Inspiring Ideas Green Muncipal Bonds

Published on February 7th, 2009 | by Ramsay Mameesh

12

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.

See Also:
10 Green Jobs for 10 Years
Stimulus Package and a Smart Grid?

Photo Credit: bkusler under a Creative Commons License.





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About the Author

When Ramsay Mameesh is not writing for The Inspired Economist, he is trying to save the world, by getting people to retire. Ramsay Mameesh holds B.S., appropriately named, degrees in Business, Marketing and Economics. He has over ten years of corporate bank marketing experience, as well as start-up, and small business experience. Ramsay Mameesh lives in San Francisco, CA., with his wife and fish. Neither one is called Wanda. I knew you'd ask.



12 Responses to Green Municipal Bonds – Economic Crisis Solved

  1. Dan D. says:

    I wonder if there is an excessive amount of pessimism about the economy and the job loss. Without a doubt the economy is in a very tenuous position but isn’t now the time to believe in our inherent ability to overcome, survive, and thrive?

    Instead of wasting too much time figuring out where blame lies (analysis of past mistakes is necessary to a degree) lets spend time developing solutions for ourselves and perhaps more help the people around us.

    Now is a time to tighten our belts and push forward believing in our inherent ability to succeed.

    http://www.weeklypoint.com/2009/02/06/are-job-losses-accelerating/

  2. Dan D. says:

    I wonder if there is an excessive amount of pessimism about the economy and the job loss. Without a doubt the economy is in a very tenuous position but isn’t now the time to believe in our inherent ability to overcome, survive, and thrive?

    Instead of wasting too much time figuring out where blame lies (analysis of past mistakes is necessary to a degree) lets spend time developing solutions for ourselves and perhaps more help the people around us.

    Now is a time to tighten our belts and push forward believing in our inherent ability to succeed.

    http://www.weeklypoint.com/2009/02/06/are-job-losses-accelerating/

  3. This topic has been gaining traction of late, as it keeps the process local, has the greatest impact on the municipality, keeps the federal government out of the picture, and allows investors to make a statement as to how they spend their dollars.

    It’s surprising that this method of issuing bonds has not taken off yet – it’s how we build all sorts of infrastructure projects and green initiatives provide payback to investors and society as a whole – on a global basis.

  4. This topic has been gaining traction of late, as it keeps the process local, has the greatest impact on the municipality, keeps the federal government out of the picture, and allows investors to make a statement as to how they spend their dollars.

    It’s surprising that this method of issuing bonds has not taken off yet – it’s how we build all sorts of infrastructure projects and green initiatives provide payback to investors and society as a whole – on a global basis.

  5. Lloyd Taft says:

    Having been, before the deluge, an architect for high end residences I am very familiar with solar, geothermal, and a variety of other current technologies which have been affordable only to the upper echelon of home builders due to their cost. This is exactly the type of program which will finally bring the savings down to the people who need them most.

    I don’t expect that the industrial utilities really see this as a threat, but they should. Local generation, be it solar, minihydro, wind, etc. should be our focus. The Pickens wind project requires a smart grid and huge investments by big players and federal government resulting in a system which still gets energy from Texas and sells it in Oregon or Maine. Energy savings from local generation requires many smaller investments by communities and property owners, and should be offset by tax credits and local incentive. This is how Obama raised his money for the campaign, why not be the way out of our energy dependences as well.

    The main obstacle as I see it is that this is not a corporate structure that business is used to, but that might be why is makes so much sense.

  6. Lloyd Taft says:

    Having been, before the deluge, an architect for high end residences I am very familiar with solar, geothermal, and a variety of other current technologies which have been affordable only to the upper echelon of home builders due to their cost. This is exactly the type of program which will finally bring the savings down to the people who need them most.

    I don’t expect that the industrial utilities really see this as a threat, but they should. Local generation, be it solar, minihydro, wind, etc. should be our focus. The Pickens wind project requires a smart grid and huge investments by big players and federal government resulting in a system which still gets energy from Texas and sells it in Oregon or Maine. Energy savings from local generation requires many smaller investments by communities and property owners, and should be offset by tax credits and local incentive. This is how Obama raised his money for the campaign, why not be the way out of our energy dependences as well.

    The main obstacle as I see it is that this is not a corporate structure that business is used to, but that might be why is makes so much sense.

  7. Pingback: GREEN MUNICIPAL BONDS | MunicipalBond.org

  8. Pingback: My del.icio.us bookmarks for February 22nd through February 23rd | called2account

  9. russ says:

    Depends on what type of projects are utilized.

    I, for one, do not presently consider residential solar PV cells or residential wind to be whatsoever practical or efficient. Commercially yes but on home roof tops not at all.

    Most likely the residential units will generally be in a state of disrepair not too long after installation and useless. Commercially they will be taken care of and worthwhile.

    We will see in 5 or 10 years what the items mentioned above contribute to the overall energy scheme.

    Residential solar hot water (water heater augmentation) is a positive thing. Insulation and sealing of homes is a positive thing at present and deserve investment.

  10. russ says:

    Depends on what type of projects are utilized.

    I, for one, do not presently consider residential solar PV cells or residential wind to be whatsoever practical or efficient. Commercially yes but on home roof tops not at all.

    Most likely the residential units will generally be in a state of disrepair not too long after installation and useless. Commercially they will be taken care of and worthwhile.

    We will see in 5 or 10 years what the items mentioned above contribute to the overall energy scheme.

    Residential solar hot water (water heater augmentation) is a positive thing. Insulation and sealing of homes is a positive thing at present and deserve investment.

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