The “Clean Energy Revolution” could be a game changer, or another missed opportunity for the Black community.
It is hard to miss the urgent calls to do something about global warming. The Paris Agreement, Greta Thunberg, President Biden’s infrastructure legislation—the unusual climate patterns and their destruction serve as a call to action from every corner.
But climate change is not just an urgent issue. It’s also an opportunity to address economic disparity.
This is something that keeps getting missed, from Boston Mayor Michelle Wu to Mass Gov. Charlie Baker to Sen. Ed Markey.
There will be billions if not trillions spent to address aspects of climate change. This could be a game changer, or another missed opportunity for the Black community.
Right-leaning critics have estimated the Green New Deal proposed by Sen. Ed Markey and Rep. Alexandria Ocasio-Cortez to cost $93 trillion. The critics admit the proposed Green New Deal is too vague to price accurately. While President Biden doesn’t endorse the Green New Deal, he has proposed an alternative. Called “A Clean Energy Revolution,” the plan has many of the same goals as the Green New Deal but on a less ambitious time frame and at a lower cost. The Biden plan would involve a federal government investment of $1.7 trillion with a private sector, state, and local buy-in of about $5 trillion.
Morgan Stanley reports, “[Since 2018], we have financed approximately $210 billion toward our goal of $250 billion to support climate-related solutions by 2030.” Banks, insurers, and investors with $130 trillion at their disposal have pledged to put combating climate change at the center of their work.
A $1 trillion market for green bonds has changed Wall Street, according to Forbes. Ford Motor Co. sold $2.5 billion in bonds aimed at benefiting the environment. It’s the largest ever such offering from a US corporation as Ford Motor Co. is transitioning to making electronic vehicles.
Companies can see where the money is: in resolving climate change to preserve the resources that we all rely upon.
The Biden infrastructure bill
Recently brought into law, the Biden infrastructure bill invests $21 billion in environmental remediation. This includes $7.5 billion to build out a national network of EV chargers, $2.5 billion in zero-emission buses and $150 billion to boost clean energy and promote “climate resilience.”
The Biden Build Back Better Bill, which has passed the House of Representatives, includes $320 billion for clean energy tax credits; $105 billion for resilience investments; $110 billion for clean energy technology, manufacturing, and supply chain investments and incentives; and $20 billion for clean energy procurement. A total of $555 billion.
Closer to home, it is estimated that $100 billion in capital expenditure investments will be required to bring approximately 45 gigawatts of offshore wind online in New England by 2050. That amount of offshore wind is the midpoint of the range that economists and policymakers expect we will need to make our New England grid net-zero by 2050. Today, each gigawatt costs between $2 billion and $3 billion, so simple math suggests we will be above the $100 billion mark.
The Baker-Polito administration has filed legislation to invest $750 million in clean energy innovation and workforce development. While the announcement focuses on the “creation of a diverse, equitable and inclusive workforce,” what the proposal misses is helping people of color start, expand, or acquire businesses in the sector so they can get in on the ground floor of this growth industry.
This emphasizes the importance of economic development and creation.
The Cost of Ending Global Climate Change: $300 Billion to $50 Trillion
According to a report from Morgan Stanley, it will cost anywhere from $300 billion to $50 trillion to end global climate change within the next two decades. This is money that will be spent for a good cause. And as much as possible, it should be spent with BIPOC businesses. The state’s cannabis business should not be the only social equity business supported by the state.
Morgan Stanley produced this report to help investors, as they are identifying companies that will benefit from a level of spending in the billions to trillions. The Morgan Stanley report focuses on reducing net carbon emissions to zero, focusing on five areas: renewables, electric vehicles, carbon capture and storage, hydrogen, and biofuels.
There are few Black-owned companies in these areas, which means African Americans won’t be participating in the opportunity to reduce global warming. This is an opportunity to help Black businesses participate in a meaningful way in the green economy.
The government could help Black businesses start or expand businesses in these growth areas. During COVID, the government awarded contracts to businesses that had little or no experience. Emergency declarations meant mayors and governors could and did give out no-bid contracts to businesses that had no prior experience.
The second concern is how the issue is framed. Stopping or reducing global warming is different from achieving environmental justice. The city of Boston has a plan to reduce climate change, achieve carbon neutrality, and reduce sea level erosion related to climate change. What the city does not have is a plan to reduce existing environmental hazards.
Addressing the environmental hazards of Grove Hall
Grove Hall, like many urban areas across America, has numerous existing environmental hazards. Grove Hall has 3% of the city’s geography but 38% of the city’s brownfields. Grove Hall has little tree canopy and lots of hardscapes, contributing to heat islands and stormwater runoff problems. In addition, the exhaust from vehicle traffic contributes to poor air quality.
These are environmental problems Black businesses could fix through brownfield reclamation, building rain gardens and bioswales, installing reflective or solar panels and roof gardens, and other environmental mitigation efforts. But will they get a chance? The history doesn’t portend a bright future.
The city of Boston’s latest commissioned report shows the city spent $2.1 billion over five years and bought only 0.4% of its procured services and products from Black businesses. According to the Supplier Diversity Office report, Massachusetts state agencies spent $4.8 billion in 2020, but Black-owned businesses were awarded only $11 million in state contracts.
On the federal level, there is no evidence that Boston’s minority vendors materially benefited from the $24.3 billion Big Dig project.
As a nonwhite newcomer, it is hard to win existing contracts that require beating incumbents. That is why it is important to capitalize on new opportunities. In the 2014-2015 season, Boston reported 108.6 inches of snow at Boston’s Logan Airport. This required spending $42 million on snow removal services, beyond the $18.5 million the city budgeted. The city of Boston has contracts for individuals to remove snow from sidewalks and parking lots. This would have been an ideal time to hire a minority company or companies to shovel snow and plow, as the skill and equipment required were minimal.
If only 20% of the $42 million went to minority business enterprises, that alone would have almost doubled the city’s procurement from minority businesses. These CORI-friendly jobs could have made a difference in the lives of more than 400 Roxbury residents.
Crisis and opportunity: The division grows
The government spent over $2.5 trillion on the pandemic. This crisis created an opportunity for CIC Health, a white company that did not exist before the pandemic and had no prior experience in healthcare. Not only did it receive a contract from the state for testing, but it was also able to leverage that contract into ones with 14 other states. It would eventually get contacts for doing vacations as well.
If the past is prologue, the city of Boston and the state of Massachusetts will miss another opportunity to help Black businesses participate in the $300 billion to $50 trillion about to be spent on climate change.
The state should create an inventory or directory of every BPIOC company in the environmental cluster in the Commonwealth, discuss their needs in relation to growth, and develop an implementation plan to address the challenges. We have to look at these crises as opportunities to deal with other social and economic challenges. The climate crisis could be the biggest opportunity for economic development for BIPOC businesses or the biggest missed opportunity of the century.
The choice is ours.