Anne Evens | Reflecting on the Cost of the Climate Crisis

Jennifer Tescher:
Welcome to Emerge Everywhere. I’m Jennifer Tescher, founder and CEO of the Financial Health Network. For two decades, I’ve worked with leaders across industries to answer one central question, “How can we make people’s financial lives better?” Now I’m sharing these conversations with you. Listen in to hear how these visionaries are rewiring our society to support financial health for all.

2024 marks the 20th anniversary of the Financial Health Movement and of the Financial Health Network. As we’re celebrating our 20th anniversary, we’re spending a lot of time reflecting on where we’ve come from and also thinking about the challenges and opportunities that lie ahead. One of those really significant challenges is the climate crisis, and in this episode, we’re going to focus on the complex interplay between climate health and financial health.

As the climate emergency deepens marginalized communities face some of the biggest challenges. They often struggle to access affordable, clean energy, to protect their homes from pollution, and to recover after extreme weather events, which seem to be growing in frequency. So how do we mitigate the financial fallout of climate change for these vulnerable populations and achieve a just climate transition?

Joining me for this conversation is Anne Evens, CEO of Elevate. Elevate works to ensure that everyone can access clean and affordable heat, power, and water in their homes and communities. I’ve been privileged to be a board member of Elevate for many years now, and I have been so impressed with Anne’s leadership in helping to ensure that we get to the other side of the climate crisis in a way that really is equitable for everybody.

Anne Evens, welcome to Emerge Everywhere.

Anne Evens:
Thank you so much, Jennifer.

Jennifer Tescher:
It is great to get to talk to you about the connection between the climate crisis and financial health. This is a conversation that you and I have had many times and now I’m excited to have it in front of a larger audience, if you will.

So when we first got connected, this is now years ago, and someone at your organization was thinking about how to turn energy savings, like when someone turns down their thermostat, and so maybe their bill will be less. How to take that savings and turn it into tangible savings, like money in the bank. And at the beginning of, it wasn’t even the beginning, but more recently, that’s how a lot of us were thinking about the link between climate and financial health. But if we could just get people to be more efficient with their energy use, the climate will be better off and they’ll have more money saved.

And certainly that’s still true, but so much has evolved in how we think about the deep intersections between climate health and financial health. And I’d love to hear you talk a little bit about how you’re thinking about that connection these days.

Anne Evens:
Yeah, thank you for that question. And yes, saving energy does save money. One of the things I think is important to understand about it is that energy is not a fixed cost. It is variable, and there’s lots that you can do, and there’s lots of money available, especially right now through the Inflation Reduction Act. To add solar panels to your roof if that’s an option, or look at getting a heat pump, which is three times more efficient than the standard furnace. So there’s all sorts of opportunities to really drive significant savings, many hundreds of dollars and thousands of dollars annually, which makes a huge difference.

And I remember reading in the Financial Health Diaries, which thank you so much for that work. It’s really important work that having just a buffer of $400 can make it or break it for families whose incomes are just not enough.

But it’s gotten much deeper. Because of climate change, we are experiencing extreme weather events at such a alarming rate, and it has real impact on real people’s lives. So it’s extremely hot outside, which is an increasing event. Even in places like the Pacific Northwest where you never saw extreme heat, schools aren’t prepared to provide cooling, and we see regular school closings. Well, if there’s school closings, that means that maybe parents can’t go to work. And so they’re seeing that lost income. And what we’re finding from partners is that one of the most serious threats towards financial health is actually climate change. So it’s extreme flooding, that means maybe you lose all the appliances in your basement, that’s a several thousand dollars hit that they really can’t recover from. So they’re just really inextricably linked.

Jennifer Tescher:
And it sounds like we’ve also come to appreciate that if we want to get to net-zero, while we all need to do our part, turning down the AC in your house isn’t really going to get us there. It’s the work of these really huge companies and organizations and that increasingly the impact on consumers is about their ability to withstand the downstream effects of climate change, whether that’s a natural disaster like a flood or it’s hotter in the summer, as an example.

