“Small Wonders”: How America’s Small Businesses are Helping Fuel a Green Economic Recovery

Small Wonders describes successful models, technologies and programs whereby small-business owners are reducing their fossil energy use profitably through increased use of efficiency and small scale on-site renewable energy technologies. The report also provides recommendations for policymakers to help mobilize small business on behalf of the clean energy economy. The report predicts that a green entrepreneurial boom will lead the way out of the present recession.

On June 10, the Environmental and Energy Study Institute (EESI) and Center for Small Business and the Environment (CSBE) held a briefing exploring the role of small business as the engine for job growth and the transition to a clean energy economy. At the briefing, CSBE released a new report, Small Wonders, the first assessment of the widespread and proliferating phenomenon of small green businesses. The briefing helped advance an understanding of why it is essential that the decentralized half of the economy – small business – is assisted in its efforts to green its operations.

• Small businesses employ half of the nation’s private sector (an estimated 70 million people) and produce over half of the nation’s GDP. For this reason, they will play a key role in a successful economic recovery.
• Small business owners are engines of innovation for environmentally friendly ideas. Many cutting-edge renewable energy technologies sold by large companies were originally developed by small business entrepreneurs.
• The green market share will be $420 billion by 2010. Thirty-six percent of Americans say they buy green products regularly, regardless of whether or not there is a recession.
• Small businesses count for half of the private sector’s energy consumption, but do not receive any of the volume discounts for energy that large companies receive.
• In most cases, small businesses lack the upfront capital to make energy improvements. Low interest loans, government funds, or other creative financial mechanisms can provide upfront funding to reduce costs. Programs providing information and technical assistance to existing small businesses also need to be expanded.
• Existing small businesses can benefit from installing more efficient heating/cooling systems and energy efficient lighting for immediate savings.
• In aggregate, small business is big business. Because they consume 50 percent of the nation’s energy, collectively, small businesses can have a large impact on the expansion of micropower technologies such solar, geothermal, wind, and battery packs.
• Workforce development and training programs are important tools to help former employees of older industries transition to the new green economy. Attention should be given to vocational programs as well, not just four-year college programs.
• Small businesses need to be included in discussions of a national climate change bill. Small Business California (SBC) was the first business organization to support California’s legislation that capped greenhouse gas emissions, affirming that climate change was a concern of small businesses. Thereafter, many other industries that were previously against the bill (AB32) reconsidered their positions.
• A study looking into the effect that a federal cap and trade program would have on small businesses would be highly valuable.
• Some policy recommendations from the Small Wonders report include:

1. Install a small business champion in the Obama administration, with respect to climate change and green technologies.
2. Give small businesses their share of resources. The current stimulus funding offers little to help small businesses become energy efficient or install new technology.
3. Assess how well government programs deal with small businesses to ensure that green small businesses receive priority funding.
4. Increase funding for the Energy Star Small Business program to help small businesses access micropower and energy efficiency services.