Bob Massie

Infrastructure spending for families

By Bob Massie
December 14, 2008
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BARACK OBAMA intends to invest in public infrastructure and boost green technologies. These powerful ideas should be more directly connected.

As many have noted - such as the newly established Green Justice Coalition - we could solve many problems at once by stopping the waste of energy and dollars flooding out of American homes.

Think of this as "infrastructure spending for American families."

We need to break free from our paralysis. When energy prices rise, we can't afford efficiency improvements. When prices drop, the payback seems too long. This is the business-crushing vacillation between "shock and trance" to which Obama referred two weeks ago.

So how do we make repairs despite fluctuations in the price of oil and gas? The solution is simple and elegant: The state could set up a leveraged investment fund to help families make changes immediately.

Here's how it would work. The state would allocate a small amount of money to guarantee a fixed interest rate for private investors. Sixty million dollars would be enough to pay a mouth-watering 6 percent on $1 billion. The money would be disbursed at zero percent to anyone willing to make an investment in insulation or heating systems. Renters could split the benefits with owners. The loans would be paid back directly from the savings.

Such a program would achieve five goals at once.

First, it would create local jobs - from blowing insulation and training energy auditors to installing super-efficient boilers. These jobs would swiftly pay back the original investment by government, since workers would pay both state and federal taxes. There would be an additional multiplier effect as both families and workers had more money to spend. And $1 billion could generate as many as 10,000 jobs in Massachusetts. It would also reinvigorate training and other youth programs such as YouthBuild.

Second, it would improve housing values. We have efficiency stickers on appliances; why not on houses? States should fix this through mandatory disclosure of the likely energy costs - or savings - of any home for sale. An energy audit would thus become a routine part of routine home inspections. Homes with upgraded efficiency would instantly be worth more.

Third, it would increase disposable income for families. Right now the state scrambles every winter to find millions for fuel assistance. Economically this is like burning crumpled dollar bills to keep poor people warm. Morally it holds low- and middle-income families hostage to the profit demands of energy companies. It would make far more sense to invest some of those dollars in permanent change to cut energy use.

Fourth, it would bring new technologies rapidly to scale. Did you know that you can install a one-cylinder co-generation unit - known as the Freewatt system - in your basement that creates hot water, heat, and slices your electric bill?

One homeowner in Somerville insulated his house and dug a 250-foot well in his tiny backyard. He uses the stable temperature of the ground water to heat and cool his house for less than $150 a month. There are many revolutionary technologies ahead, but to bring the unit costs down, you have to push the volume up.

Fifth, it will drive down greenhouse gas emissions. In Massachusetts, approximately 1 million homes burn nearly a billion gallons of heating oil every winter. Cutting emissions from this single sector by 25 percent would lower Massachusetts emissions by at least 1 million tons a year.

Is this really possible? Yes. We need the Patrick administration to set visionary residential energy-efficiency targets, which so far it has failed to do. And we need President-elect Obama to take his two good ideas - investment in infrastructure and green technology - and press them into one.

It will not help American families over the long run if we get to drive down big roads in new cars, only to park them in front of cold houses.

The most fundamental infrastructures for individuals and families are the places we live. We have the ability to create savings that will last for generations while safeguarding our planet.

The question now is whether we can muster the will.

Bob Massie, a former Democratic nominee for lieutenant governor, chaired the Energy Empowerment Rally at Faneuil Hall in November.

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