sector we need to retool the existing generation and distribution networks with cleaner forms of generation, open markets to innovators who will build power lines that lose fewer electrons and connect new sources of clean power to users, and reward investors for installing more efficient ways of using electricity. Creating the right framework for our communications networks led investors to commit about $850 billion to rebuild those networks. With the right set of policies, it is reasonable expect a similar explosion of private sector investment in the energy sector. This will result in consumers paying less for heating, cooling and lighting, and America's energy sector will be firmly based on abundant, cheap and clean fuels. Nothing will pull innovation into the energy sector more than wind farms demanding better storage technology, solar farms demanding better ways of capturing and converting sunlight into electricity, and appliances and electric vehicles that can talk to the grid if it is smart enough.

There are other areas of the economy where Americans can and should find new jobs. In the energy sector we not only will need millions of employees, but we also know that those millions will help us achieve independence from foreign oil and an end to the pollution of the environment from carbon emissions. The trifecta of huge employment, national security, and protection of the environment is a winning ticket for America. We have found that winning formula before in hard times that proved to be the dawn of economic growth; we can turn the dark days of the present into sunny optimism about our future once again.


Rep. Edward J. Markey (D-Mass.) is the chairman of the Select Committee on Energy Independence and Global Warming.

Reed Hundt was chairman of the Federal Communications Commission from 1993-1997.


-Posted by Alex Kragie

Our co-chairman Reed Hundt has been regularly blogging on issues relating to the Green Bank on TPM Cafe at Talkingpointsmemo.com. Here are some of his latest posts:

How to create millions of jobs By Reed Hundt - January 31, 2010, 11:50PM The White House estimates that the jobs bill could cost 100 billion dollars. Roughly that amount will create about a million jobs. That is eight million less than the goal of full employment by end of 2012. The gap is to be closed by private sector investment. The key to catalyzing rapid private sector investment is action, both by way of regulation and modest financing.

Agencies can open closed markets and create new markets that call for new investment. In the communications sector that would occur if the FCC added certain new spectrum to the pool of commercially available airwaves, or changed universal service to match broadband investment. In the energy sector a national renewables standard plus a very modestly funded Green Bank would cause utilities to invest in retrofits and clean electricity generation. The Green Bank would need capital in an amount equal to about five percent of the desired lending, as long as the target projects are not technologically risky and can couple with a power purchasing agreement that assures the clean electricity will be purchased. Thus capitalization of $10b would produce about $200 billion in lending, which is matched up with $200 billion in equity investing would total $400 billion, and create about four million jobs, as well as replace about a fourth of the carbon-intensive electricity generation of the United States with cleaner alternatives, ranging from wind, solar, biomass and natural gas in the short term to nuclear and geothermal in the longer run.

With current tax treatment and low cost financing, all the alternatives can be brought on to the grid at or below existing electricity prices for at least the next three years. It's reasonable to believe that a million new jobs could be created over three years from this effort, which of course would also guarantee that America would lead the world in carbon abatement.


Congress will not, and should not, buy services or hire people in enough volume to create full employment. Therefore, the executive branch has to choose between a regulatory program for job creation or trust in the natural resilience of the American economy. Surely the unreconstructed and still shaky pillars of the economy ought to give the White House a healthy fear of excessively modest action, especially when the useful regulatory interventions are in any case pro-competitive, pro-climate, pro-productivity.




President Clinton By Reed Hundt - January 29, 2010, 9:36AM President Clinton has been endorsing a Green Bank. See as follows:


A million green jobs, cheap!

Obama's green-collar economy dream may wilt in his deficit freeze. But Bill Clinton says he knows how to save it

BY JOE CONASON

...At least one substantive answer was provided to the Obama White House by former President Bill Clinton. For several months, Clinton has been lobbying administration officials, notably including Vice President Joe Biden, to create a new energy efficiency loan guarantee program that he says could result in well over a hundred billion dollars in new investment -- and employ more than a million workers to install green retrofits on commercial, institutional and residential buildings.

