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Job Creation: Three Things Government Can Do
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Transcript of Job Creation: Three Things Government Can Do
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Elton B. Sherwin Sr. Managing Director Ridgewood Capital Author of The Silicon Valley Way and Addicted to Energy
Governing Sustainability Summit New York City – June 21, 2011
These slides express the opinions of the author and have not been endorsed by any organization or government agency
Three Simple Things Government Can Do to Create Jobs
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Agenda
• Connect the dots: Building efficiency = jobs – Improving building efficiency creates jobs
• Policy recommendations – Potential to create millions of jobs
– Permanent, sustainable American jobs • Do not require ongoing subsidies
• Cannot be offshored
– Modeled on New York City and San Francisco programs
525 University Ave. Palo Alto, CA
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Imagine Two Identical Towns
• Once a month all building owners go up on their roofs and burn money
– In “Old Town” everyone burns $1,000
– In “Green Town” everyone burns only $100
– Both towns do this every month
• Towns are otherwise identical
• After one year, which town is richer?
• After ten years, which town has more jobs?
Thought experiment Old Town Green Town
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Why Does “Green Town” Have More Jobs?
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Shift Spending from Utility Bills to Construction and Retail = New Jobs
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Improving Building Efficiency
= Jobs
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Improved Efficiency Creates Jobs Several Ways
• Initial labor
– Contractors
• Savings
– “Export” fewer energy dollars
– Increased local spending
• Wealthier individuals and businesses
– Spend more
• More competitive infrastructure
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Green Town:
Is richer
Has more jobs
Smarter place to buy real-estate
Better place to raise children
Green Town
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Upgrading Building Efficiency Creates Jobs
Not happening at scale
Houston Skyline
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Really Hard to Motivate Action
Even on projects that save money
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How Do We Motivate Private Investment?
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I Would Like to:
D+ D-
B A-
D- C+ B-
C+
D-
B- C+ D-
Grades for illustration only, not based on real measurements
Grade every building A+ to D-
Based on their actual energy consumption
Post the grade above the front door
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In Some Cities the “D” Buildings Use More Than Half the Electricity
D+ D-
B A-
D- C+ B-
C+
D-
B- C+ D-
Grades for illustration only, not based on real measurements
Just motivating them to upgrade to a C would be a big win
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Analyzed 17 Building Rating Systems
Around the World
European Unions Energy Performance Certificates UK Display Energy Certificates
LEED – New Construction LEED – Health Care
ENERGY STAR – Commercial buildings ENERGY STAR homes
PlaNYC (New York City) Australia’s Greenhouse Rating
HERS ASHRE EQ
CALGreen level 2 California AB 1103 California AB 758
DOE home energy scoring pilot Passive Home Certification
City of Seattle San Francisco Details at Slideshare.com
Lets talk about realistically what can be done.
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New York, San Francisco, Washington DC, Seattle, and the State of California all use the same rating tool: US EPA Portfolio Manager
Winning Strategy
New York and San Francisco
Required to calculate
ENERGY STAR score
High = 100
Low = 1
After two years:
Public disclosure
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Rating + Disclosure = Action
Class A office
• Score of 17
• Hire an auditor, who discovers
– Error in building control software
– Valves set incorrectly
– Wires reversed
– Wrong windows on south side of the building
• And upgrades are made
• Jobs are created
An example
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Public Disclosure of ENERGY STAR Scores Will Create Jobs
• Construction trades*
– General contractors
– HVAC mechanics and installers
– Electricians
– Plumbers
• Manufacturing
– Building materials, windows and coatings
• Environmental scientists, specialists, and technicians
• Energy auditors and accountants
• Truck drivers and more… *Renewable Energy and Energy Efficiency: Economic Drivers for the 21st Century, Roger Bezdek.
=
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What Can Your City/State Do?
1. Disclose ENERGY STAR ratings – Government buildings
– Schools
– Contests
2. Copy San Francisco or NYC Regulation – Straightforward
– Requires all commercial buildings to calculate Energy Star score
– In year 2: disclose it on the city website
3. Celebrate buildings scoring 90+
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Celebrate Success
New York City
• 111 Offices
• Five Banks
• Four K-12
• Two Hotels
• One Hospital
• One Courthouse
Two built in 1800’s
• 49 before WW II
http://www.energystar.gov/index.cfm?fuseaction=labeled_buildings.locator
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Celebrate Success
Built in 1966
• Lots of exposed glass in a sunny climate
• Property Manger: CB Richard Ellis 525 University Ave.
Palo Alto, CA
87
2007
94
2008
94
2009
92
2010
Palo Alto, CA
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Celebrate Success
• Lighting retrofit of 397 fixtures saves over $5,000 per month. – Breakeven less than two years
• Anticipated savings are $822,460 over 10 years
• Property Manger: Wells Real Estate
University Circle East Palo Alto, CA
85
2007
86
2008
92
2009
90
2011
East Palo Alto, CA
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Every City and State Should Be Able to Do This
1. Disclose ENERGY STAR ratings – Government buildings
– Schools
– Contests
2. Copy San Francisco or NYC Regulation – Straightforward
– Requires all commercial buildings to calculate Energy Star score
– In year 2: disclose it on the city website
3. Celebrate buildings scoring 90+
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When grades are published,
the rate of improvement accelerates.”
