Economy Watch – California Incentivizes Green Rooftops
Gov. Arnold Schwarzenegger was busy over the weekend signing off on policies that could have an impact on green real estate development. Among other things, he signed a memorandum of understanding with U.S. Secretary of the Interior Ken Salazar to expedite the siting of California renewable energy projects, thus making California the first state to do so. The memorandum commits the federal government to work with California to review and approve renewable energy applications in the state.
The Governor also signed AB 920 into law, which will offer incentives to both households and businesses to add rooftop solar power systems. Namely, it requires utilities to pay households and businesses for any surplus electricity they produce and contribute to the power grid. Previously, the surplus earned private generators nothing, and served as something of a disincentive to generate any surplus at all.
As California goes, so goes the nation? Perhaps. Many observers believe that hard economic times might have slowed green building initiatives–all building initiatives have slowed down, after all–but hardly stopped the movement.
“Green building techniques will continue to be important to the developers that are still developing properties,” Bill Di Santo, president of Schiller Park, Ill.-based Englewood Construction, told CPE. “But they need to be strategized so that they accomplish the goal of sustainability while also conforming to the budget constraints.”
How Big is Too Big?
“Too big to fail” is a stock phrase that’s been popular since certain very large companies either failed or came so close to failing last year that the market was scared silly. But is there some kind of technical, quantifiable definition of when an organization poses systemic risk by being too big?
Maybe not. Oliver E. Williamson, one of the winner’s of the 2009 Nobel Prize in Economics, said regarding that very question at a news conference on Monday that “there is no instant answer that I or any of my students or any of my colleagues would be prepared to advance on that.”
Williamson, who is a professor emeritus at the University of Califorina, Berkeley, shared the prize with Elinor Ostrom of Indiana University, Bloomington. He spent his career focusing on the economics of corporate organization, and she the management of “the commons”–that is, natural resources that are common property.
Is It Really Over?
More than 80 percent of the 44 economic prognosticators surveyed recently by the National Association of Business Economics said that the U.S. economic recovery is already under way. That’s the good news. The less-than-good news is that they anticipate something less than a V-shaped recovery: 2.9 percent in the second half of this year, only 3 percent for all of 2010.
The survey also posited that the downturn in housing is just about over as well, and that 2010 will actually be a growth year for the housing industry–something it hasn’t seen in three years. That too counts as good news. Other less-than-good news, however, is that the economists surveyed don’t believe that the jobs lost during the recession will be back until 2012 at least.
Still, NABE President-Elect Lynn Reaser sounded an optimistic note in a statement released on Monday: “This deep and long recession appears to be over and, with improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation.”
Wall Street, which didn’t have a day off on Monday to reflect on the deeds of Admiral Columbus, couldn’t quite make up its mind on which way to go. The indices were up early, but down in the afternoon. In the end, the Dow Jones Industrial Average eked out a 20.86-point gain, or 0.21 percent, and the S&P 500 was up 0.4 percent. The Nasdaq ended down a minuscule 0.01 percent.