Last fall, Clinton directed staff at the Clinton Climate Initiative -- one of his foundation's programs -- to prepare a lengthy memo on the problems and potential of a Federal Energy Efficiency Loan Guarantee Program. According to their analysis, such an initiative could require as little as $9 billion in commitments by the U.S. Treasury to leverage $$67 billion in bank financing, because the savings on energy retrofits are both substantial and reliable. In a late October 2009 memo to Biden, White House energy advisor Carol Browner and Obama economic advisor Larry Summers, Clinton said he believed that the loan to guarantee ratio actually could be as high as 10-to-1. Under that scenario, banks would lend building owners as much as $150 billion if the Treasury put up $15 billion -- and every billion dollars would create between 7,000 and 9,000 jobs in the construction, architecture and manufacturing industries.

The Clinton memo recommended further that the program be structured so that loan applications would lead to construction starts within five months. Promoting this idea among Democrats in Congress as well as administration officials, Clinton has noted that if the loan program could be implemented swiftly and successfully, a million new jobs would become available before the November midterm elections.

While there are many reasons why building owners and lenders have failed to capitalize on the savings available from energy retrofits, there is little disagreement on their benefits for both markets and society. Other countries, notably including Germany and Sweden, have made great progress toward their own carbon-emission objectives by deploying such "unsexy" measures...





A Bank by Any Name By Reed Hundt - January 23, 2010, 12:16PM Senator Jeff Bingaman (D-NM) has joined Congressman Van Hollen (D-Md) in calling for a Green Bank to be created as part of the prospective jobs bill. They are both to be praised, and listened to.

Here are some basic reasons they are right:

First, there is a crisis in lending to all alternative energy technologies. In the absence of reliable demand for clean electricity, continued anxiety about all loans from commercial banks still burdened by troubled assets, and worries about technological risk, the reality is that even conventional clean energy projects are not attracting financing that is adequate to assure returns to equity above modest hurdle rates, without raising prices for the resulting electricity to levels that are unacceptable to regulators or customers in unregulated markets. For less conventional projects, the situation is worse.

Second, to create millions of jobs in this sector starting right away and extending for at least the next three years there are no ways to proceed other than a combination of:

-- financing immediately deployable wind and solar and biomass projects,
--financing natural gas,
--financing efficiency gains implemented by utilities and energy service companies,
--giving tax credits and grants in lieu of credits to all financed projects (extending the stimulus, in effect),
--extending department of energy support of innovative breakthrough technologies,
-- and giving tax credits to home owners for efficiency gains.

There is no way to achieve the Van Hollen goal of several million new jobs by 2012 without all these steps. And there is no way that this goal is impractical in execution or undesirable as a policy matter.

Third, it is long past time to stop saying "it would take too long" to get a lending authority up and running. I have myself started a half dozen companies that commenced operations in less than a month after incorporation. Starting is not the same as total completion of a full range of activities, but starting is progress and also is job creation. The success stories of the Haitian relief effort (and there are some), the recovery of the cellular networks after various natural disasters, numerous military responses -- many other examples teach that in a couple of weeks productive and complex efforts of all kinds can achieve measurable and meaningful outcomes. The entire Obama transition was start to finish a 90 day story of business creation and completion, going from zero to a massive output of very good -- in my opinion -- thought and research. The Nixon Wage and Price Administration was created in 17 days and by 30 days had preliminarily impacted all businesses in America. I could go on. As FCC chairman and CEO, I was responsible for a team that reorganized the 2,000 person agency, hired 400 people, laid off hundreds, closed dozens of offices, put the agency on the Internet, and overhauled regulation in virtually every sector of the communications and media parts of the economy at the behest of Congress. All delays were a function not of the limits of human endeavor -- the great people at the FCC knocked themselves out and the industries gave great input on infinitely complex issues. Delays such as they were came from the regulations of the administrative process, the oversight of OMB, the regulations relating to government contracting, and judicial review. Anyone at the Department of Energy today could tell you that the same problems slow sometimes to a maddening pace their efforts to create jobs in conventional and in breakthrough technological areas. Hardly any words are needed in a jobs bill to speed activity, without sacrificing transparency, integrity of thinking, or any of the virtues of good governance. I have been fortunate to run or co-run companies, coalitions, commissions, cases, an agency, and various campaigns for causes. I am absolutely convinced that honest and wise disbursement of other people's money --- taxpayers' or investors' or contributors'-- is not guaranteed by complex, time-insensitive and redundant reviews of action. It is guaranteed by transparency, accountability, hard work, good culture, clear governance -- and simple straightforward and expeditious decision-making. Time, by contrast, will kill all deals, and thwart all efforts to any goal.

