Lawrence McCullough: Making consumers’ green choices pay off for everyone

Is it possible the U.S. economy can successfully transition to a clean energy foundation without top-down legislative reform effort from Congress?

Three market-based approaches would seed and speed the process at the local, micro-economic level and lay groundwork for far-reaching effects in U.S. energy policy:

1. Suspend for three years all local and state sales taxes on purchases of “green” products and services that help individuals and businesses attain more environmentally responsible decisions and lifestyles.

For sustainability to become an integral part of the average American’s lifestyle — as automatic as popping into the nearest convenience store for milk and a pack of batteries — consumers must feel adequately informed about green products and able to buy them on a daily basis. The mystery and perceived complexity of buying green must be eliminated.

There are presently tens of thousands of green products that promote sustainability and thousands of American-owned/based companies involved in making and selling them. This growing but still tentative segment of the U.S. economy would receive a tremendous boost if sales taxes on green products and services were suspended for a trial three-year period, just long enough for the notion of buying green to take firm root in consumer consciousness and become a habit instead of a luxury.

Nationally in 2018, general state and local sales taxes accounted for $391.4 billion (28% of total U.S. state tax revenue); the cumulative effect of a nationwide buying green sales tax moratorium would provide a massive, rejuvenating impact throughout the Main Street economy.

Any revenue loss would be partially offset when consumers put money saved from green purchases back into the economy by purchasing non-green items, thereby generating sales tax from these ancillary purchases and offering additional revenue to retail and wholesale businesses.

It would instill immediate and ongoing financial incentive for tens of millions of consumers to buy more green products and services more often. The additional tens of billions of dollars in sales would benefit large and small retailers from Walmart to the corner dollar store, while encouraging manufacturers and service employers throughout the country to confidently commit to developing sustainable sector jobs.

Those most concerned about market competition sovereignty would be pleased: The green sales tax moratorium would rely on a stable supply-and-demand fulcrum to spur economic growth without direct industry subsidy or “corporate welfare.” Clean energy businesses embracing innovation and genuine usefulness would be the winners — as decided by consumers.

2) Create automatic federal green tax deductions with green purchases.

Any federal tax rebate rewarding clean energy investment should be simple and straightforward: every green dollar an individual or business spends equals an equivalent number of Green Points, whether the purchase is energy-efficient HVAC equipment for an office building, a hybrid automobile or a pouch of organic dog food.

Accumulated Green Points translate via direct formula into pro-rated tax deductions on individual and business federal tax returns. Tracking Green Points could be done by means of bank or credit cards. Absent sophisticated accounting software, taxpayers interested in taking advantage of the program would score Green Points the way they tally current deductions — saving and adding receipts.

Federal green tax deductions would prove valuable to businesses, especially the much-beleaguered financial services sector. Banks could offer special Green Points savings accounts, investment firms special portfolios highlighting clean tech mutual funds while recirculating money through the active market economy.

Current state and federal tax credits, loan programs and incentives for purchasing clean energy technology should remain in place and would continue to benefit those able to meet their requirements. But a broad-based federal tax deduction system predicated upon everyday green purchases would heighten Americans’ awareness of sustainability issues and enable taxpayers to play a significant role in reshaping the economy.

3) Have all U.S. consumer utility companies contribute a percentage of their annual net revenue to a Local Clean Energy Fund.

Virtually all of the nation’s more than 3,300 utility companies are to some degree addressing sustainability by encouraging conservation and clean energy research through grants, weatherization programs, bill assistance and education outreach.

The Local Clean Energy Fund would be paid directly to the community and be administered by its local governing unit. No competitive grants, no sporadic initiatives, no product giveaways — just a steady flow of immediately usable dollars into a dedicated municipal fund implementing public clean energy projects: solar panels, building retrofits, public transportation, improved walkways and bicycle paths, green job training, whatever makes most the economic sense for a particular locality.

The LCEF would stimulate local jobs, civic improvements and increased public visibility for the concept of sustainability and emphasize how utilities play a leading role in crafting energy solutions, not problems.

Increasing numbers of industry executives are beginning to grasp this concept of paying forward. According to the Washington, D.C.-based Business Council for Sustainable Energy, investment in America’s renewable energy industry exceeded $64 billion in 2018, an 11% increase from the year before.

Some might view the LCEF as a backdoor corporate tax. Rather, it is a shrewd corporate investment strategy. By channeling money straight into community infrastructure development, utility companies bolster the economic health of the communities from which they draw profit today and tomorrow …. communities in every part of the United States.

There is no denying that money is at the heart of contemporary American politics and policy-making. It is also the prime engine of our nation’s economy. The challenge is to utilize the power and leverage of money to transcend dysfunctional political culture and unfocused corporate vision hamstringing the nation’s transition to a clean and profitable energy economy.

Implementing these three proposals would have the potential to put into active play hundreds of billions of dollars touching every economic sector, including foreign trade. Dollars that would allow tens of millions of Americans to build a stable clean energy economy from the ground up. Dollars that would bring renewed value to The American Dollar at home and abroad.

The true Greening of America may not start in the voting booth but at the hardware store.

Pittsburgh resident Lawrence McCullough is a clean energy advocate and former press director of the Hall Institute of Public Policy.