economy. By taking a technology-oriented approach, the United States and other nations can create new industries and jobs, save consumers money, and greatly reduce GHG emissions. Many of these new technologies and jobs will come from small businesses since small businesses tend to be more innovative and entrepreneurial than large "Fortune 500" companies. An innovation-led strategy for achieving the target adopted in Kyoto can produce a net increase in jobs by improving energy productivity, reducing expenditures on oil imports, and expanding sectors of the economy that result in the most employment per dollar of expenditure. A study conducted by ACEEE along with four other public interest organizations, called Energy Innovations, shows that the US can reduce its carbon dioxide emissions 10 percent below 1990 levels by the year 2010, while boosting economic performance. The Energy Innovations study found that by following an innovation path, the economy would support 800,000 additional jobs by 2010 compared to business-as-usual growth in the economy. Consumers would realize net savings of $530 per household per year by 2010 due to energy bill savings exceeding the cost of energy efficiency and renewable energy measures. Other studies, such as report prepared by five national laboratories for the U.S. Department of Energy titled Scenarios of U.S. Carbon Reductions reached a similar conclusion as Energy Innovations namely that it is possible to greatly reduce our GHG emissions without harming the economy if the emphasis is on a technological response rather than onerous taxes that depress economic growth. - It is important to keep these results (and competing claims of economic losses) in perspective. In an economy that creates 250,000 new jobs per month, the job gains forecast by Energy Innovations amount to a little less than one-half of one percent of baseline employment forecast for 2010. Also, it important to recognize that there will be some shift in employment within the economy as a whole. Job gains in technology manufacturing, construction, and services will be partially offset by lower employment in the fossil fuel and utility industries. Steps should be taken to ensure that displaced workers are retrained and given employment opportunities in the growing energy efficiency and renewable energy industries. Note that these results are based on achieving emission reductions entirely through domestic action in the energy sector. The U.S. can and should plan to achieve a substantial majority of the emission reductions called for in the Kyoto Protocol through domestic action. Nonetheless, the additional flexibility built into the Kyoto Protocol ensures that marginal emission control costs will remain low, even if some approaches are not as successful as we expect. If it is possible to greatly reduce GHG emissions with net economic benefits, it is fair to ask why some studies claim that reducing GHG emissions will harm our economy. First it should be noted that many of these studies are funded by producers and major consumers of the fossil fuels that cause global warming. Second, the studies use worst case assumptions that lead to loss of economic output, such as imposition of a carbon tax without recycling the revenue, no consideration of technological response or the cost savings from energy efficiency improvements, no economic benefits from pollution abatement, and no international joint implementation. The studies are thoroughly critiqued in a recent World Resources Institute report by Repetto and Austin titled The Costs of Climate Protection: A Guide for the Perplexed. Putting economic modeling aside, history tells us that every time we have faced an environmental challenge--from getting the lead out of gasoline, to protecting the ozone layer, to controlling acid rain--there have been those in affected businesses that have said that it won't work and it will wreck the economy. They have never been right. In fact, once the decision was made, each time industry rose to the challenge and American ingenuity found ways to address these problems cheaper and faster than had been anticipated. To take one example, industry predicted that controlling acid rain would cost as much as $1500 per ton of sulfur removed. Sulfur allowances are now trading at about $100 per ton--less than one-tenth the prior estimate. Reducing Greenhouse Gas Emissions Provides Economic Growth Opportunities for A shift away from fossil fuels such as coal and petroleum and towards greater energy efficiency and renewable energy technologies presents enormous opportunities for small and medium-size businesses to grow and thrive. These businesses can manufacture, sell, and install energy-efficient appliances, lighting products, control systems, solar and wind power systems, advanced industrial processes, etc. Farmers can grow bioenergy crops and operate bioenergy facilities as well as produce food. Home builders can construct more efficient, higher value-added buildings, thereby increasing their revenues. And insulation and HVAC contractors can increase their business as they make our existing homes and commercial buildings more energy-efficient. All of this means more output and revenues for small and medium-size businesses, and less output and revenue for the Exxon's and Commonwealth Edison's of the world. I would like to present some real world examples of small and medium-size businesses that are already profiting and growing by serving energy efficiency and renewable energy markets, or installing state-of-the-art industrial process equipment in their own operations. AstraLite AstraLite, based in Annandale, NJ, is a division of Computer Power, Inc. In the words of Les Listwa, one of its senior staff, Computer Power was a dying business five years ago since it was unable to compete with large manufacturers of inverters and uninterruptible power supplies. In 1993, Computer Power formed the AstraLite AstroPower Inc. AstroPower, based in Newark, DE, is the second largest U.S.