A capital idea on climate change

Global praise has been rolling in for Mayor Michael Bloomberg's remarkably encompassing "green" climate agenda and goals for New York's future, which he unveiled on Earth Day.

The plan addresses "the key issues" cities across the globe must face, said JoAnne DiSano, the U.N.'s director of sustainable development, referring to Bloomberg initiatives ranging from congestion-roadway pricing in Manhattan to building 250,000 homes near mass transit to planting a million new trees.

New York previously lacked a single energy focus and lagged behind such green-city contenders as Chicago and San Francisco, Sierra Club President Carl Pope noted last week. But Bloomberg, Pope suggested, has "fixed that and more by laying down the most aggressive change benchmarks on energy of any big city mayor to date."

On May 14-17, New York will host a Large Cities Climate Summit — 30 or more mayors from the world's largest cities, among them London, Paris, Tokyo, Sao Paulo, Moscow and Istanbul, all focused on ways to reduce carbon emissions and reverse global climate change. The gathering couldn't be more timely: With fast-increasing shares of the world's population, the great urban regions are the prime battlegrounds in the struggle for a livable globe.

One positive sign is the cross-section of big-time investment firms and manufacturers scheduled to attend the summit. The monied crowd will be critical because truly massive green-energy investments will be necessary to turn the climate tides.

One mega-capital initiative was hinted at in Bloomberg's sweeping Earth Day announcement. It's to get the owners of today's vast stock of buildings to go green with radical, energy-efficient retrofitting.

New York, for example, has 950,000 buildings, the vast majority privately owned. If those buildings could be more energy efficient, with high-yield furnaces and air conditioners, better-insulated doors and windows and more — the city would reduce its energy consumption, and thus its power demand and emissions, by 16.7 million metric tons of greenhouse gases each year.

"New green buildings help, but basically we need to find a way to upgrade all the buildings on the ground," says Douglas Foy, special energy adviser to Bloomberg and formerly Massachusetts secretary of commonwealth development under then-Gov. Mitt Romney.

Foy and his allies, including the Boston-based Kendall Foundation, have launched a pilot plan to do just that in Cambridge, Mass. The Cambridge Energy Alliance, with initial foundation help, has launched a $100 million "Revolving Fund for Energy Efficiency." Stakeholders include the Cambridge Health Alliance, a local utility, and business and university leaders.

Potential participants include universities, hospitals, schools, stores, apartment houses, even private homes. The revolving fund offers to pay up-front for a building's critical energy-saving improvements. It then recovers its investment through a share of the energy savings that the owner enjoys each month. Perhaps five or six years later the loan is paid off and the owner ends up with a much more energy-efficient, economical building — for essentially little or no initial investment.

"We know the technology's there. The ability to measure results is well developed. It's a mine of opportunity out there, waiting to be developed," said Foy, pointing to the target of "the enormous wealth of capital rolling around in today's world markets." New York, the financial capital of the world, he added, should be the ideal platform to develop the big-time financial instruments needed for a win-win energy future.

The new financing will have to be ingenious — appealing, for example, to landlords who now pass their energy costs on to their tenants and may feel little incentive to participate. But there could be sensible regulatory prods — insisting, for example, on certain energy standards when properties are rehabilitated or change ownership.

Plus, once established in New York, Foy said, the up-front energy financing incentives could spread rapidly across U.S. cities. Few cities come close to New York's astounding rate of 79 percent of greenhouse-gas emissions coming from buildings. But even in this nation of carbon-spewing autos and trucks, at least 48 percent of total energy use, and thus carbon emissions, is due to the energy demand of buildings.

If there's a way to use our capitalist system to finance energy retrofitting across America's building stock, and then perhaps export the financing formulas globally, the chances of a climate survival agenda could brighten dramatically.

Neal Peirce's column appears alternate Mondays on editorial pages of The Times. His e-mail address is nrp@citistates.com