Lessons from New York’s phony green bank
On December 19, 2013, New York Governor Andrew Cuomo’s office quietly issued a press release announcing that $210 million in initial funding was being poured into something called the “New York Green Bank.” The governor’s spin doctors insisted that this endeavor was a “bold, new market oriented approach to accelerate clean energy deployment, create jobs, and help make our communities more resilient and sustainable.”
Uh huh. The only genuinely green element of this press release was its recycling of long-discredited arguments that a world full of solar panels and wind turbines would strengthen the economy and boost the environment.
Let’s start with the name. Although referred to as a bank, it is actually a government agency whose funds included $165 million redirected from other New York projects and $45 million thrown in from the Regional Greenhouse Gas Initiative. Without the taxpayers’ money, this project would not exist.
The Green Bank, according to the governor’s press agents, will “partner with private sector institutions by providing financial products such as credit enhancement, loan loss reserves and loan bundling to support securitization and build secondary markets.” But isn’t that supposed to be the exclusive job of the private sector? Is there any reason why the nation’s leading banks – none of which are showing any losses – aren’t actively pursuing these strategies?
Well, there is an excellent reason why the private sector won’t touch this market with its own money: who would want to sink money into this? At the moment, the renewable industry is in limbo because the federal production tax credit program that keeps the U.S. renewable energy world afloat expired at the end of 2013. Without this federal life support, the companies creating so-called clean technologies are unable to sustain themselves, let alone also sustaining a healthier environment.
Furthermore, this market plays almost no significant influence on serving American power needs. According to the U.S. Energy Information Administration, solar energy is responsible for a ridiculously miniscule 0.11 percent of all national electrical power generation – and half of that tiny percentage is based in (where else?) California. Wind energy is somewhat more prevalent, generating 3.46 percent of the nation’s total power, but that comes at significant costs to electric customers (a fact that the folks in Maryland will live with if the proposed offshore wind farm serving their state ever gets built).
As for the green jobs being promised by Cuomo – whatever happened to those green jobs promised by presidential candidate Barack Obama in 2008? It is astonishing that this old lie is still being trotted out, when the past few years showed zero evidence that the renewable energy world can create lucrative employment opportunities.
The Cuomo press release also enjoyed a quote attributed to Richard Kauffman, chairman of Energy & Finance for New York State, which represents a new low in double-talk. “The Green Bank is just one component of the State’s new chapter on energy policy that focuses on enabling self-sustaining private markets and reducing dependence on subsidies,” says Kauffman.
Really? So, let’s get this straight: a “bank” that is really a government agency is inventing “self-sustaining private markets” that no private institution would build and is “reducing dependence on subsidies” by spending $210 million in taxpayer money?
This effort is so patently phony that I wouldn’t be surprised if the New York Green Bank started soliciting bids on a certain bridge in Brooklyn.
Hall is a former senior editor at Solar Industry Magazine and the publisher/editor of Business-Superstar.com.