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Week of 3.28.08

Transcript: Save Energy, Save Money, Save the Planet

BRANCACCIO: We are all thinking... and worrying these days about how to stop Global Warming. On this program we've examined ethanol and other new fuel sources. We've looked at big public policy issues. But here we ask you to consider if there's a path forward that's faster, simpler, and an easier sell politically. Cambridge Massachusetts wants to become a national model for retrofitting America's buildings. It would save way more energy than you ever thought. Karla Murthy produced our report.

BRANCACCIO: On a wintry morning, this snowy path leads to an old house that'll soon be state of the art.

MAGAVI: Hi.

BRANCACCIO: How do you do? I'm David.

MAGAVI: Nice to meet you...

BRANCACCIO: Zeyneb Magavi is in the middle of a down-to-the-studs renovation of this two-family home she bought in Cambridge, Massachusettes. Check it out: it's not the usual fix 'er up project.

BRANCACCIO: So above us in the ceiling of the first floor is what more—what is that, insulation?

MAGAVI: It is insulation. It's ground up blue jeans.

BRANCACCIO: Oh.

MAGAVI: It's also totally harmless. It was easy to install. I did that installation.

BRANCACCIO: So it's not just blue jeans. It looks like somebody's blouse. And a nice little red t-shirt.

MAGAVI: Yeah, it's recycled cotton.

BRANCACCIO: And look at these lights. This is a cool light fixture. What are we looking at here?

MAGAVI: That's an LED down light. It's a brand new item. We had to convince the electrical supply house to order it. And these things will stay on for 20 or 30 years before you have to change a bulb.

BRANCACCIO: Notice a theme here? Zeyneb is turning this more than 80 year old classic Cambridge home into a green home...as energy efficient and as non-toxic as she can get it.

BRANCACCIO: Like for instance, you take a look at this wall. And you give—

MAGAVI: Don't push it, don't push it!

BRANCACCIO: Serious insulation is a good first step for keeping the New England weather out. Zeyneb found a product that is way more effective than typical insulation—it is also non-toxic.

MAGAVI: I had my kids in here playing with it when it was wet. It was like kind of like silly putty. It's the exact same components as concrete but with air in it. A huge amount of air to the point and here let me give you a piece to crush. 'Cause that's part of the fun.

BRANCACCIO: Oh —here's a little piece of this stuff. It's very light. And it turns almost to a kind of flour as you—as you touch it. And it smells like absolutely nothing. But that new more eco-friendly insulation was a lot more expensive to install than the standard pink fiberglass stuff.

MAGAVI: Then again, you have to think about what expensive is. 'Cause if you don't insulate really well, you're paying in heat. And heating a place like this, every month, with gas prices rising, you have to calculate at what point the expense is paid off.

BRANCACCIO: By installing these energy efficient features—she expects to cut her utility costs by at least 50%. She's figuring it will make selling the first floor unit that much easier—even in a down housing market.

MAGAVI: First of all, it's—there's the ethical aspect. It's the right thing to do and support. There's also a—a comfort level You don't have drafts. You know, it's very comfortable. And also, it's just gonna cost so little to live here. It's going to be very, very, very, very efficient. And beautiful.

BRANCACCIO: Makes sense. So why isn't every one running out to retrofit their homes with all these green features—especially at a time when Global Warming is on the minds of so many? Well, the paradox is, you need a lot of energy to be energy efficient... Zeyneb Magavi, mother of two young children, has taken it upon herself to become a green building guru. She took a course at nearby Harvard. She's spent hours on the internet doing research on products and telephoning suppliers. And there is the money thing. While saving energy saves money in the long run, not everyone in Cambridge has the extra upfront cash to buy and install the highest-efficiency stuff.

But some folks in Cambridge think they have a solution.

DONOVAN: It's possible to do; it's affordable to do; it's simple; and it's easy and that we can all get there together.

BRANCACCIO: Deborah Donavan works for an innovative group called the Cambridge Energy Alliance. It's a non profit and they want to help every resident, business and institution in the city conserve energy. The project is just ramping up, but already politicians are behind this bold new experiment. If it takes off, it could create a lot of new jobs while saving money and the planet.

