Is There a Place in the World for Green Banks?

A report from the Green Bank Academy in Washington, DC, by WCTA President Tom Ranken.  The Green Bank Academy was hosted by the Coalition for Green Capital.

Washington, DC, February 7, 2014 –During the past two days, I have been in a conference investigating the role of green banks. Professionals from Connecticut, New York, Minnesota, Massachusetts, Maryland, California, Hawaii, Kentucky, Illinois, and Washington gathered together to consider the role of green banks in their states and nationwide. The event was hosted by the DC based Coalition for Green Capital.

The term “green” in “green banks” refers not to the environment, but rather to the green of currency. That is, of course, only partially true.

While it is true that climate change is the motivator of many in this movement, it was stipulated almost immediately that the goal must be broader to succeed. Dan Esty, a key leader of Connecticut’s first in the nation green bank, told the group that “the goal must be cheaper cleaner, more reliable energy.” Blue states focus on cleaner energy, red states focus on cheaper. Most often, it was implied, these objectives are not in conflict.  Success in public policy initiatives will be achieved when both of these goals can be attained.

In fact, it was consistently acknowledged, the need is to move from an economic model where cleantech requires subsidization to a new model in which financing is based on economic merit.

Is there a need to create a green bank in Washington State?  The work in Connecticut, in particular, is impressive.  They have spent over a year building their systems and are now financing new activity.

In our state–in what seems to be a typical model for us–we have a large number of entities and programs that are parts of what would be considered to be a green bank in other states.  These include efforts implemented by the Governor, Legislature, and the Department of Commerce in the past year.  The green bank challenge for us is to figure out where gaps in funding exist–and then fix them.

If cleantech is defined exclusively as solar, wind, and other alternative energy sources, the market today is limited, but growing.  If it is defined more broadly, which makes more sense, it includes energy efficiency, storage systems, grid enhancements, and a multitude of energy sources.  For that, the market is huge.

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