And in some ways it also sounds though like your thinking and the thinking of this broader field reflects the evolution of the organization that you run over the last 20 years. So take us back to the founding of Elevate, which used to be called Elevate Energy. What was the original goal and how has that shifted over time?

Anne Evens:
Yeah, so I am going to lean on the folks that started what is now Elevate, my friends and colleagues at the Center for Neighborhood Technology that started the organization, and it was in response to the heat deaths in 1995 where sadly over 700 people in Chicago lost their lives because they did not have access to cooling. At the time, the grid was not as strong, and so there were rolling brownouts and blackouts. And that continues to today where we have to think about the strength and resilience of our grid infrastructure because we are all so reliant on electricity, the internet, all of that.

But the Community Energy Cooperative, as it was called inaugurally, started its first project by doing window air conditioning exchanges and getting window AC units into people’s homes on the near southwest side of Chicago in Little Village and Pilsen, in order to protect people by having more efficient air conditioning, reduce the load on the grid, providing for a more resilient grid.

As we’ve evolved over time, some things stay the same in that we can no longer think of things like cooling as a luxury, it really has to become standard. So we’ve now seen cooling requirements pop up in local government, with federally subsidized housing, really across the board. But we’ve really expanded what we do to really look very comprehensively at energy insecurity and water insecurity, acknowledging that across the country, 30 million households are making really serious decisions about whether or not they’re going to heat or eat. They’re managing their multiple expenses.

I think what’s relevant for today as it’s tax day, many very resourceful families really balance when they’re paying which expense. So over the wintertime when there’s a moratorium on utility shutoffs, they will prioritize other expenses and then live through the stress of hoping to get their Earned Income Tax Credit payments on time so that they can then become current on their utility bills and avoid imminent disconnection, which there are millions of families across the country who are at risk for imminent disconnection.

Jennifer Tescher:
I feel like of all of the access issues out there, the access to energy issue in all of its various forms, I feel like in some ways doesn’t get the attention it might have in the past because we assume that it’s all taken care of. It’s a little bit like the need for indoor plumbing. There was a time where there were still people who didn’t have indoor plumbing, and now we assume everyone has indoor plumbing. And we don’t really think about the fact that indoor plumbing does require paying a water bill and frankly, having access to clean drinking water.

And 30 million households, that’s a really big number. Certainly I know that people are in more financial precarity than they have been, that that’s probably one of the causes, but there must be something else going on with the provision of energy and the cost also. Can you shed more light on what’s been going on on the supply side?

Anne Evens:
Absolutely. Energy pricing is really highly influenced by what’s happening on the global stage and can be heavily impacted by tragic crises that are happening really around the world and certainly in Russia and Ukraine. But our electric grid is still, the generation still comes from some fossil fuels including natural gas. So as natural gas prices spike, you’ll then see an increase in electric costs. And like everything, you have this steady increase over time. With water costs, we’ve actually seen a much more rapid increase because of climate change. There’s much less water supply, and part of the municipalities’ tools for and the water utilities tools is to increase price. So families are seeing it on their electric bill, their gas bill, if they have one of those, and as well as on their water bills.

And I think you’re right, it’s not widely known that people are really struggling in this way. And part of that is because this is deeply personal, and if you can’t provide electricity or water in your home, it’s not something that you necessarily want to advertise to your neighbors. I think as human beings, we can all care. And there’s been a number of studies that have shown that there’s many of us who would be willing to pay more. Because for many of us, especially if we’re set up for electronic payment, we don’t even look at our utility bills on a monthly basis. So it is definitely not top of mind, but I can say that again, those numbers are really high. Of course, Black, Latinx families are disproportionately impacted, and many, many, many people, myself included, have faced disconnection notices. So it is incredibly common, but we’re not talking about it.

Jennifer Tescher:
Yeah, you went right where I was going to because unfortunately, like so many other things in life and in this world, energy access, energy cost, clean energy is not equitably distributed, and I know that equity has become an even bigger focus of Elevate’s over the years. Talk to us a little bit more about how this plays out, not just between and among different racial and ethnic groups, but also between different geographic communities.