Fourth, venture capital and private equity and utilities and home contractors and manufacturers and all interested investors all have to be given the boost of low cost long term financing if we want both large scale immediate job growth and also a steady path from a carbon intense to a clean platform for our economy. I see brilliant technologists -- such as Bill Gates just this week -- extolling the virtues of cutting edge breakthrough inventions; others are sure that nuclear power is the right future for America; some are convinced that just funding single deployments of difficult technologies will prove or disprove everything we need to know; and some believe a third or more of all needed energy can come from wind and sun in conventional existing form factors. This reminds me, with a blinding flash of recognition, of the debates about the new thing called the Internet that occurred in dozens, probably hundreds in fact, of meetings that as FCC chair I attended or called in 1993-97. Everything said in total proved to be right and almost no specific idea turned out to be exactly right. But here is what I learned: only when the big, conventional, incumbent proprietors of the existing fixed line and cable networks decided to participate in the great conversion to mobility and data did we see the future really unfold. So there is no bright line between conventional and breakthrough, and no clear demarcation between an invention and a deployment of something conventional. Much learning in fact comes from repeated practice as opposed to laboratory experiment or single field tests of any scale.
What is important is to have entrepreneurs push incumbents and have incumbents respond by adopting conventional changes now and more innovative changes just a little later. That way progress is made, and fascinatingly it turns out that the conventional deployments -- wind and sun and biomass and gas in the case of energy, and narrowband internet in the case of the salad days of the Internet -- create the demand for more innovative approaches. As an example, if we finance 30 gigawatts of wind projects starting now (all possible), that will be a huge demand market for all the storage technologies that venture capitalists and energy department researchers can come up with. So too narrowband internet created demand markets for Cisco and a platform for Yahoo!, only to give way in time to broadband. I need hardly add, but will, that the million more new jobs and 2.1 trillion dollars of net stock sales that came from the Internet driven investments were well received by the country and the otherwise hard to please tax authorities of government at every level.

What's the therefore? It is that I hope the proponents of financing breakthrough technologies that will pay off in distant years (which we surely need) and those desirous of financing wind, sun, biomass and gas right away could agree -- and agree with the efficiency mavens too -- that the right answer is ALL, and not all of one and none of the others.

Fifth and last, we have to aim for cheap and abundant clean energy that replaces carbon intensive energy, and we have to achieve that replacement much sooner than 2020 and thereafter for two huge reasons: we need the jobs now and we need to stop climate change now. I say "cheap" because no new technology has ever conquered the world by coming in as an expensive but identical version of an existing good or service. The problem is that clean and "dirty" electricity consist of identical electromagnetic waves. If clean costs more than dirty, why would we think everyone will buy it? There are only two solutions: raise the price of "dirty" or lower the price of clean. In politics as in many other walks of life, "both" is often a great answer and "both" is the right response to the "identical wave" problem. We want the price of "dirty" to go up and the price of "clean" to go down. As it happens, by the inexorable mathematics of capital formation, the lower the cost of capital, the lower the necessary price for the product produced by that capital. In other words, use a long term low interest bond to fund the clean energy project and the project owners need to charge customers a lower price in order to make a fair return. Specifically a conventional wind project can needs a 6 or 7 cent per kilowatt hour wholesale price in order to compete with "dirty". With Green Bank financing that is doable right away. Without Green Bank financing the price has to rise to 11 to 12 cents, and then the project is competitive only in very high price states like Hawaii, Connecticut, and parts of California.

As to raising the price of "dirty" that is the purpose of a cap or a carbon tax. It is important. It is desired. But even if the House climate bill were passed, it would not raise the price of "dirty" sufficiently to make "clean" competitive without Green Bank financing until at least 2020 or possibly longer. In short, "both" is the right answer: lower the price of clean now, raise the price of dirty as soon as the economic health of the country and the political make-up of Congress permit.