DONOVAN: We don't have to wait for new technology. We don't have to wait for—new regulation. We don't have to wait for a new international treaty. We can do this now.

SIANI: So what we found originally when we walked down...

BRANCACCIO: Here's how it works. You invite them in to take a look around your house or business. The experts then crunch the data and come back with ways to save 15 to 30% on heating, gas, water, electricity. But it doesn't stop there. The alliance can then fix you up with a loan to pay for the upgrades. And that loan should pay for itself with the predicted energy savings. If it works—if—the project could be a model for the entire country.

HEALY: Cambridge has always viewed itself as a little bit ahead of the curve.

BRANCACCIO: Robert Healy is the city manager of Cambridge. He's been at this job since 1981. He says the CEA was born out of an earlier effort to reduce the city's carbon footprint.

HEALY: Back, actually in the—late '90s, the city—had set a goal to reduce its emissions. Well, the great thing about goals, is it's easier to set than implement.

BRANCACCIO: Cambridge is one of the greenest cities in the country: there's lots of recycling. The city is replacing it's traffic lights with energy-sipping LED's, and a quarter of its residents walk to work. But still, the city wasn't getting much closer to its conservation goals. One of the problems was that they weren't targeting the biggest chunk of their Global Warming gases. Turns out the biggest offenders are not car or truck tailpipes. 80% of the Carbon Dioxide produced to keep Cambridge—and many cities—going, comes from buildings. Heating, cooling, running buildings.

HEALY: Instead of achieving our goal, we were seeing that energy utilization was, in fact, increasing. So, just the normal, "change the light bulb" kind of approach wasn't going to work.

BRANCACCIO: The city needed help. So they went to see Rob Pratt at the Kendall Foundation in Boston, a place that develops new strategies to reduce greenhouse gases.

PRATT: We had a delegation who came from the city and said, "We're not making it, what do we do?" And we started talking about the fact that, well, we really need to start thinking about going big.

BRANCACCIO: Before Rob Pratt came to the Kendall Foundation—he worked at some big energy projects—like building this wind farm in Costa Rica. But instead of investing in just renewable energy projects like wind or hydro power—Pratt's prescription for Cambridge was to stop wasting so much energy.

PRATT: This is the most cost-effective thing that you can do to reduce greenhouse gas emissions. Bar none. I've been in energy for thirty years. Done renewal energy projects, traditional energy projects, and energy efficiency. This is #1.

BRANCACCIO: Pratt says the great thing about energy efficiency projects is that you can do them very fast. You don't need to wait for land permits to build a wind farm—or wait to develop a new bio fuel. Technology exists now. Plus there's the money factor. It wouldn't be politically popular to jack up gas or oil prices in an effort to make people use less fossil fuel. Efficiency projects can pay for themselves in saved energy. It may be logical, but what it's not is all that sexy.

PRATT: One of the things that's a difficultly with energy efficiency is it's kind of fundamentally boring. Photovoltaic cells. Solar cells. Or wind turbines are much more interesting to people. And so—

BRANCACCIO: Yeah. I mean, it's not all that interesting to put up weather stripping.

PRATT: Exactly. Exactly. So what we realized, from some of our past experiences, that we gotta make the project interesting and big.

BRANCACCIO: Pratt and the Kendall Foundation proposed a crash program on a scale that's never been done before. They would create an energy efficiency project that would reach out to each and every business and resident in Cambridge.

PRATT: We can really show that this is the best way for people to stabilize their energy prices. 'Cause this is not just to save the world. It's also to save money on your—your energy bill. And—and we will do that.

BRANCACCIO: And how did Robert Healy react to this grand plan?

HEALY: I first said, "How much money do you need from the city?" And Rob Pratt said none.

BRANCACCIO: Is that a good answer?

HEALY: That's a very good answer. And I said, "I think we got a program."