Anne Evens:
So what we have seen over time is that energy efficiency, water conservation and renewables work. And the systems that we use to provide subsidy. Well, I guess this is debatable, but we have some federal climate goals. Definitely at the state level, we have climate goals and as well as at the municipality. And in order to support these goals, we as an economy, as a society, invest in energy efficiency and renewables by subsidizing the cost, bringing the cost down. And most of the systems that have been used, and this won’t surprise you because it’s common, are from the perspective of, “It doesn’t matter whose unit of energy we save as long as we save them at the lowest cost.”

Jennifer Tescher:
What’s so interesting about that is we hear all the time about inequities in the tax code or in subsidies like the home mortgage interest deduction, but these kinds of subsidies are like a double whammy, because not only are you going to get a rebate often or some kind of subsidy for the cost of the new appliances or the solar or the car, but you’re also going to then experience an ongoing savings as a result. I hadn’t really thought about it that way before.

Anne Evens:
So there’s a number of inequities in the system. And what has happened is that upper income households are actually paying significantly less on their utility bills than communities of lower wealth, than communities of color. Additionally, this is kind of stacked on decades of discrimination. So I’m joining from Chicago today. If we think about the contract buying as a result of redlining in communities of color where Black families were paying significantly more for their homes and then maybe even losing their homes, so losing all that than white families. Well, they had less disposable income available because they were paying more for their homes to make repairs on their homes.

So what we’re finding is maybe they can’t participate in a rooftop solar program because they desperately needed a new roof first, or their roof has been leaking and that’s caused other damage. The term that’s often used to describe that is deferred maintenance. I hate that term because it like, “Oh, I don’t feel like it. I’m just going to defer fixing up my house.” The reality is that these decades and decades, centuries of discrimination are what results in these inequities.

Jennifer Tescher:
How will you improve financial health this year? Join hundreds of leaders to reflect, rethink, and rewire the future of financial health at Emerge 2024. Our special twenty-year celebration is happening June 5th to the seventh in Chicago. Learn more and get your ticket at finhealthnetwork.org/emerge.

So Ann, tell us a little bit more about what Elevate is doing, both on the ground directly with people in community, but also then at the policy and systems level.

Anne Evens:
So directly on the ground, we are providing direct services to help people upgrade their homes. So that’s both helping them understand what’s the right technology for their home, as well as managing a construction project. If you’ve ever had a construction project in your home, you know that’s not a lot of fun. So having somebody to make sure that you are working with quality contractors.

But equally important is we’re braiding together the dollars to pay for these upgrades. And we’ve upgraded now over 160,000 units of housing, which not only preserves that housing unit, but also provides stability. One of the things that we’ve learned over time with our partners in the affordable housing community is that folks can’t pay higher. They can’t just always pay higher rents and higher utility bills. We have to have some give. And so we have a lot of partners in the affordable housing community that are really trying hard to implement upgrades. So we’re impacting renters as well because we’re working in multifamily as well as single family. And we’ve done some studies and shown that the net operating income actually goes up for buildings once they’ve been upgraded because one of the drivers of vacancy rate is not being able to pay your utility bills. I think there’s all other work that-

Jennifer Tescher:
Interesting

Anne Evens:
That researchers have done that have shown really the close connection between utility disconnection and housing instability, including becoming an unhoused situation.

Jennifer Tescher:
So really in a perfect world when people are searching for rental housing from a disclosure perspective, the landlord would be providing not just the cost of the rent per month, but also on average, recognizing that people use different amounts of energy, like what a typical utility bill looks like in that building, given the appliances that are in there, the heating or cooling systems, et cetera, et cetera. That seems like it would make it much easier for people to be shopping for what is already scarce, affordable housing, but to make sure that they can not only afford the rent, but also the other expenses that go along with it.

Anne Evens:
And that’s a perfect link to the policy work. Because there are places and Chicago is one of them, where there is an energy disclosure requirement and at least signing and at a real estate transaction. And we’ve done a lot of work to support that and advocate for policies like that.

Jennifer Tescher:
Interesting.

