Published on February 7th, 2009 | by Ramsay Mameesh12
Green Municipal Bonds – Economic Crisis Solved
Think Globally – Act Locally.
Green Municipal Bonds offer the opportunity to rescue the economy and the environment. Local governments are needlessly watching their economies disintegrate, waiting and begging for handouts from Washington D.C., while all along the power to save their economies and help the environment lies in their hands – Green Municipal Bonds.
Traditional Municipal Bonds are debts issued by local governments to pay for schools, hospitals, mass transit, and many other projects that benefit local communities. Citizens vote to approve a bond investment, agree to pay a property or sales tax to fund the bond measure, and the bonds are then sold to investors to raise the capital for the project. Municipal Bonds are very similar to U.S. Government Treasury Bonds. Both offer investors relatively safe investment vehicles with special tax advantages.
Green Municipal Bonds, are similar to their traditional cousins, they offer relatively safe investments with special tax advantages. However, their are several differences that make Green Municipal Bonds far superior for the taxpayer, investor, and issuing local governments.
Here is how Green Municipal Bonds work: Upon voter approval, the municipality creates a quasi-utility, and acts as an intermediary between the residents and utility companies. The municipality then conducts an independent study of the cost, and savings, from implementing Green environmental solutions. If the cost of the project is $1 billion, and the savings is a 15% reduction in consumption, the municipality issues the bonds and splits the savings between the resident, investor, and municipality.
Investors would receive a far superior 6% tax free return on their investment, residents would receive a 6% reduction in their utility bills, the municipality would receive 3% to manage the program with a portion going to their general fund. The local community will have more Green jobs, more discretionary income from lower utility bills, and the municipality will have more funds for police, firefighters, libraries, etc. The cost to the taxpayer? Nothing.
Green Municipal Bonds encourage the full participation of the community, the higher the participation rate, the greater the savings. Municipalities will compete with each other, to achieve greater degrees of conservation, in order to offer the highest rates on their bonds to attract investors. Cities will be covered with solar panels, wind turbines, gray water systems, weatherizing and more. Residents will gladly receive Green Technologies installed on their properties at no cost, lowering their utility bills, and increasing their property values. This is America, so property owners who decline to participate in the Green Program, do not receive the savings on their utility bills.
It has become increasingly apparent that the federal government is incapable of solving our current economic and environmental crises. A plan already exists, that will create 25 million Green Jobs and reduce the federal budget deficit by $100 billion per year. However, this plan is dependent on the federal government shifting its spending priorities away from wars and prisons, and massively investing instead in a green infrastructure. The sums proposed by the Obama administration for Green investments, are too small to make a real difference in job creation, let alone transform the nation and economy.
Green Municipal Bonds on a national scale, will create millions of local green jobs, provide billions of dollars for the private green sector, greatly reduce national carbon emissions, lead to innovation and technological advances important for our economic future, help fund important non-green local services, provide investors with a safe high rate of return, and much much more. It is finally time for the phrase “Think Globally Act Locally” to become a reality. The power to save your community and the planet lies in your hands.
Photo Credit: bkusler under a Creative Commons License.