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The Incubators

By Douglas Fischer, Daily Climate editor

Call them the Silicon Valley garages of climate policy.

Local efforts to trim emissions, change economies and alter behavior are serving as idea labs where mistakes can be made and novel approaches honed in preparation for setting national climate and energy policy.

These ideas can have a powerful influence in the climate debate, say policy experts: Within the recently released climate bill are many lessons learned in these local laboratories. And as discussion in Congress intensifies, many lawmakers will find themselves pushed by proponents of these municipal efforts to extend their reach to the national stage.

"There's no doubt cities are the place where all these things are being tried," said Julia Parzan, coordinator of the Urban Sustainability Directors Network, a group of civic leaders dedicated to sharing the experiences of various municipal sustainable development efforts.

"And when they're hitting walls, they're going for (changes in) state policy and federal policy."

Exhibit A is the firestorm of revisions to municipal codes and state laws concerning how residential renewable energy and energy efficiency projects are financed.

It started in the spring of 2007, when staffers for the City of Berkeley, Calif., were casting about for a way to make roof-top solar affordable for a typical homeowner.

The ah-ha moment came as Cisco DeVries, then the top aide to Mayor Tom Bates, was untangling some knots in a neighborhood's push to establish an underground utilities district, where homeowners agree to taxes on their properties to bury electric wires and cables.

If homeowners could diffuse the high costs of burying utility lines, DeVries reasoned, they should have the opportunity to do the same for the high up-front costs of putting solar panels on their roofs.

And so a new financing scheme was born. Berkeley pioneered the so-called Property Assessed Clean Energy program, where residents pay for household renewable energy and efficiency improvements over 20 years via a special tax or assessment on their property tax bills.

The idea took off like a brush fire.

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DeVries left city government shortly thereafter. He helped launch Renewable Funding in 2008 in Oakland, Calif. with one other person. Today it a major player in the development of municipal clean-energy financing, with 50 employees and offices in six states. It is helping 240 local governments set up similar programs. Twenty states have amended their laws to facilitate such programs: Missouri last week, Minnesota last month; Florida is in the finishing stages.

"There are lots of ideas — good, bad and indifferent — and they never get any traction," said DeVries, who is president of the company. "But then there are moments when a window opens, and those moments are very powerful."

Only a local government could have given this idea wings, he added. "Nobody else spends their days in the mundane world of land-secured financing districts."

New England offers another example of a regional program shaping national policy.

In 2009 ten states agreed to cap their emissions and created the nation's first greenhouse-gas-emissions trading program. It auctioned allowances, created a carbon market and to date has sent $582 million into the coffers of participating states.

But before this started, the only example of a carbon cap-and-trade program was Europe's, which had seen wild price swings and windfall profits for utilities. The stability of the Regional Greenhouse Gas Initiative, as New England's cap-and-trade program is known, silenced those critics and placed it in the foreground of the national discussion on how to run these policies," said Tom Tietenberg, emeritus professor of economics at Colby College in Maine.

"It's been one of the primary reasons auctions are now prominently part of the (climate) bill." Politicians, he added, have no problem spotting RGGI's revenue. "It reduces the negative impact of a carbon bill."

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Of course, there are tensions: RGGI has strong regional support in part because it funnels cash back to state coffers. While some states have siphoned that revenue to patch deficits, others - such as Maine - have used it to make significant gains in energy efficiency, far outpacing federal efforts.

But the Senate climate bill as drafted voids regional emissions schemes like RGGI and state efforts like California's. That has raised hackles from local leaders who want to retain control over their own programs and revenue.

City Hall cannot be the sole driver of policy and innovation, even the staunchest local proponents caution. Many municipalities are worried about street lights and police pay. They don't have the resources to map out a comprehensive climate or energy policy.

"The towns that do have really moved the ball," said Kevin McCarty, managing director of the U.S. Conference of Mayors. But "many cities are in budget crises. They just don't have the time and money."

Denver makes a good case study.

Last summer the Conference lauded the best climate-protection efforts from the nation's cities. The Denver metro area took top honors for an ambitious program, dubbed FasTracks, to expand light rail and encourage smart growth.

And the plan was ambitious: Voters in an eight-county region had agreed in 2004 to a 12-year plan, dubbed Fastracks. It would add 119 miles of light- and commuter rail, open 31 new park-n-ride lots, build 57 new transit stations, expand bus service, redevelop downtown Denver and the land around 51 of the 57 new stops toward transit-oriented housing and businesses. To pay the $4.7 billion price tag, voters OK'd a 0.4 percent sales tax hike.

Then the recession hit. Project estimates understated the cost by half. Overly rosy projections made the tax hike inadequate to cover costs. Regional consensus is in danger of fragmenting as municipalities bicker over trimming costs and raising money. The Regional Transportation District needs an additional 0.4 percent sales tax jump to complete the project by 2017.

"What has happened to the FasTracks program from a financial standpoint is not unique," said Scott Reed, the Transportation District's assistant general manager for public affairs. "The entire nation is seeing that same type of financial challenge."

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But local politicians say they get it. They feel a greater sense of urgency than their national counterparts. And they're closer to both the impacts of climate change and the economics of energy reform.

Speaking in Copenhagen during the United Nations climate talks last year, Melbourne Mayor Robert Doyle described the chaos that paralyzed his government as wildfires licked the city's outskirts during the Southern Hemisphere's summer in January, 2009. "If those conditions are what my city is going to have to deal with (in a warmer world), my city is not ready," he said.

Former Seattle Mayor Greg Nickels got more than 1,000 U.S. mayors to commit to acting on climate change, a movement that has pushed governors and in turn federal lawmakers facilitate those local efforts. He was with Doyle in Copenhagen to lobby for a global accord. "We at the local level have too much to lose," he said then. "We will go further, and we will make it safe (for politicians) to go further."

Back outside Denver, Littleton Mayor Doug Clark didn't pay too much attention to Copenhagen. He's not a part of Nickels' coalition. Nor is he watching the Senate climate talks in D.C. But he sure is looking at his community's bottom-line energy costs.

Clark represents a conservative town of 41,000, mostly commuters, south of Denver. Like many of his voters, he is not so sure he believes this "climate warming stuff."

In March, the Littleton City Council voted against spending $107,807 to match a federal grant to put solar atop the town's nature center. "It didn't make economic sense," he said.

But Clark likes light-rail. And he's in favor of pushing forward on FasTracks, despite the ballooning costs.

"Some of this stuff makes sense to do just because it's the rational thing to do," he said. "Reducing fuel consumption, switching to cleaner fuels - all that stuff is common-sense smart stuff to do regardless of where you come down on global climate change."

"We don't want to wait for the feds."

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