Anne Evens:
Equally important is the job creation and wealth creation part of what we do. So we recruit and train contractors from a diverse set of backgrounds to be able to get the certifications, get part of contractor pools so that they can do these projects, and increase their company’s revenues. And we have lots of stories of people who started as two folks, two guys in a van, and now have multimillion dollar businesses running multiple crews with multiple trucks and providing high quality jobs for people. So that’s also an important part of the story.

Jennifer Tescher:
So we’ve talked a lot about at the local level, a little bit at the state level, but boy, there is so much going on at the federal level around the climate crisis. And a raft of new bills with acronyms to help to pay for what is often being called the just climate transition. I wonder if you could give listeners a high level sort of thumbnail sketch of how to understand what the federal government is trying to do and how that money is going to be making its way into communities. I know that some of that money, grants were just announced I think maybe last week, so if you could give us a little bit of a primer that would be great.

Anne Evens:
In the vast majority of cities, the biggest source of emissions is providing heat, power, cooling, as well as water treatment in buildings. The federal government gets that and the push within the Inflation Reduction Act, and this is really many people, many organizations, big coalitions have been working on different versions of these, of what came out in the Inflation Reduction Act for decades.

But there is in total a $369 billion investment in climate solutions. Many of those are aimed at buildings. There’s some transportation and other investments as well. There’s so much in there. I will just talk about a few of the programs that are going to be helpful to help folks get to zero emissions on their homes, and those are called the Home Rebate programs. They total $14 billion. They are running through the state energy offices. So there’s a real need for energy and housing groups to get together at the state level to make sure those programs are designed well.

And in total for market rate families, there’s upwards of $14,000 per home available. So that’s a significant incentive for homes and people with lower incomes, it’s significant. It’s twice that. So there’s significant investment again to upgrade your heating and cooling systems, add cooling because in many lower income communities, there is no cooling. And to take us back to where we started, we know we know that our response to extreme heat is not where it needs to be. We have to really step up and make sure that there’s cooling available in people’s homes because every year we have heat deaths.

Jennifer Tescher:
And it sounds like with all of these different programs that the federal government is funding, that they have made a significant effort to build equity into the guidelines. So you said as an example that households with lower incomes will qualify for more assistance towards these projects. Can you give maybe a couple of other examples of how the federal government is trying to ensure that these funds are allocated in an equitable way?

Anne Evens:
Absolutely. So the administration issued an executive order called the Justice40 Initiative, which is a commitment that at least 40%, some of us think it should be a 100%, but at least 40% of the climate investments go into communities that have been defined as disadvantaged. That’s the federal term of course, we like a more asset-based language, but it’s environmental justice communities, communities of lower wealth, tribal nations.

And it’s really important that that happen because one of the things that we know from doing this work for so long is the first people in line for government grants or programs are people who already have some resources. And that’s because it’s difficult. It’s difficult to apply for programs, it’s difficult to apply for federal grants. And so by having both a whole investment and capacity building that is also part of the Inflation Reduction Act and capacity building grants from EPA and other governmental agencies, there’s a real mind shift in that we have to actually get resources into communities that are left behind. So that often includes smaller cities, many communities of color.

So there’s a real commitment, and you can see it in how the RFPs are written. For example, one of the new programs that is out there is called Community Change Grants, and those are grants that not only are not requiring any local match, but they’re also pay forward as opposed to reimbursable.

Jennifer Tescher:
The big banks in particular are really focused on reducing their own greenhouse gas emissions, but even more importantly, the emissions of their big corporate customers. And that’s super important to helping us get to net-zero, but I sometimes worry that they’re not as focused on their Main Street customers who, like we talked about earlier, may have to choose between paying their credit card bill for the month or paying for an excessive air conditioning bill. What role can banks and other financial institutions be playing as we think about these adaptation issues?