-owned manufacturer of Bergey Windpower Co. Bergey Windpower Co. of Norman, OK was founded in 1977 and is currently the world's leading supplier of small wind turbines. BWC wind turbines have been installed in all 50 states and more than 80 countries. The company employs 25 workers and has annual revenues over $4 million, compared to $1.5 million five years ago. Earlier this year BWC established a Chinese joint venture to better serve this fast growing market for its products. Broin and Associates, Inc. Broin and Associates of Sioux Falls, SD builds medium-size fuel ethanol plants throughout the Midwest. These plants produce fuel ethanol and cattle feed using corn or milo as the feedstock. All of the plants are either cooperatively owned by farmers or co-owned by Broin and farmers. Broin and Associates currently employ and manage over 150 workers, up from about 50 workers four years ago. The company is profitable and growing. Comfortex, Inc. Comfortex, based in Cohoes and Watervliet, NY, manufactures energy-efficient insulating window treatments. Their window shades more then double the insulating value of a typical double pane window. Comfortex started out in 1990. They now have about 400 employees with plants in New York, Arizona, Florida, Nevada, and Pennsylvania. Sales of the insulating shades are increasing about 20-30 percent per year. The company got help in developing its window insulation technology from the New York State Energy Research and Development Authority (NYSERDA). Decatur Foundry, Inc. Decatur Foundry, located in Decatur, IL, produces iron castings for motor and pump components. Decatur has invested in new infrared heating equipment and computerized controls which enabled it to significantly cut energy use, reduce pollutant emissions, increase output and productivity, and create a safer workplace. Annual sales revenue grew from about $6 million to $10 million after these investments were made, with employment growing to 75 workers. Decatur received help from the Electric Power Research Institute and its local utility in implementing these innovations. It is participating in the U.S. EPA Climate Wise program. A. Finkl and Sons Co. A. Finkl and Sons, located in Chicago, is a large custom die steel forger. The company has $80 million in revenues and 400 employees. Finkl was a thriving company in the 60s and 70s, but like many Midwestern iron and steel companies was hit hard by the recession of the early 1980s. Finkl responded by making capital improvements including installing state-of-the-art energy-efficient furnaces, computerized controls, and maximizing reuse of solid waste. As a result, Finkl has bounced back and is now one of the most efficient companies in its business. It is producing twice what it did in the early 70s, while consuming 60% less energy per pound of output. Southwall Technologies Southwall Technologies, based in Palo Alto, Ca, specializes in making low-emissivity coatings and films that are used in energy-efficient windows. Southwall developed its initial products with financial and technical support from the U.S. Department of Energy and Lawrence Berkeley National Laboratory. The company now has 250 employees and production facilities in California and Tempe, AZ. Sales revenue grew from $18 million in 1993 to $50 million in 1997. Trigen Energy Corp. Trigen, based in White Plains, New York, owns and operates cogeneration facilities and district heating and cooling systems in 22 locations throughout North America. For example, Trigen purchased the old district heating system in downtown St. Louis and is upgrading and expanding it. New customers served by the system include the Trans World Dome and the Morgan Street Brewery. By generating electricity and using the "waste heat" for supplying heating and cooling to buildings, Trigen greatly reduces fuel use and pollutant emissions while helping to revive urban core areas. The company has grown rapidly in the past decade, with 760 employees today compared to 200 in 1992. These are not isolated examples -- there are thousands of small and medium-size businesses that are manufacturing, selling, or using energy efficiency and renewable energy technologies and, in doing so, are profiting from reducing GHG emissions and helping to slow global warming. The lesson from these examples is that by encouraging technological innovation, we can address the threat posed by global climate change while growing the economy and strengthening our nation's small businesses. It is also important to note that international markets for energy efficiency and renewable energy technologies are expanding very rapidly. For example, worldwide windpower capacity tripled, solar photovoltaic cells shipments more than doubled, and compact fluorescent lamp sales increased by over a factor of 2.5 between 1992 and 1997. Some of the small businesses mentioned above, such as Bergey Windpower and Southwall Technologies, are thriving in large part because of exports. Promoting greater energy efficiency and renewable energy in the United States will help our companies prosper and better compete internationally. Federal Programs Help Small Businesses Cut GHG Emissions Profitably. Small businesses are usually not able carry out R&D on their own. They often lack technical expertise or dedicated energy and environmental managers. They often do not have information on or access to the latest energy efficiency and pollution prevention technologies. Nor are they well-equipped to compete in international markets. A variety of federal programs are helping small businesses overcome these barriers and develop and implement state-of-the-art energy efficiency and renewable energy technologies. These programs are saving businesses and consumers money while cutting pollution of all types. And they are helping small businesses access international markets. These programs include: EPA Energy Star and Green Lights programs The Energy Star and Green Lights programs are assisting thousands of small DOE Industrial Assessment Centers program The Industrial Assessment Centers are located at 30 universities throughout the |