Posted by: Alex Kragie

ROCHESTER HILLS, Mich., Jan. 21 /PRNewswire-FirstCall/ -- Energy Conversion Devices, Inc. (ECD) (Nasdaq: ENER), the leading global manufacturer of thin-film flexible solar laminate products for the building integrated and commercial rooftop markets, commented today on the letter sent by Congressman Chris Van Hollen to President Obama urging the President to include creation of a Green Bank in the Jobs Bill.

In his letter to President Obama, Congressman Van Hollen proposed the creation of a "Green Bank" separate and apart from the existing bureaucracy of government, similar to the Clean Energy Deployment Administration included in the House-passed American Clean Energy and Security Act, and mandate that the Green Bank support private investment in conventional, job-generating retrofit and clean energy projects across every state in America.

Congressman Van Hollen also noted, "A Green Bank could be capitalized on a one-time basis with $20 billion and never need another dime from government. With an annual budget of less than $200 million and several hundred employees, it could cause more than $200 billion in new private sector investment, propel economic growth and create more than two million good-paying jobs over the next three years. Most importantly, it could launch a new era of broadly shared prosperity in a way that permanently strengthens our national security."

"We continue to be very appreciative of the Obama Administration's efforts to support American clean technology," said Mark Morelli, ECD President and CEO. "As part of the effort to support clean energy and clean technology development, we support Congressman Van Hollen's request that the Green Bank be created and implemented quickly. The most efficient way to do this is in the Jobs Bill. Our American clean technology and clean energy industries need immediate and visible support to continue the recovery that has begun with the stimulus programs.  The Green Bank will be a critical partner with private industry to deliver on the promise of job creation and energy independence."

About Energy Conversion Devices

Energy Conversion Devices is a leader in building integrated and rooftop photovoltaics. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to energy using proprietary technology. ECD's UNI-SOLAR® brand products are unique because of their flexibility, light weight, ease of installation, durability, and real-world efficiency. Through its Solar Integrated Technologies business, the company also designs, manufactures and installs rooftop photovoltaic systems which enable customers to transform unused space on the rooftop into a value-generating asset. For more information, please visit www.energyconversiondevices.com.

This morning, Rep. Chris Van Hollen sent a letter to President Obama advocating for the inclusion of an independent, conventionally focused Green Bank for inclusion in any Jobs Bill. You can find the full text of the letter in the Downloads/Additional Information section of the site.

Rep. Van Hollen is and has been an exceptionally strong leader on clean energy issues, and we're very happy to have such a gifted legislator leading the charge towards millions of new jobs, energy independence and the transition from carbon to clean.

-Posted by Alex Kragie

As 2010 begins, Congress is presented with a tremendous opportunity to dramatically improve the future of the clean energy industry in the United States. Before the year is out, we have the opportunity to include mechanisms for financing energy efficiency and conventional energy projects in the Senate version of the upcoming Jobs Bill, the House version of the upcoming Jobs Bill and a final Energy/Environment Bill in the Senate. By providing low-cost financing for these projects, we can leverage public funds to stimulate private investment in the clean energy sector, creating millions of jobs. As we move into the new year, we need your help to make sure that Congress hears you. You can make your voice heard through four easy steps:

1. Go to http://www.senate.gov/general/contact_information/senators_cfm.cfm

2. Find your Senator's contact info on the easy to use list and click on the link under their name that says "Webform"

3. Tell your Senators that you want to see the future of the clean energy industry in America ensured through the passage of a comprehensive Energy and Environment bill in the US Senate

4. Then tell your Congressman to be sure to include the Green Bank/CEDA in any House Jobs Bill at https://writerep.house.gov/writerep/welcome.shtml

We'd also like to hear your ideas directly. Send me an email at coalitionforthegreenbank2010@gmail.com, and let me know what you're thinking. Best practices, suggestions, comments; feel free to get in touch with me with your thoughts.

Happy New Year to you and your family, and let's help make this the year that we secure our domestic clean energy future here in the United States.

Alex

-Posted by Alex Kragie

"The idea out there that intrigues me the most is to create a win/win by focusing on green technologies, via a variation of the Green Bank that had wide bipartisan support in the House Energy and Commerce Committee and in the Senate Energy panel. Crafted and championed by Chris Van Hollen in the House and Jeff Bingaman in the Senate, the Green Bank is a way to leverage public capital into serious private investment in enhancing energy development and conservation.