BRANCACCIO: The Cambridge Energy Alliance is made up of city officials, energy experts and the Kendall Foundation. They're not just promoting efficiency projects—but also renewable energy like solar power. Their goal is to cut the city's carbon output by 10% in just five years. That's like taking 33,000 cars off the road. The program is in it's final planning phase...but this laundromat dry cleaning business is one of the CEA's pilot projects. Patricia Birchem and her husband Mark are the owners of Kirkland Cleaners. You can just imagine the utility bills at a place with this many machines chugging away. So the CEA's plan—to save money—was a welcome proposition.

PATRICIA BIRCHEM: I was so excited because my costs for my water, for my electric and for my gas are exorbitant every month because I have so many washers and driers that are going, you know, six and seven days a week. So anything I can do to help to bring down my expenses is—in my mind a win.

PROCELL: Patricia, hi. I'm Adam Procell with DMJM Harris, a contractor for from Cambridge Energy Alliance.

BRANCACCIO: The alliance has partnered with different companies to do energy audits. Today, they're looking for where Kirkland Cleaners wastes the most.

PASCIUTO: One of the first issues we're going to look at is the replacement washers and dryers.

BRANCACCIO: They check out how efficient her machines are...and go down to the basement to see how her old boiler is doing.

PATRICIA BIRCHEM: I'm definitely receptive to making some changes. So—and I wouldn't—probably would not make 'em unless I had some—a professional organization actually analyzing everything for me because it's beyond my scope.

BRANCACCIO: Patricia had already done a few things around the shop. She got some incentives from the electric company—NStar—to put in energy saving lights. She wanted to do more, but couldn't find the time.

PATRICIA BIRCHEM: I could have probably done it, you know, piecemeal and maybe gone to the water department and the electric department and the gas department. But too big of a project for me when I'm trying to run a business.

PATRICIA BIRCHEM: Patricia: I'm looking forward to that proposal. Thanks for coming.

PROCELL: Thanks for showing us around.

BRANCACCIO: The energy alliance will come back soon with their recommendations. But they'll also come back with a financing plan. They've been working with banks, like east Cambridge savings, to make low interest loans available to pay for the installation. Yes, there is a loan to pay back... but if they've got the math right, the utility bills should be lower enough to make up for paying off the loan. A few years down the road, when the loan is paid off, Kirkland Cleaners will get to keep all the energy savings. Ten days have gone by, and the energy auditors are back at Kirkland Cleaners with the results.

IMMERMAN: So, first and foremost, we looked at your energy use.

BRANCACCIO: A place like this does use a lot of resources .... $7,200 a year on electricity, $12,000 for natural gas...and check out the water.

IMMERMAN: This is the corker. This one surprised me. Average water consumption over the last three years is 438,000 gallons. That's an—an—a water use of almost—just over $28,000 in water.

PATRICIA BIRCHEM: That's a lot.

IMMERMAN: Okay, not death and taxes, folks. That's a big number.

PATRICIA BIRCHEM: That's a big number.

BRANCACCIO: They hand the Birchems a specific plan to bring that number down...simple stuff like automatic switches to kill the lights when the sun's out. But the big line item: replacing old washing machines with high-efficiency front-loaders. Throw in a low-flow toilet and the improvements will cost about $23,000, but they'll save about $4,200 a year in their utility bills.

IMMERMAN: A lot of what stops business owners from doing this, is that you know, the—the cash out the door in order to put them in. You know it's the right thing. You know that your customers are gonna appreciate that you're doing your best for the environment. But it's still a business expense. So, you have to weigh it against every other business expense.

BRANCACCIO: If the Birchems choose, they can apply for one of those low interest loans. With the estimated energy savings, it'll take about seven years to pay off the $23,000 efficiency upgrade and break even.

DONOVAN: Just to give you a sense this is the amount of paper work that you will have to do for the loan process.

PATRICIA BIRCHEM: That's it? Are you responsible for this?

DONOVAN: We've spent a lot of time trying to make this as simple...

PATRICIA BIRCHEM: Deborah, this is a beautiful document. I'm serious about that.

PATRICIA BIRCHEM: It could be that we, Kirkland cleaners, my husband and I can finance that ourselves but if not how nice it is to be able to have a bank, you know, that we can go to that's already, you know, that's working with the alliance we'll be key for us.

