Emerald Cities

Joan Fitzgerald’s Emerald Cities takes a look at how cities are leading the way toward more sustainable economic development. As the book was published at the start of the recession, many of the optimistic programs described have surely not fulfilled their goals. But the plans, policies, and organizations illustrated throughout Fitzgerald’s book are a good road map for urban planners, policy makers, and entrepreneurs alike.

America seems to have dropped the proverbial ball when it comes to global environmental leadership, action, and production. While our most progressive state (environmentally, anyway), California, has a 2020 goal of reducing greenhouse gases by 25%, Sweden will be oil-independent by then. Additionally, manufacturing of solar panel and wind turbine components has been spearheaded largely by European countries, and now China; so much for our own rust-belt revitalization.

Even still, many of the international examples of appropriate environmental policy are achieving mixed results. For instance, Germany produces 14% of its energy from renewables; however, Germany’s energy import dependence is at 62% and growing. As of 2010, 26 new coal-fired plants were being built in Germany, which would offset any carbon dioxide savings from solar and wind expansion.

Public policy has enormous potential to impact our environment and our economy. Adopting a Renewable Portfolio Standard (RPS), or a Renewable Electricity Standard (RES) will require increased production of energy from renewable sources. As of 2012, 30 U.S. States have implementedthese types of mechanisms and 7 more have voluntary goals. Tennessee and most of the southeast are not among those forward thinking states.

Currently, it is illegal for utility companies to buy back power from customers in most municipalities. By changing these laws, homeowners are incentivized to make “green” upgrades, and RPS’s become easier to attain. Presently, “green” upgrades are not given credit through traditional appraisals. California has passed a law that forces sellers to disclose energy efficiency, providing a means to compare and reward efficiency.

Nearly 40% of greenhouse gas emissions come from buildings (twice the amount from the transportation sector) and 50% of building energy comes from coal, the dirtiest of fossil fuels. The Cambridge Energy Alliance, a non-profit organization, and Berkley FIRST, a local government initiative, are two possible means to the same end: energy efficient buildings.

The Cambridge Energy Alliance is a non-profit created to implement an initiative seeking to retrofit half of all existing buildings in 5-7 years. (This would only reduce greenhouse gas emissions by 10%, according to 2010 statistics.) With $500k in seed money, from local foundations and institutional investors, Cambridge Energy Alliance works through local utilities to hire auditors that make recommendations and complete the work.

The audits are “free” to customers, through a system-wide charge to all consumers. The revolving fund would offer low interest loans for retrofits, to be paid back through lower utility bills. Unfortunately, the Cambridge Alliance had much difficulty maintaining the revolving fund through the recent economic downturn.

Berkley FIRST is a program designed to encourage the use of solar with a self-financing system. The city sends an approved solar installer to evaluate and install the appropriate solar system, for which homeowner pays no money up-front. When the owner signs the contract, the city pays for the system and adds the cost to the property tax bill, which is repaid over time. The Berkley FIRST special tax is a lien on the property that ranks above the first mortgage.

The increase in property tax is roughly netted out by energy bill savings. In addition, there are rebates and federal tax credits available. The homeowner will break even until the cost of installation is amortized over 20 years, at which point the homeowner will reap permanent savings on their energy bill. This approach does not require tapping into home equity for credit, and the city’s initial costs were financed by the sale of bonds.

Job growth potential is great in renewable energy component manufacturing and in the skilled labor required to install “green” retrofits. The mutually dependent relationship between sustainability and the business community cannot be ignored; also important are government policies to encourage “green” action. According to Fitzgerald, the three E’s (Economy, Ecology, and Equity) are essential to societal sustainability:

This book is rich with examples of how cities and organizations are tackling a multitude of environmental issues (too many to discuss in this blog) such as transportation, recycling, waste disposal, and social justice (as related to the environment.) Emerald Cities connects the dots between environment, industry, policy, and business in a way that is personally inspiring. Environmental solutions that are based in business-growth policies will be more appealing to all involved.

In conclusion, two quotes from the text: “Renewable energy, energy efficiency, green building, recycling, waste reduction, fewer cars, more trains, walking, biking are not individual policies but parts of the whole of how cities must be transformed.” And, “A considerable amount of policy, investment, and planning will have to take place to realize a vision that links transportation, sustainability, economic development, and social justice.” Amen.