What happens when Washington steps aside and lets bright minds develop solutions in their own backyards? According to U.S. Secretary of Education, Arne Duncan, “virtually the entire country has voluntarily raised expectations for our children.”
That has been the case with the “Race to the Top” education initiative, which provides competitive awards to encourage innovation in education. States and individual schools develop innovative local education solutions and compete for a share of $4 billion from the U.S. Department of Education to implement them. Sometimes a successful idea deserves a repeat, and it could be the case if the success of this initiative is applied to another challenge we face: energy.
Like education, energy is a challenge that requires the hearts and minds of those on the ground, in the states, to put forward policy solutions to make dramatic progress.
The concept is simple: there are innovative, game-changing ideas brewing all over this country and sometimes the best course of action for the government is to set a goal, provide funding to great, local ideas and then move out of the way to let them flourish. A key to the success of the Education Race to the Top is the power held by those at the state and local level who witness, on a daily basis, the obstacles unique to their locality, and are therefore best equipped to design effective solutions.
According to a recent study by the American Council for an Energy-Efficiency Economy (ACEEE), the State Energy Race to the Top proposal would significantly leverage additional capital. In fact, ACEEE’s study shows that every $1 invested in this program returns $8.40 in energy savings. A great investment for the American taxpayer!
The State Energy Race to the Top is a “bottom up” approach that takes the unique energy needs of each state and develops individualized policies to move us closer to the goal of doubling energy productivity by 2030. It is a federal program to support state solutions that would harness what has become commonplace among state and local governments: the power of competition. Proposals would be evaluated based on local improvements in efficiency, so energy efficiency newcomers will be able to compete with those that have already made great strides with efficiency programs.
State initiatives, after all, have produced some of the country’s most remarkable energy success stories. Fifteen years ago, the Texas legislature’s electric deregulation bill sparked a wind energy boom. Texas is not only the largest wind producer in the U.S., it also has more installed wind power capacity than all but five countries worldwide.
State-driven initiatives have also helped Ohio transition much of its manufacturing infrastructure to the clean energy industry. The state now claims almost 10% of all manufacturing jobs related to fuel cells across the nation. In Denver, Colorado the clean tech industry grew 35% and contributed $1 billion in wages in 2011 due to a focused, regional economic development effort.
Because they deliver cleaner air, better health, more reliable electricity and greater consumer control over electric power and costs, programs and policies related to the advancement of smart grid technologies could also be incentivized under a State Energy Race to the Top program.
The Federal Energy Regulatory Commission (FERC) estimates that the installation of smart meters, programmable thermostats and other technologies, along with insulation, Time-Of-Use (TOU) pricing, and full use of potential demand response, could reduce the nation’s peak demand by 150GW by 2020 - this reduction equates to the output of about 2,000 power plants. A number of states and localities are already putting such programs and policies in place– and these efforts would be rewarded and potentially expanded to other cities and states under a Race to the Top Initiative.
A broad coalition of stakeholders, including state energy officials, utility groups, trade associations, businesses, and nonprofits, recognizes the importance of stimulating innovation at the state level, and is actively supporting the State Energy Race to the Top Initiative. They understand that increasing energy efficiency is an effective way to cut costs, create jobs, boost energy security and benefit health and the environment. These groups have seen the power of local innovation, and they know that the benefit of federal funding for energy projects would expand far beyond the communities where it is spent.
The State Energy Race to the Top is not a silver bullet. But it’s a simple, effective, affordable idea that could yield real results for our health, economy and environment. Remarkable energy innovation is happening in all corners of the country. Let’s put that innovation to work and send tax dollars back to the states where home-grown energy solutions can make a dramatic difference.
Holstein is with the Environmental Defense Fund and Phelps is with Knauf Insulation North America.