A Green Jobs Bank would require Congress to fund a one time capitalization of $25 to $50 billion to make loans and loan guarantees to private companies—not, in the short run, to do cutting edge technology, but to focus on bread-and-butter things like energy conservation via retrofitting of buildings, conventional clean energy production, and ramped-up manufacture of clean energy components like wind turbines and solar panels."

From Roll Call (12/9/09)

Today, Thursday, December 3rd, our Co-Chairman Reed Hundt will be attending the White House Jobs Summit on behalf of the Coalition for the Green Bank. The attendees of the summit will be a select group of leaders and thinkers that include:

Eric Schmidt, Google
Randall Stevenson, AT&T
Surya Mohapatra, Qwest
Frederick Smith, Federal Express
Brian Roberts, Comcast
Bob Iger, Disney
James McNerney, Boeing
Andrew Livens, Dow
Peter Solmssen, Siemens
Stephanie Burns, Dow Corning
Phaedra Ellis Lamkins, Green for All
Reed Hundt, Coalition for the Green Bank
Larry Mishel, EPI
Alan Blinder, Princeton
Paul Krugman, Princeton
Joe Stiglitz, Columbia
Bob Greenstein, Center on Budget and Policy Priorities
Jeffrey Sachs, Columbia
David Ickert, Air Tractor
Woody Hall, Diversapack
Rose Wang, Binary Group
Anna Burger, Change to Win
Leo Gerard, United Steel Workers
Joe Hansen, United Food and Commercial Workers
Randi Weingarten, AFT
Mayor Frank Cownie, Des Moines, IA
Mayor Julian Castro, San Antonio, Texas
Mayor Ed Pawlowski, Allentown, PA

The idea behind the summit is to draw some of the best thinking behind job creation in the US together, and the Coalition for the Green Bank fits this description perfectly. With our proposal for the inclusion of a Green Jobs Bank in any Jobs Bill that passes through Congress, the coalition is supporting both instant and long-term job creation in the clean energy sector. Efficiency/retrofit projects that can be deployed immediately combined with clean generation projects that are shovel-ready once affordable financing is provided are the two key means of job creation that the GJB will offer.

A Jobs Bill that includes the Green Jobs Bank will uncork the deluge of investment that is backed up in the clean energy and efficiency/retrofit industries by lack of access to affordable capital. Investment in this high-growth sector will immediately create a rush of well-paying, long-term jobs that will build the base of the clean energy generation and efficiency/retrofit industry right here in the US, halting the flow of capital abroad to purchase the necessary elements of the clean energy supply chain and keeping that investment within our borders. And, by financing the manufacture of clean energy and efficiency/retrofit products, the Green Jobs Bank will be able to help fill the void left by the massive slump in the American domestic auto industry.

The Green Jobs Bank is the complete package, and the best way to put Americans back to work in an industry that can last for generations, not just as a temporary fix.

The Coalition for the Green Bank has seen tremendous growth in the recent months. We have gone from a core group of businesses interested in finding a way to finance the transition from carbon to clean to a group of 90 distinct businesses and 114 individual members, with more joining by the week. We have been to the offices of over 85 Senators to spread the word of the Green Bank and the importance of financing the transition to the clean energy economy, especially in the face of the strong efforts by China and others to assume the mantle of global leadership in this new rapid-growth and high-potential sector. And, as reported by Peter Behr in the New York Times, "of all the pieces of climate legislation before Congress this year, the most popular may well be proposals to create a federal bank to channel loans, loan guarantees and other financing to clean energy projects."

The CEDA/Green Bank has been enthusiastically embraced by the House and the Senate, and the businesses that make up the coalition are thrilled at the enthusiastic reception that it has received as it has moved through the legislative process. The final step is getting an energy/climate change bill passed in the Senate. The coalition is proud to be supporting a piece of the legislative package that has such strong bi-partisan appeal and creates such enthusiasm among members of Congress. Every day we get closer to an overall bill that can pass the Senate and we look forward to a robust clean energy economy right here in the United States.

-Posted by Alex Kragie