Beltway Blindness Hampers New Energy Plan
by Craig Severance
All of us are familiar with the story of the group of blind men who encountered an elephant. None of them could see the whole picture, so each of them described the elephant from his own perspective.
Blindness has also habitually been a problem for those we send to Washington, D.C. "Beltway Blindness" is now clearly hampering the discussions about the new Energy & Climate legislation working its way through Congress. It is easy to believe that solutions you are exploring will work, if the only people you hear from are Washington think tanks, law firms, and lobbyists. Examples:
Auto Efficiency. D.C. legislators and bureaucrats seem to believe that simply passing new fuel efficiency standards, and funding tax credits for plug-in electric vehicles, will magically cause people to want to buy smaller cars. Yet, Congress still prevents businesses (essentially all contractors, lawyers, doctors, real estate agents, you name it) from recovering the cost of lighter vehicles used in their businesses. The message is if you own a business, buy a truck over 6,000 lb GVW if you want to write if off. See "She's So ... HEAVYYYYYY!" article
Energy Efficient Buildings. The Waxman-Markey energy & climate bill includes provisions to fund state energy offices to develop new energy programs and push for new model building codes, and to encourage local governments to set up tax improvement districts to fund energy efficiency & renewable energy improvements to buildings. The emphasis is clearly upon government agencies to get things done.
State Energy Offices? I've been there, done that. They often do a good job of publicity, but this is usually limited to people who are already listening. Their impact is often limited to funding a few pilot projects.
Tax Improvement Districts? Sounds good, but this requires up-front money to "loan out" to building owners in the first place, cash most local governments are not known to have lying around. It also requires new local government staff to administer these programs. What do you know -- its another government program! Perhaps these will be popular in places like Berkeley and Boulder, but they are not likely to reach into every community in America.
New Building Codes? Try to get these passed in all 50 states, when builders fight them tooth & nail because the extra costs will drive up home prices and make it more difficult for buyers to qualify for loans.
Waxman-Markey seems to push for building efficiency, but no one has addressed the fundamental problem that when people buy a home, an energy efficient home costs more up-front, and therefore is more difficult to finance. Instead of relying upon new government programs, if a regulation was passed to require mortgage bankers to factor energy savings into borrower qualification standards, building energy efficiency would be revolutionized. Then, a new energy-efficient home would be easier to finance than an energy hog. Then, when you went to your banker for a refinance to remodel your kitchen, it would be easier to qualify for the refinance if you also did a full Energy Makeover reducing your utility bills. See:"How to Get Bankers to Fund Green Buildings". for a way that addresses how we actually buy homes and fund improvements: mortgages!
Investment in Renewable Energy Projects. Congress has adopted powerful tax credits and depreciation deductions for new renewable energy projects. Perhaps since they are surrounded by D.C. law firms, and lobbyists from large corporations, no one in Congress seems to think it is a problem that actually implementing these projects requires the assistance of very costly specialized law firms, and the only ones who can invest are big corporations. Non-profits and governments are unnecessarily restricted from leasing solar equipment. Individuals and small businesses are essentially prohibited from using the tax credits and depreciation deductions if they invest in such projects. See "Solar for Lawyers and Big Corporations - How to Keep Normal Folks From Investing in New Energy" for a description of these barriers and how to fix them.
Do We Really Have a Crisis, or Not? Policymakers are attempting to enact energy & climate legislation to avert a worldwide global warming crisis, and strengthen America's economy. They are trying to "pull the levers of power" to implement solutions, but the levers they are picking are not connected to anything in the real economy.
We don't have time to enact a lot of good-intentioned but ineffective government programs. If we are really serious about change, Congress needs to pick solutions that will actually work. Getting out of D.C. and asking their constituents what are the real barriers to action may be the first step to curing this Beltway Blindness.
This article was originally posted on May 5, 2009.