The idea of "green banks"—public lending institutions designed to help finance private clean energy projects—has been around for a while, but states have recently begun establishing their own versions. With the federal government slow to innovate in the sector, state officials are hoping to provide crucial support for clean energy and spur economic growth. But to work, green banks require a rethinking of the nature of the private-public relationship.
A panel discussion at the Yale School of Management on April 9, 2014, provided a comprehensive look at green banks in general and the nation’s two first state-level green banks, in Connecticut and New York. The discussion focused on the challenges facing states looking for ways to spur clean energy adoption within their borders at a time when the old subsidy-based system is being called into question. Green banks take their cues from the private sector, leveraging public money to help companies raise the private money needed to fund new solar and wind projects, as well as programs aimed at improving energy efficiency.
In this excerpt, leaders in the green bank space discuss both the promises and limitations of the model. The panelists were Daniel Esty LAW ’86, Hillhouse Professor of Environmental Law and Policy at the Yale School of Forestry & Environmental Studies and former commissioner of the Connecticut Department of Energy and Environmental Protection; Richard Kauffman ’83, chairman of New York State Energy Research and Development Authority; and Catherine Smith ’83, commissioner of the Connecticut Department of Economics and Community Development.