Thursday, November 24, 2011

Green Deal vs. Maine PACE?

The UK government's housing energy retrofit scheme, long awaited, was unveiled today, and the Guardian has three separate articles, here, here, and here. This is a home loan scheme in which the retrofits are supposed to be audited and managed so that the cost of the retrofit loan is less than the current cost of utility bills. This is doable anywhere, given the high prices of heating fuels, but is probably a tad easier in the UK than the US because of higher natural gas prices.

Job creation, in other words, for Sustainable Energy Management students.

Here in Maine we have a similar scheme in place called PACE, which stands for Property Assessed Clean Energy, and there are others in the US.

The possibility for a serious case comparison will therefore shortly come into being. I already have way too many degrees, but a good case comparison of these two countries' approaches to PACE-type loans would make a great master's or PhD thesis.

The obvious role of a scheme like this as Keynesian stimulus, assuming the proper scale of uptake, would also make an interesting study. The British are notorious homebodies, and as a general rule dislike having strangers in their home, especially repairmen, and so there may be some rather non-linear and threshold effects in the demand curve for take-up.

One interesting factor, post-Thatcher, is that the dearth of proper apprentice and community-college schemes for training the required electricians, plumbers and builders, combined with the general fall in favor of working with one's hands, has meant that in recent years the UK has imported tradesmen wholesale from eastern Europe.

This wave of handy immigrants has slowed recently as the economy has also slowed in Britain, and some have already made their grubstake and returned home to Lublin or Danzig, presumably to enjoy a happy retirement, with the proper amounts of pickled herring and sausage.

(So much for Solidarność.)

One obvious result, if the new scheme hits the proper scale, will be to reopen the floodgates. But fixing a tap doesn't necessarily require one to perform a full-on energy audit, use a computer, fill out complicated government forms, essentially negotiating a mortgage for the householder with the government, and so on, all in a foreign language. And these post-Soviet volumes of available handymen were likely just that -- a one-time only endowment of trained repairmen left over from the command-and-control era, now aging and stiffening. Have younger eastern Europeans abandoned the trades in the same way that young Britons and Americans have? A good question, to which I don't know the answer, but on which the success of this scheme may rest.

Even if they haven't, there are obviously huge barriers in language and training to be overcome here, to reduce the market friction and speed the uptake.

I do hope that the coalition has begun to lose its distaste for building government. This is one job that needs doing, but it needs to be done well, and there are obvious needs in education and training, as well as in bureaucracy and oversight.

No comments: