Job Creation: Three Things Government Can Do

Three Simple Things Government Can Do to Create Jobs Governing Sustainability Summit New York City – June 21, 2011 Elton B. Sherwin Sr. Managing Director Ridgewood Capital Author of The Silicon Valley Way andThese slides express the opinions of the author and Addicted to Energyhave not been endorsed by any organization or government agency

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

Thought experiment Old Town Green Town 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?

Why Does “Green Town” Have More Jobs?

Shift Spending from Utility Bills toConstruction and Retail = New Jobs

Improving Building Efficiency = Jobs

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

Green Town Green Town: Is richer Has more jobsSmarter place to buy real-estate Better place to raise children

Upgrading Building Efficiency Creates Jobs Not happening at scaleHouston Skyline

Really Hard to Motivate Action Even on projects that save money

How Do We Motivate Private Investment?

I Would Like to: Grade every building A+ to D- Based on their actual energy consumption Post the grade above the front door D+ C+ B- D- C+ D- D- C+ B- D- B A-Grades for illustration only, not based on real measurements

In Some Cities the “D” Buildings Use More Than Half the Electricity Just motivating them to upgrade to a C would be a big win D+ C+ B- D- C+ D- D- C+ B- D- B A-Grades for illustration only, not based on real measurements

Lets talk about realisticallywhat can be done. 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

Winning Strategy New York and San Francisco Required to calculate ENERGY STAR score High = 100 Low = 1 After two years: Public disclosureNew York, San Francisco, Washington DC, Seattle, and the State of California all use the same rating tool: US EPA Portfolio Manager

An example 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

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.

What Can Your City/State Do?1. Disclose ENERGY STAR ratings – Government buildings – Schools – Contests2. Copy San Francisco or NYC Regulation – Straightforward – Requires all commercial buildings to calculate Energy Star score – In year 2: disclose it on the city website3. Celebrate buildings scoring 90+

Celebrate SuccessNew York City• 111 Offices• Five Banks• Four K-12• Two Hotels• One Hospital• One CourthouseTwo built in 1800’s• 49 before WW II http://www.energystar.gov/index.cfm?fuseaction=labeled_buildings.locator

Palo Alto, CA Celebrate SuccessBuilt in 1966• Lots of exposed glass in a sunny climate• Property Manger: CB Richard Ellis 525 University Ave. Palo Alto, CA 87 94 94 92 2007 2008 2009 2010

East Palo Alto, CA 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 University Circle • Property Manger: East Palo Alto, CA Wells Real Estate85 86 92 902007 2008 2009 2011

Every City and State Should Be Able to Do This1. Disclose ENERGY STAR ratings – Government buildings – Schools – Contests2. Copy San Francisco or NYC Regulation – Straightforward – Requires all commercial buildings to calculate Energy Star score – In year 2: disclose it on the city website3. Celebrate buildings scoring 90+

Sherwin’s Law “When performance is graded performance improves. When grades are published, the rate of improvement accelerates.”Phrasing adapted from Thomas S. A Monson

National Target• Above 60: all existing buildings• Above 80: all new buildings vs. 2003 average ENERGY STAR score

Three Simple Things You Can Do to Create Jobs1. Disclose ENERGY STAR ratings – Government buildings – Schools – Contests2. Copy San Francisco or NYC Regulation – Straightforward – Requires all commercial buildings to calculate Energy Star score – In year 2: disclose it on the city website3. Celebrate buildings scoring 90+

Questions and Answers with Back-up Slides

Question: Take another minute to connect building efficiency with jobs.

An example 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

Over One Million Jobs Just in CaliforniaAccelerating 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.

ReferencesJob 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.

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/R ebuildingAmerica_Vision_Statement_FINAL.pdf

Question: Are buildingsrequired to upgrade if they score poorly? Answer: No

And Senior Care Facilities and Data Centers

ReferencesENERGY 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)

Question: Where can we find a list and map of Energy Star buildings? Answer: On the EPA website

EPA Website Available TodayNew York City• 111 Offices• Five Banks• Four K-12• Two Hotels• One Hospital• One CourthouseTwo built in 1800’s• 49 before WW II http://www.energystar.gov/index.cfm?fuseaction=labeled_buildings.locator

Afterwards, a question in the hallway:Question: My city won’t force building owners to discloseanything. What should we do?

Check the EPA Websitehttp://www.energystar.gov/index.cfm?fuseaction=labeled_buildings.locator

Focus on the Winning Buildings1. Disclose ENERGY STAR ratings – Government buildings – Schools – Contests2. Copy San Francisco or NYC Regulation – Straightforward – Requires all commercial buildings to calculate Energy Star score – In year 2: disclose it on the city website3. Celebrate buildings scoring 90+

Question: What aboutresidential buildings?

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.

Use Signage Laws to Ban Advertising Without Disclosure Energy Saving Green Home (Data not disclosed) Require • Last 2 yrs utility bills • Next 3 yrs

A For the Brave 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-

Send Window Stickers to the Top Performing BuildingsPosting is optional 97 C+ Internet disclosure and window stickers will create a lot of jobs

Translating Building Percentiles and ENERGY STAR scores to Grades

Letter to a fictional governor • 70 recommendations for state policy • Job creation Previous Book • Creating new products • Creating new companiesThese slides: www.EltonSherwin.com and on slideshare

Job Creation: Three Things Government Can Do

by Elton Sherwin on Jun 20, 2011

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