Massachusetts is the country’s undisputed life sciences champion. Can we claim the crown for clean energy as well?
Governor Charlie Baker sure hopes so. He’s been telling just about everyone who would listen about his plan to use $750 million of federal stimulus money to accelerate the clean-energy transition. The Legislature, as is often the case, has its own ideas.
As Baker rounds the corner of his last year in office, he worries Massachusetts could lose out to rival states in the race for clean-tech jobs and innovation — not to mention a carbon-neutral future. A well-timed assist from state government, he reasons, could go a long way.
“I just think we have a unique opportunity in Massachusetts to literally be ... the global leader in energy innovation,” Baker said in an interview. “This is going to be, for all intents and purposes, one of the most important developments that’s going to take place in science and technology over the course of the next decade. If it’s not here, it will be somewhere else.”
Baker’s predecessor, Deval Patrick, led an effort in 2007 and 2008 to pump $1 billion over 10 years into biotech and medical research, through the newly created Massachusetts Life Sciences Center. Baker’s clean-tech push would be similar, though he would use the existing Massachusetts Clean Energy Center. Baker’s one-time infusion would super-charge an agency that does everything from subsidizing environmentally friendly buildings to helping birth the offshore wind energy industry. Today, that agency survives primarily on $20 million or so annually from a surcharge on electric bills, along with a new carveout of $12 million for workforce training from the Mass Save program.
But like Patrick before him, Baker needs the Legislature’s buy-in. So far, it hasn’t been a particularly easy sell.
The governor first made the pitch last fall to state lawmakers, kicking off the latest debate about climate legislation at the State House. No takers. He revived it this spring, this time as part of a broader economic development bill. Maybe he will have better luck there.
With a July 31 deadline looming to complete complex or controversial legislation, House and Senate negotiators began meeting last Friday to haggle over their respective climate bills. While both would shore up MassCEC’s finances, neither Democratic-led initiative would allocate nearly as much money to the clean energy center as the Republican governor’s would. Baker also took the unusual step — for him, anyway — of proposing numerous earmarks. Among them: $300 million for reducing building emissions, $70 million for expanding the state’s wind testing center in Charlestown to accommodate bigger blades, and $2 million for electric-vehicle charging stations at Logan Airport.
House energy committee chair Jeff Roy said the House in March approved a bill that calls for allocating nearly $500 million for MassCEC over a decade — split between the existing charge on electric bills, which would be dedicated to offshore wind, and a new charge on natural gas bills, to fund other clean-energy efforts. That bill also includes tax incentives of up to $50 million to help offshore wind companies expand.
Mike Barrett, Roy’s counterpart in the Senate, argues that House leaders are devoting too much money to offshore wind, at the expense of other important clean-energy efforts. Barrett’s version would infuse $100 million from the state’s general fund into MassCEC, mainly for clean energy research and workforce training. Separately, it would set aside $145 million for electric-vehicle incentives and infrastructure.
Baker’s MassCEC proposal, to some extent, is getting caught in the crossfire over how fast to spend down the state’s remaining $2.3 billion from the federal American Rescue Plan Act. Baker wants it all committed before he leaves office, and often points to an end-of-2024 deadline. Legislative leaders, however, are in no particular rush, potentially saving a bit for the new governor (likely a Democrat). Barrett also raised concerns about some of Baker’s earmarks, such as spending tens of millions on new classroom construction, a capital expense he thinks is probably unnecessary.
This type of tussle qualifies as a good problem to have for MassCEC. No matter how it shakes out, the agency should emerge on more solid financial ground.
Just over two years ago, MassCEC faced an uncertain future as it spent more money than it was taking in. Clean-tech advocates worried the Baker administration would significantly cut its funding; Baker says today that “we’ve been big supporters of the CEC since the beginning.”
MassCEC did end up scaling back programming and staffing, albeit through attrition, to stay within its funding levels. Hard to argue with sound fiscal practices. But will the 55-person agency’s current funding stream be enough to keep us competitive in the clean-energy field?
Elizabeth Turnbull Henry sure doesn’t think so.
As president of the Environmental League of Massachusetts, Henry helped lead the push against bigger cuts at the clean energy center in early 2020. Her argument: moving society to a carbon-neutral future is the most important scientific challenge of our time, and solving it represents a tremendous economic opportunity. Replicating the success of the state’s life sciences sector is possible, she said, and Baker’s proposal would be a significant step forward.
Some key factors behind the biotech industry’s success — namely, Greater Boston’s heady mix of top research universities and venture capitalists — have already made Massachusetts a clean-energy leader. In one recent survey by Colorado VC firm Saoradh Enterprise Partners, the San Francisco Bay area was the only US metro area ranked ahead of Boston for clean-tech.
But this leadership position is by no means assured. Employment in the Massachusetts clean-energy sector peaked at 114,000 in 2019, before shedding more than 10,000 jobs in 2020 during the COVID-19 pandemic. A recent estimate shows it remains shy of pre-pandemic levels.
How effective is public-sector spending in lifting private-sector employment? The dollars-per-job calculations in the early years of the life sciences center ranged wildly, depending on who crunched the numbers. (For its part, the life sciences center, which oversaw $55 million in programming in the last fiscal year, says it helped create 15,000 jobs since its inception more than a decade ago.)
To Baker, charging up MassCEC isn’t just about economic development. It’s also about solving this vexing climate question: how to achieve net-zero carbon emissions. Massachusetts has its own goal, to pull this off by 2050. But so do a long list of other states, countries, employers.
The brainpower is here, at least. As Beacon Hill swims in an unprecedented budget surplus, Baker argues there’s no better time than now for the state to use some of that extra money to accelerate the search for solutions.