When it comes to clean energy manufacturing, Wisconsin is not messing around.
In August 2009, Gov. Jim Doyle announced that Wisconsin would dedicate all $55 million of the State Energy Program funding it would receive through the American Recovery and Reinvestment Act (ARRA) to clean energy manufacturing: “Wisconsin is the only state to target its SEP funds exclusively to manufacturing. Wisconsin has a larger percentage of employees in manufacturing than any other state, and we can leverage our innovative, high-skilled workforce to create clean energy products and processes.”
Then, in his January State of the State address, the governor announced the creation of the Wisconsin Green to Gold Fund, a $100 million revolving loan fund to help manufacturers move into clean energy production or improve their energy efficiency. “This is not some pie in the sky,” Doyle said in the State of the State. “Anyone who says there aren’t jobs in the clean energy economy had better open their eyes.”
State Rep. Cory Mason agrees. Wisconsin has lost 13 percent of its manufacturing jobs during the current recession, and Mason’s district has been particularly hard hit. “In Racine, we have nearly 17 percent unemployment right now,” Mason said. “We’re in a position where 20 years ago, three quarters of the jobs were in manufacturing; now it’s down to roughly one quarter. So if we can create a program that will help businesses reduce their energy costs, become more competitive, and put people back to work in the process, it’s a win-win for everyone.”
On March 25, Mason introduced legislation that authorizes the Green to Gold Fund. According to the Wisconsin Department of Commerce, which will administer the fund, the initial capital will come from a combination of existing State Energy Program dollars Wisconsin received through ARRA, future Wisconsin Energy Independence Funding (funding currently administered by the Department of Commerce that goes toward clean energy manufacturing and research and development), and by streamlining existing resources.
Wisconsin will also be well positioned to receive additional federal funding if U.S. Sen. Sherrod Brown’s Investments for Manufacturing Progress and Clean Technologies (IMPACT) Act is adopted. The IMPACT Act would authorize $30 billion to establish state-level revolving loan funds – similar to the Green to Gold Fund – to help small and medium-sized manufacturers retrain workers and retool facilities for clean energy production. It requires states to contribute 20 percent of the federal grant amount, a provision Wisconsin should be poised to comply with.
Provisions identical to those in the IMPACT Act were included in the American Clean Energy and Security Act (ACES) passed by the U.S. House of Representatives in June 2009, and a coalition of businesses, labor and environmental groups is pushing to include IMPACT in the soon-to-be-introduced Senate climate and clean energy bill.
Rep. Mason’s Green to Gold bill would authorize the Wisconsin Department of Commerce to issue loans to manufacturing businesses for any of the following activities: implementing energy efficiency measures in their facilities; retooling to manufacture products that support the green economy; expanding or establishing domestic clean energy manufacturing; or creating or retaining jobs engaged in the preceding activities.
“I hear from manufacturers in my district and around the state who say they would love to have a more efficient boiler or they’d love to make wind turbine parts, but they don’t have the start-up capital” said Mason. “They can’t just take the money they’re using to run their plant and use it for something else. Right now financing is tight. The Green to Gold Fund is going to fill that need.”
In addition to laying out the activities the Commerce Department can provide loans for, the bill requires the department to develop rules for the program that include clear job-creation standards for loan recipients and minimum energy savings requirements. Work paid for with loan proceeds would need to be performed by contractors or subcontractors who pay the prevailing wage.
Wisconsin has already had success in creating clean energy jobs. According to a June 2009 analysis by the Pew Charitable Trusts, Wisconsin had more than 15,000 clean energy jobs in 2007 and nearly 1,300 clean energy businesses. These numbers have likely increased since 2007, thanks in part to implementation of the state’s Renewable Portfolio Standard. Another study, by the Political Economy Research Institute and Center for American Progress, found that Wisconsin could see a net increase of 35,000 jobs if a major federal investment were made in the national clean energy economy along the lines of the spending commitments outlined in ACES combined with ARRA’s clean energy provisions.
The state is also implementing a separate $1.75 million pilot project being coordinated by the Wisconsin Manufacturing Extension Program (WMEP). The pilot project will identify 50 small manufacturers, assess their strengths and weaknesses in terms of sustainability practices, and help them implement sustainability measures that reduce the companies’ costs and their impact on the environment.
“We’re going to build a proof point out of this to demonstrate that small and mid-sized manufacturers can relatively quickly achieve higher sustainability,” said Lee Swindall, director of marketing at WMEP. “Our ultimate objective is to make Wisconsin the most sustainable manufacturing state in the nation, and this pilot is intended to prove that we can do that.”
Swindall says the pilot program will target more than energy efficiency improvements. WMEP and its partners will assess participating companies’ policies in such areas as energy use, transportation logistics, manufacturing operations, packaging practices, environmental remediation and supply chain issues. The program will not provide funding for capital investments, but it will help companies connect with other potential funding sources that could help them move toward sustainable profitability.
Manufacturers may still apply to participate in the pilot program, but assessments of companies that have applied are already in progress. Swindall expects all 50 participating companies to have their sustainability implementation plans underway by the end of 2010.
As environmental advocates around the country await Senate action on a clean energy and climate bill and labor unions grow increasingly concerned by reports of clean energy manufacturers moving their facilities from the U.S. to China, Wisconsin may have developed an approach capable of appeasing both constituencies, not to mention the manufacturers that will benefit from Green to Gold financing.
“Wisconsin has a long history of manufacturing strength, and we are increasingly attracting manufacturing companies in the new, clean energy economy,” said Rosemary Wehnes of the Sierra Club, who sits on the steering committee of the Wisconsin Apollo Alliance, which brings together labor, business, environmental and community groups to advocate for clean energy and good jobs. “This initiative will help us realize the potential of clean energy for Wisconsin. Investing in companies that want to improve their energy efficiency or retool to make clean energy products just makes sense, both for the economy and for the Wisconsin workers they will hire. We’re happy the governor is proposing this, and encouraged that Rep. Mason is taking it one step further to make sure the jobs this initiative will create are good, family-supporting jobs.”