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January 19, 2013
Cuomo Proposes $1 Billion Green Bank for New York
by Robert Kropp
The bank will leverage public funds with private sector investment to hasten the transition to a
clean economy and environment in New York State.
SocialFunds.com --
In his 2013 State
of the State address, Governor Andrew Cuomo proposed that New York create a $1 billion Green
Bank, which would leverage public funds with private sector investment to drive the transition to a
low-carbon economy in the state.
Currently, 80% of $1.4 billion spent
yearly on renewable energy and energy efficiency is provided by one-time subsidies; yet, the
address states, New York "is far from realizing its clean energy goals."
"The NY Green
Bank would overcome a number of obstacles and uncertainties in the clean energy sector," the
address continued, "including unstable federal funding and policy, uncoordinated action and
disparate one-time subsidies at the state level, a lack of appropriate financial instruments, and
apprehension in the investor community."
The benefits of a Green Bank would include the
following:
1. Hasten the transition to a clean economy and environment in New York State
by lowering capital costs and bringing green energy to scale.
2. Lower consumer prices for
renewable and efficient energy sources.
3. Bring well-paying jobs to New York State that
support employment across skill and education levels.
4. Build an integrated state approach to
clean energy investment and innovation.
5. Hold taxpayers harmless while encouraging more
vibrant private market activity in clean energy.
6. Making the exchange of information and
capital more fluid in the clean energy market.
According to a 2012 report, the establishment by states
of green banks can "combine scarce public resources with private sector funds and then leverage
those funds to invest in attractive clean energy and energy efficiency projects."
In
2011, Connecticut established the Clean Energy Finance and Investment Authority (CEFIA), a green
bank which, according to the Brookings
Institute, is "a quasi-public corporation into which are combined existing state clean energy
and energy efficiency funds so as to permit private investment in the bank and enable the new
entity to make loans and leverage its capital with private capital."
"A number of states
are now exploring a variety of ways to leverage scarce public resources with sophisticated banking
and finance mechanisms," the Institute stated.
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