Sherwin’s Law
Phrasing adapted from Thomas S. Monson
A
“When performance is graded performance improves.
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National Target
• Above 60: all existing buildings
• Above 80: all new buildings
vs. 2003 average ENERGY STAR score
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Three Simple Things You Can Do to Create Jobs
1. Disclose ENERGY STAR ratings – Government buildings
– Schools
– Contests
2. Copy San Francisco or NYC Regulation – Straightforward
– Requires all commercial buildings to calculate Energy Star score
– In year 2: disclose it on the city website
3. Celebrate buildings scoring 90+
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Questions and Answers with
Back-up Slides
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Question: Take another minute to connect building efficiency
with jobs.
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Rating + Disclosure = Action
Class A office
• Score of 17
• Hire an auditor, who discovers
– Error in building control software
– Valves set incorrectly
– Wires reversed
– Wrong windows on south side of the building
• And upgrades are made
• Jobs are created
An example
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Over One Million Jobs Just in California
Accelerating the Pace of Energy Efficiency
*Renewable Energy and Energy Efficiency: Economic Drivers for the 21st Century, by Roger Bezdek.
Bezdek’s results are summarized here by Aaron Lehmer, in Renewable Energy Development Creates More Jobs than Fossil Fuels.
Almost all the jobs created in the energy efficiency category relate to buildings and their contents. The actual number of new jobs created by aggressive programs promoting building, appliance and electronics efficiency may be closer to 16 million jobs nationwide (32.18 million minus 14.9 million minus the transportation sector). California’s share of these jobs is at least 10% or 1.5 million. The challenge is to accelerate these jobs from into the current timeframe and to get on the advanced scenario, which could created these 1.5 million additional jobs.
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References
Job Creation data
• Energy Pathways for the California Economy, David Roland-Holst and Fredrich Kahrl, UNIVERSITY OF CALIFORNIA
• Renewable Energy and Energy Efficiency: Economic Drivers for the 21st Century, Roger Bezdek.
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More Conservative Estimates
• The Center for American Progress, using a more conservative methodology, estimates that doing deep energy upgrades on 50 million buildings would create 625,000 permanent new jobs. http://www.energyfuturecoalition.org/files/webfmuploads/RebuildingAmerica_Vision_Statement_FINAL.pdf
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Question: Are buildings required to upgrade if they score
poorly?
Answer: No
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And Senior Care Facilities and Data Centers
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References
ENERGY STAR Hyperlinks (click on reference)
• ENERGY STAR Program for commercial buildings.
• San Francisco benchmarking legislation
• New York City benchmarking program overview
• Overview of all US disclosure programs (from IMT)
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Question: Where can we find a list and map of Energy Star
buildings?
Answer: On the EPA website
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EPA Website Available Today
New York City
• 111 Offices
• Five Banks
• Four K-12
• Two Hotels
• One Hospital
• One Courthouse
Two built in 1800’s
• 49 before WW II
http://www.energystar.gov/index.cfm?fuseaction=labeled_buildings.locator
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Question: My city won’t force building owners to disclose
anything. What should we do?
Afterwards, a question in the hallway:
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Check the EPA Website
http://www.energystar.gov/index.cfm?fuseaction=labeled_buildings.locator
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Focus on the Winning Buildings
1. Disclose ENERGY STAR ratings – Government buildings
– Schools
– Contests
2. Copy San Francisco or NYC Regulation – Straightforward
– Requires all commercial buildings to calculate Energy Star score
– In year 2: disclose it on the city website
3. Celebrate buildings scoring 90+
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Question: What about residential buildings?
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Additional Steps Residential
• Disclose last two years of energy costs* in residential MLS
• Require disclosure with green claims
– No “green” claims without disclosing actual energy consumption.
– Five years of disclosure
• Prior two and next three years
– Use signage laws
* Optionally, home sellers can disclose a HERS score.
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Use Signage Laws to Ban Advertising Without Disclosure
Energy Saving Green Home
(Data not disclosed)
Require • Last 2 yrs utility bills • Next 3 yrs
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Grade Every Building in the State A+ to D-
Based on Energy Consumption
And publish the grades
1 Main St. D- 2 Main St. A-
A For the Brave
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Send Window Stickers to the Top Performing Buildings
Internet disclosure and window stickers will create a lot of jobs
C+
Posting is optional
97
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Translating Building Percentiles and ENERGY STAR scores
to Grades
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Letter to a fictional governor
• 70 recommendations for state policy
• Job creation
Previous Book
• Creating new products
• Creating new companies
These slides: www.EltonSherwin.com and on slideshare