The financial response to events in 2008, was viewed as inadequate by many for lacking enough support for the financial industry. Analysts are urging the government to not only focus on the short-term measures, but also consider resilient, long-term investment plans.
Alex Kragie, Director of the Coalition for Green Capital, explains that this push is supported by large margins of the American public as well. Kragie highlights a new survey by the Coalition for Green Capital explaining that after the United States overcomes the coronavirus, a strong bipartisan majority of voters will support investment in clean energy and transportation projects to put people back to work. By a 71-to-16 margin, Americans support funding for such projects that would create jobs and combat climate change.
Some industry leaders believe infrastructure banks like the National Climate Bank, should be funded in any further stimulus measures to enable funding of private sector projects and the reinvestment of loan payments for other projects in the future. The states of New York, Connecticut, and Michigan all have similar bank systems and have seen success in applying this process, with these banks causing $3.7 billion in investment since 2011. The Green Bank of Connecticut is acquiring funds with a private bank to develop solar systems and improve energy efficiency for low-income properties. As a result of the program, solar uptake in low-income households has increased by over 180%, and in excess of 800 low-income properties have joined the solar movement.
The slashing of Federal Reserve interest rates and the increased pressure on existing markets has created an ideal opportunity to focus on developing the infrastructure required to deliver a clean, sustainable, and resilient future. In order for this to happen, the current low borrowing rates need to be combined with increased lending towards infrastructure.
“With the challenges to our economy from COVID-19, economic stimulus must be targeted to benefit those least able to afford a disruption in income or extreme energy bills. By making large energy infrastructure investments, including zero net energy and highly efficient affordable housing, we can support a broad and steep recovery. I am thrilled to be joining the DC Green Bank to support the Mayor’s and the Council’s clean energy vision for DC – one that benefits all residents of DC while reducing our contributions to climate change,” said Eli Hopson, incoming CEO of the D.C. Green Bank.
In the past, the U.S. has taken a cautious approach toward long term infrastructure plans, while China has focused on accelerating its investment plans, and as a result, is now a global market leader. The U.S. has the opportunity to start placing money directly into infrastructure and focus on supporting green services. In the current situation, the U.S. could finance more solar and wind projects, because capital costs are considerably lower than usual, and having credit available for these projects will be a vital piece of a recovery from the current crisis.
What is very clear, our economy is very exposed to the volatility associated with fossil fuels. At present, the cost of renewable energy development and the replacement of fossil fuel systems are the lowest we have ever experienced. We are facing unprecedented times, but there is a silver lining for the clean energy market. The U.S. should take this moment to ensure we utilize the options that we have been presented within these challenging times.