Social change work is hard and frustrating and wonderful and terrible; it is also, at times, funny, quirky and just plain fascinating. With this blog we hope to capture all that goes into what we do at Capital Good Fund, and we invite you to join the conversation!

Sunday, November 4, 2012

The DoubleGreen Loan and Superstorm Sandy

I decided to start Capital Good Fund (CGF) in response to the 2008 financial collapse because I feel that, in the face of calamity, it is far better to take action than to lament.  From day one--indeed, from the time I moved to Providence, RI for a masters program in environmental studies at Brown--my interest has been the intersection of poverty and the environment (my masters thesis deals with this very topic--you can check it out here).  Why?  Because it turns out that the poor bear the brunt of environmental destruction.  Consider this: low-income Americans spend 17% of their income on energy, compared to 4% for the rest of the population.  This makes them far more vulnerable to energy price volatility.  At the same time, low-income families are more likely to live in neighborhoods with poor indoor and outdoor air quality.  What's more, by virtue of more often living in low-lying areas, they are more vulnerable to the effects of climate change (something Hurricane Katrina clearly demonstrated) and less able to evacuate from and rebuild after a storm.

Unfortunately, for the first couple of years as Executive Director of CGF, I've had to focus my efforts on the more immediate challenges of fundraising, building infrastructure, developing policies and procedures, and so on.  In addition, I've had to accept that just tackling poverty is hard enough without incorporating an environmental justice component.  That said, I never gave up on the idea of using equitable financing in order to tackle poverty and redress environmental degradation.

Several years ago I came up with the DoubleGreen loan concept--a loan designed to help low to moderate-income families save money, go green and build their credit.  Last week I was finally able to bring the concept to life thanks to a unique partnership with National Grid, the main utility company in Rhode Island.  Under the partnership, CGF will offer 0% APR loans of up to $5,000 to moderate-income homeowners to pay for weatherization measures, which on average reduce energy expenditures by 35% and save the homeowner ~$450 per year.  The borrower will make monthly payments of ~$100/month and enjoy a more efficient, comfortable and safe home.  National Grid guarantees CGF the interest on the loan, allowing us to raise loan capital more easily (because we are insulated--pun intended--from losses).

The benefits of weatherization, however, go beyond the walls of the weatherized home.  And this brings me to Superstorm Sandy, a storm that has finally gotten people talking about the climate change crisis several days before an election during which the topic has practically been verboten (meaning 'forbidden'--I couldn't help but use the word!).  For years we have heard that, even if climate change is man-made, it's too costly to address and unlikely to cause as much devastation as predicted by saber-rattling scientists.  If Hurricanes Katrina and Irene weren't enough to dispel that notion, then the $50 billion price tag and widespread devastation in the financial center of the world wrought by Sandy ought to make the naysayers think twice.

Insurance companies, not known for being bastions of liberal thought and practices, are taking climate change very seriously.  The cover story of the most recent edition of Business Week was 'It's Global Warming, Stupid.'  And all across the country people are concerned that if this is the new normal, then perhaps life as we have to live it in many places in America will no longer be normal.  Fortunately, climate change mitigation is a no-brainer, provided that you don't have a vested interest in the status quo (hint hint, coal, oil and related industries).

Think about this: for every dollar invested in our DoubleGreen loan program, "$2.51 in benefits [are returned], including $1.80 in savings on energy bills." (US Dep of Energy)  Weatherization creates jobs for lower-skill Americans--jobs that are upwardly mobile, cannot be outsourced and pay a living wage. Energy efficiency and renewable energy increase property values, family and public health and strengthen the security of the energy system by reducing demand.  Perhaps equally importantly, the money saved on energy can be used on retirement or education savings, or to spend money in the community, further boosting the economy.

In short, the cost of climate change mitigation is high--yes, most likely higher than the cost of cleaning up after climate change related storms and droughts--but the benefits are even greater.  These benefits range from the aforementioned economic development, health and safety reasons, to national security (even the Department of Defense and CIA recognize the link between national security and climate change) and geopolitical security.

When as a nation we decided to enter World War II, build the interstate highway system, put a man on the moon, or create and build out the Internet, we never balked at the cost because we understood the urgency--and benefits--of action.  Until the 1970s, environmental protection was a bipartisan issue (Richard Nixon created the Environmental Protection Agency and signed the Clean Air Act).  Only in the past few decades has the issue become polarized: the notion that protecting the environment is bad for business has been peddled by those with vested interests and perpetuated by the politicians and entitites who depends on the support of those interests.

So the reason I am so excited to launch the DoubleGreen program is that, though it's impact will be infinitesimal relative to the challenges we face, it stands as a bulwark against the notion that we can do nothing about poverty or climate change.  Indeed, I believe that our DoubleGreen loan is a win (energy savings) win (job creation) win (lower carbon emissions) win (improved air quality ).

To learn about how you can invest in the DoubleGreen program, click here or email me at or call me at 401-339-5437.

No comments:

Post a Comment