The 1,000 lb. Elephant in the Room - Capital vs. Operational Budgets
Writing from the 2009 ACUPCC Climate Leadership Summit - William C. Johnson, Vice President, Haley & Aldrich Inc and Board Member at Second Nature discusses the challenge of budgeting for the long-term.
The ACUPCC signatories are arduously working to create robust, visionary climate action plans to meet the lofty goal of climate neutrality and yet there is a structural anomaly in their financial systems that may work against them. The inability to realize operational savings by smart planning and implementation of great ideas and technology to be applied to the capital funding side of the equation is a systemic issue in higher education that needs to be addressed. In order for life cycle cost analysis or total cost of ownership type analysis to be made the financial system needs to be able to transfer funds from one side to the other. The money needs to be able to follow the idea and pay for it, thereby encouraging long-range decision-making.
What if some of the national higher education associations that exert influence through their membership were to convene a summit to thoroughly analyze this issue and develop policy recommendations on capital versus operational funding? Recent reports (see below) from the Union of Concerned Scientist, McKinsey & Company, and The American Council for an Energy-Efficient Economy all outline that investment in energy efficiency is the surest way to create jobs and to reduce GHG emissions. With this in mind, higher education by integrating capital and operational budgets can accelerate and demonstrate the following benefits; long-term and efficient planning, increased health and productivity from high performance buildings, reduced operational costs, and the eventual neutralizing of GHG emissions. In regard to energy efficiency, President Bill Clinton put it this way, "...all this work out there is laying on the ground, begging to be done with an absolute certain high return. I am anxious to speed this up. For all the good you’re doing, we should be doing three, four, five, 10 times what we’re doing as a country.”
Let’s begin aligning our climate commitments with sustainable decision-making processes and accelerate higher education’s leadership for a more sustainable future.
The Union of Concerned Scientists (UCS) recently released
Climate 2030: A National Blueprint for a Clean Energy Economy , a peer-reviewed study showing that the United States can dramatically cut global warming pollution while saving households and businesses in every region of the nation billions of dollars in energy costs.
McKinsey & Company recently released
Unlocking energy efficiency in the U.S. economy
Unlocking energy efficiency in the U.S. will require a comprehensive strategy. Overcoming barriers, including the $ 520 billion in upfront investment, could save $ 1.2 trillion and cut consumption 23% by 2020.
The American Council for an Energy-Efficient Economy (ACEE) recently released
The Positive Economics of Climate Change Policies: What the Historical Evidence Can Tell Us