MARK BIRCHEM: You saw that they'd already done the work about getting the financial application down to a single page. There's some forethought there. It's not in a pile of documents this thick that we need to go through and have triple ratified. It's as simple as can be. So I feel really good about it.

BRANCACCIO: After the installation—the Energy Alliance will follow-up with Kirkland Cleaners and track the savings to ensure the program is working.

PATRICIA BIRCHEM: It's not just the money, it's also trying to run a green operation here in Cambridge. And the neighbors and businesses around will say oh my gosh what are they doing? How did they do that? Who do I talk to? You know, so that's kind of the exciting part as well to be able to help the environment.

BRANCACCIO: The City of Cambridge is already trying to lead by example. In 2002- they began turning this historic but wasteful city building into the oldest certified green building in Cambridge.

BOLDUC: People really enjoy working here. And I think the public...

BRANCACCIO: John Bolduc is an environmental planner for the city and works with the Cambridge Energy Alliance.

BOLDUC: So the building actually gets used more than it did.

BRANCACCIO: That's a good thing. And anything that can take the edge off of paying a traffic ticket I suppose is a good thing.

BOLDUC: That's right.

BRANCACCIO: They designed what is now the Cambridge City hall annex to take advantage of more natural light... and instead of a furnace—to heat the offices, they installed a geothermal heat pump—that works off the constant temperature of the ground many feet below the building.

BOLDUC: Every panel adds up.

BRANCACCIO: But on top of the building is their most popular feature... much of the roof is covered in those solar panels.

BOLDUC: It's all renewable. It's all carbon free...

BRANCACCIO: All of these measures have reduced the building's energy consumption by almost half.

BOLDUC: I think it's also a symbol of the city walking the talk on reducing greenhouse gas emissions, which was one of the motivations also for doing this building the way we did it.

BRANCACCIO: And the city has committed to work with the energy alliance to get their other buildings retrofitted. But if the CEA is going to succeed—they need to get lots and lots of people onto this bandwagon.

PRATT: A really successful utility program is like three to five percent. Our goal is to get 50 percent participation rate. Fifty percent.

BRANCACCIO: You're going to get half the people...

PRATT: Half the people.

BRANCACCIO: In this city doing this, you think.

PRATT: Once we show that we can get to twenty—20 percent, 30 percent, 40 percent, plus, participation, we have broken the mold on what people say can and cannot be done.

BRANCACCIO: The biggest dent in emissions is not going to come from getting homeowners—or even small businesses like Kirkland Cleaners to participate.

PRATT: If you are a large company or a large institution in Cambridge, we're gonna be in-your-face. This is something that you are gonna need to do. Because energy costs are going up. I mean, maybe there will be dips, but by-and-large, you know, it's going up. And those who don't really figure this out, are gonna make themselves uncompetitive in an increasingly competitive world.

BRANCACCIO: Harvard and M.I.T.—the 2 biggest employers around here are already involved in the program.

This is also one of the major achievements of the energy alliance. By getting big companies on board and promising big participation rates, they've been able to win over investors to put up the capital needed to back the program. But the Cambridge Energy Alliance does have some major obstacles to overcome. 60% of homes in Cambridge are rentals—and in most—the landlord owns the property, the tenant pays the utility bills. So would landlords go through the expense and hassle of upgrading their properties if the tenant gets all the savings?

WILLIAMS: In virtually every case, I can tell you the answers are no. And that's the split incentive problem. That's what we're up against.

BRANCACCIO: The CEA has been meeting with different groups to figure this out. One solution on the table —a "green lease"—where both the costs of the improvements and the savings are shared by the landlord and tenant. Another obstacle involves the biggest player in any city's energy system: the utility companies. How far will, for instance, an electric company go to get you to buy less of its product?

PRATT: This is tough for utilities. Because, when you think about it—to the degree that we're successful in saving electricity, they sell less product.

BRANCACCIO: In Massachusetts—there are policies being debated right now to let utility companies charge what is essentially a flat rate. But as you can imagine, it is controversial.

PRATT: These are the kind of policy things that you do have to get right. So we can actually move forward and get utilities saying, "You know what? I can make as much money saving electricity as I can from selling it."