Anne Evens:
So many things. One, just helping to create awareness. Energy is a little bit mysterious for most folks. We don’t know how the systems in our homes work. We just know we want to be warm in the winter, cool in the summer. So I think definitely helping to provide awareness. I will say, and I just told you that there’s tens of thousands of dollars available per unit as grants if you want to do a full upgrade. And if you’ve got some work to do first, like you have to get a new roof or address some structural issue, the project costs are maybe something like $50,000 a unit. And so some kind of flexible financing is going to be needed to fill that gap, working with your homeowners and building owners.

One of the ways we work often with financial institutions is looking at how their portfolios are performing. And we can always identify the portfolios that are performing poorly from a financial side are also performing poorly from an energy side. So one of the ways to improve the individual buildings and the portfolios is to really get in there and do the energy work. So connecting with organizations like Elevate and our peers to develop more comprehensive strategies for their customers is definitely a way to get involved.

And then I think the big announcements that we were talking about earlier are the Greenhouse Gas Reduction Fund Awards. So recently $20 billion were awarded for this gap financing from US EPA. So that’s a great way for financial institutions to get involved is learn about the Greenhouse Gas Reduction Fund and figure out how they can participate and bring this more flexible gap financing to their customers.

Jennifer Tescher:
Super helpful. So in 2022, you received the Heinz award, which is a really big deal for those who don’t know, for outstanding contributions to the environment. And you’ve been at this for a really long time, but you started your career as an engineer actually, working on rural development in Mozambique. So how did you get from there to here?

Anne Evens:
Don’t know. Good question. Probably a bit of a zigzag journey. And I have to say, I did not know there was such a thing as a five-year plan until I was already, had been working for a couple dozen years. So I did have the fabulous opportunity to work together with a Mozambican engineer to build a rural reconstruction program, roads, schools for a newly independent Mozambique. And it was a wonderful opportunity to learn so much about communication and people as well as buildings.

And I was fortunate enough to work myself out of a job after about seven, eight years, I was no longer needed and didn’t have to take up space when there were plenty of trained Mozambicans who could do the job better than me. So I took the opportunity to come home, and since I knew the technical side or engineering side of construction and community development, I really wanted to learn the financial side.

So I worked for an affordable housing developer, learned how to do low-income housing tax credit applications, learned how to do all the layered financing, learned to meet many folks in financial institutions trying to get those commitment letters that wouldn’t come in first or second. So that was a great, great, great opportunity. I then got the opportunity to work in local government leading programs, so that was really great opportunity to understand public money and understand the local government perspective. And suddenly I woke up and it was 10 years later and I was ready for my next challenge, and Elevate was looking for a new leader. So that’s how I got here.

Jennifer Tescher:
I can see now how really this role brings together all of your prior experience, and there are lots of people in the climate universe who are scientists, who are approaching it from that lens. And it’s so interesting to hear about you approaching it from the lens of an engineer and a community developer, and it makes sense given the large slice of the climate justice work that you and Elevate have taken on.

This is such an existential issue, and not just for the disinvested communities and people that you’re really working on behalf of, but for all of us. And so what keeps you up at night as we think about this and what gives you hope?

Anne Evens:
Yeah. So yes, climate change is coming for all of us, and that can feel very, very overwhelming. I think what keeps me up at night is seeing all the opportunities come together, and the unprecedented federal investment is really getting equity right this time. So I feel like we’ve been offered an opportunity that we may never get again, and I just want to make sure that we are showing up as our most creative, nimble selves to be able to, and persistent, to be able to push through because these are not easy problems to solve.

I can say that what gives me hope is our youth, and just tell you a quick little anecdote. Of course, we had that amazing eclipse last week. I happened to live across the street from a school and all the kids got glasses and they all came out and all the neighbors came out and they were so excited. And it was such a beautiful opportunity to see how people can come together with joy to experience something together. And it makes me, I’m trying to hold onto that hope and that joy as much as I can, because it makes me hopeful that we can actually come together and solve problems, and it’s going to be our emerging youth that are actually the ones that are going to solve it.

Jennifer Tescher:
Well, Anne, it’s people like you who give me hope on this set of issues. So thank you so much for joining me on Emerge Everywhere.

Anne Evens:
Thank you so much.

Jennifer Tescher:
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