As economic stimulus moves back onto the table, why not consider zero cost opportunities to create jobs, opportunities that would reduce lung diseases, and greenhouse gas emissions as a side effect? Create a federal agency with authority to issue federal infrastructure bonds, perhaps an infrastructure bank. Attach conditions that this authority can only finance projects with revenue streams that would fully pay back the cost of issuing those bonds, including principle, interest, transaction costs, and a risk premium.

Example: One barrier to lowering emissions is that consumers and businesses will tolerate almost no upfront costs to save energy in buildings. In residences this is starting to be overcome by offering no-down payment loans where charges are added to utility bills or property taxes.These are often attached as liens which can be passed along when the building is sold. In some cases these are structured as pay-as-you-save systems [pdf], where payments are owed by the occupant, not the owner [1]. Tariffs are transferred to the new occupant when the current tenant vacates. Unlike loans, these are equally attractive to owner-occupants and renters. And unlike even the most heavily subsidized loans, pay-as-you-save tariffs don’t reduce the ability to borrow for other purposes. This may well be an opportunity to profitably invest hundreds of billions a year for at least a decade at zero or even negative net cost.

Example: Freight trains are both more energy efficient and less expensive per ton-mile than trucks in moving freight. However, most high value freight moves by truck because trucks are faster and more reliable. Thus, trucks are more cost effective than trains for a large percent of shipping, even if the dollar price per ton-mile is higher. An investment in the hundreds of billions could improve heavy rail infrastructure to the point where it would be both fast and reliable enough that 85 percent of the ton-miles currently moved by long-haul trucks could be shipped by rail [pdf] [2]. Trucks would be used mainly for moving freight to and from rail freight yards, and down lightly traveled routes. The cost of massively improving rail infrastructure would probably generate a very favorable direct dollar return, even before social benefits like reductions in pollution and lung ailments were considered. But private industry is unlikely to generate hundreds of billions for what amounts to a single large investment in a short period of time.

These are only two of the opportunities out there to create jobs, improve health and reduce greenhouse gases at zero cost. (In fact given reduced unemployment, and increased tax collections, the net effect would be a slight deficit reduction.) No, this type of opportunity by itself won’t make the reductions we need to solve the climate crisis. But adding a provision to allow this would strengthen any climate bill. For that matter it would make a good standalone job creation bill. Perhaps Sen. Bernie Sanders (I-Vt.) should consider adding it to his 10,000 solar roof initiative. Or Sen. Maria Cantwell (D-Wash.) should consider adding it to the Cantwell-Collins bill. No great complexity would be required, because such a provision would not outline specific projects. Instead it would combine borrowing authority with a stringent review process to ensure that projects financed had a sound revenue stream to pay back all funds borrowed. It would be good policy and good politics.

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[1]On bill (utility tariff financing) currently being experimented with in New Hampshire and Hawaii.

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Katherine Johnson et al., “Breaking Down the Barriers to Efficiency Improvements in The Rental Housing Market: A Comparison of Two Utility Approaches(pdf)”, Pay-As-You-Go, 2009 International Energy Program Evaluation Conference (Portland, Ore.: International Energy Program, 3009), , 583-94.

Financing via property taxes is available in Berkeley, Calif.; Palm Desert, Calif.; Sonoma County, Calif.; Boulder County, Colo.; and Babylon, N.Y.

Renewable and Appropriate Energy Lab, Resources | Renewable and Appropriate Energy Laboratory. PACE Resources, Jan. 2010, Renewable and Appropriate Energy Lab,University of California, Berkeley, 31/Jan/2010.

[2] Drake et al., Evaluating the Creation of a Parallel Non-Oil Transportation System in an Oil Constrained Future [pdf]. Jan. 2008, pp 1-18, Millenium Institute, 31/Jan/2010