Industry Market Trends

Mapping Out California: Interest Group Unveils 'Green MAP' to Bolster Manufacturing

Nov 29, 2012

When President Barack Obama passed the American Investment and Recovery Act in 2009, it included a number of provisions for supporting and accelerating the growth of green energy technologies. Much of the cleantech policy incorporated into that bill was first proposed by the BlueGreen Alliance, a coalition of union groups, small businesses, manufacturers, and social justice groups that work together to find common ground on environmental policies.

On Nov. 13, the BlueGreen Alliance unveiled what it calls the California Green MAP (Manufacturing Action Plan). The document proposes policy changes similar to those included in the Investments for Manufacturing Progress and Clean Technology (IMPACT) Act of 2009 proposed by Senator Sherrod Brown (D-Ohio), which were ultimately included in the American Investment and Recovery Act.

The California Green MAP is the fourth such "action plan" created by the group. The first was a national manufacturing strategy framework, published in 2008. This was followed by two regional plans: Michigan Green MAP (October 2011) and Ohio Green MAP (December 2011).

California is the largest manufacturer by state in the U.S., producing $229.9 billion in goods in 2011. According to the National Association of Manufacturers, manufacturing in California accounts for 11.7 percent of the total economic output in the state and almost 9 percent of employment in the state.

The California Green MAP makes seven major recommendations to policymakers:

1. Boost access to capital for cleantech manufacturers. The plan advises establishing a Clean Energy Bank funded by the California Global Warming Solutions Act's cap-and-trade program. It also points to federal tax-free bonds, in particular Industrial Development Bonds, as a highly underutilized opportunity to finance cleantech projects. Lastly, the plan proposes opening up local cleantech investments to state employee pension and retirement funds.

2. Simplify the application process for the Advanced Transportation and Alternative Source Manufacturing Sale and Use Tax Exclusion Program. The existing policy allows companies to avoid the state's 8.25 percent sales tax on property purchased for the design, manufacture and production of green transportation or energy solutions. The program itself has been successful, but the application process is generally considered burdensome.

3. Further support R&D programs. Innovation is critical to the success of any technology. The California Green MAP recommends continued support of the Public Interest Energy Research Program and iHub program.

4. Build green workforce training programs. The plan advises following the model of the California Employment and Training Panel to create training for what it calls "high road" jobs with career pathways.

5. Broaden business improvement services in the state. The Manufacturing Extension Partnership (MEP) of the National Institute of Standards and Technology has two affiliates in California, both of which provide consulting and technical services for improving organization, efficiencies and competitiveness of small and medium-sized manufacturers. These groups can expand their services to include helping manufacturers find opportunities to sell existing products to cleantech companies.

6. Develop more efficient building permit process. The permitting process for building or expanding factories needs to be reexamined, the BlueGreen Alliance insists. Overlapping and redundant regulation on the state and local levels can be streamlined to create a more efficient and effective process that does not compromise health, environmental and safety protections.

7. Contribute to federal cleantech reforms. As the U.S.'s largest economy by state, California can have a strong influence on overall national policies.

While the California Green MAP speaks specifically to green and clean manufacturing, Brian Lombardozzi, senior policy analyst for BlueGreen Alliance, insists that all manufacturers have the opportunity to benefit from these policies. He offers the example of Cardinal Fastener & Specialty Company, based in Bedford Heights, Ohio, which makes high-tensile-strength bolts for the construction industry. The company began selling its specialty fasteners to wind turbine manufacturers after being approached by one in 2009*.

"The plan supports all sorts of domestic manufacturing, including steel manufacturing," says Lombardozzi. "It's not just about assembling wind turbines and solar panels. We want to build up the entire supply chain where feasible."


* EDITOR'S NOTE: In June 2011, to the surprise of many, Cardinal Fastener filed for bankruptcy. While the company did break into a new market and build it's business, it suffered from a poor investment strategy. Later that year, Cardinal Fastener was purchased by Würth Group and continues to operate in Bedford Heights.