CCI Demonstrates Important Role for NGOs

(2/19/2009) - The Clinton Climate Initiative (CCI) has announced that it will loan the City of Los Angeles enough money to replace 140,000 existing streetlight fixtures with LED (light-emitting diode) lighting units.  Compared to conventional street lights, LEDs are both longer lasting and (10-12 years vs. 4-6 years) and more energy efficient.  CCI says that L.A. will save at least 40% on its electricity bills, and will save additional money on maintnence and bulb replacements. 

At the announcement, former President Clinton said, "If every city followed the example of Los Angeles and reduced the electricity used by their streetlights by 50 percent, it would be equivalent to eliminating over 2.5 of those coal plants per year."  Though the savings in electricity costs will go to repaying the loan for the first seven years, L.A. is expected to save $10 million annually thereafter. 

Sounds like something every city would want to do, right?  The problem is that the money in city budgets tends to be well spoken for every year, and there isn't free money to make long-term investments, even if they will save money in the long run.  During normal times, many cities are able to acquire private capital via bond sales to fund these types of projects.  Right now, however, its tough for anyone to get a loan.  Even in good times, I'm not sure banks have many incentives to loan cities money for these kinds or projects, especially in circumstances where the difference between a 7% bank loan and the kind of interest-free or low-interest loans an NGO (non-governmental organization) can offer will make a project worthwhile. 

NGOs have become an increasingly powerful presence over the past twenty years, often filling the role traditionally filled by governments.  While I think it would be worthwhile for the Feds to provide low-interest loans or grants to cities to upgrade their lights (for the simple reason that the national government can get a lot lower interest rates than local governments, meaning this would be much more efficient than every local government securing their own loans), I am glad that NGOs are taking up this task.  Preventing global warming is going to take action from every type of human organization, not just government.

(Note: I'll be in NYC over the weekend.  Posting will resume next week.)