BRANCACCIO: NStar—the largest gas and electric utility in Massachusetts has decided to partner with the CEA. NStar already has a few energy efficiency programs, that'll now be offered through the energy alliance.

MAY: This is a very exciting—program. We're gonna see communities all over the country, in fact all over the world, copy—this model which is very, very unique. We've never seen anything like it.

BRANCACCIO: If he's right—this could also help boost America's sluggish economy. Fixing up thousands of buildings could mean a lot of jobs for the city and for the region. Zeyneb Magavi is already training that new workforce in her own home.

BRANCACCIO: So, Mark, have you had to learn some new tricks in this project?

KITTREDGE: A few new things. I mean, dealing with this insulation was—was different—

BRANCACCIO: Doesn't smell like anything.

KITTREDGE: That's—that's the biggest—thing I noticed. This one is totally odorless—totally benign. Has a little salty flavor, though, if you get a little speck in your—lips or something. You'll taste it's salt.

BRANCACCIO: Magavi also wanted her plasterer to use an unconventional material made out of clay. It's not only non-toxic—but it absorbs humidity which could help keep down air conditioning bills and energy use in the summer. The plasterer never used the stuff before. So Zeyneb paid for him to go up to New Hampshire to take a class.

BRANCACCIO: If it works for him, though, and it—

MAGAVI: He's gonna be happy as can be.

BRANCACCIO: He will have this new training. He'll be able to actually market this to perhaps other people converting their homes.

MAGAVI: And—and that's been one of my benefits is I pull people in and I say look, you know, market's slower. And I'm going to give you a niche edge. So you come in, try it on my house. I'll take part of the risk. And give me a good price. And—and—you know, it might work out really well for you.

BRANCACCIO: There are people thinking about the future here who think that we are possibly entering a time when a lot of people want to get more serious about making more energy-efficient houses. You think that'll be good business for you guys?

O'LAUGHLIN: Oh, yeah. We're in Reno—renovations and retrofitting the older places. I mean, the housing stock is—in Cambridge, it's all over 50 years usually. And—I mean, boilers, insulation, they're all outdated. So it's—the growth area.

BRANCACCIO: One study shows that there were 8 million energy efficiency jobs nationwide in 2006. If programs like the CEA catch on, that number could grow to 32 million jobs in about 20 years. But for now, we'll have to wait and see.

HEALY: There is already the slogan out there about green jobs—green-collar jobs, there will be, with a massive—use of the program, additional needs for those trades.

BRANCACCIO: But it is experiment. You're being asked to try something new. And there's always a chance, with an experiment, that it does unravel.

HEALY: I've been at this—profession long enough now, I guess, to know that things don't change overnight. But we are—we—we're gonna get there

BRANCACCIO: The energy alliance will officially roll out the program to all the citizens of Cambridge in the coming months. But Cambridge is a fairly compact place. Can the system work in a larger metropolis? Rob Pratt is helping Boston launch an energy alliance, and he's working with some states on similar projects.

PRATT: This is not just a nice to-do activity. This is something that we have to show, and have to succeed at, in order for us to leave the planet to our children and grandchildren.

BRANCACCIO: Back at the Magavi home, the plasterer is now putting his new skills to work.

ADRAGNA: We're always trying to learn and improve on what we do. And this is a great opportunity for us to introduce a new material.

MAGAVI: Well it looks great Nick.

ADRAGNA: Thank you.

MAGAVI: Really. I'm really glad this is working out

ADRAGNA: It'll work out very well. You'll have wonderful walls for a long time.

BRANCACCIO: For the Magavi family—Zeyneb, the two children, and her husband Sanjay, a scientist—building green has been a way to combine much that is important to them.

MAGAVI: I think it works economically. I really do. And I'll have to wait until the end to tell you for sure. But I think it's a win-win. We're doing what we want to do in terms of our ethics and in terms of the environment and our home for my family. And at the same time, I think we're gonna end up all right, even in the down housing market.

BRANCACCIO: They hope to move into their new home next month.
And that's it for NOW. I'm David Brancaccio. We'll see you next week.