Financing a Clean Energy Economy

Financing a Clean Energy Economy – Opportunities and Risks for Businesses & Investors

Opportunities in a clean energy economy

*“The race for renewable energy has passed a turning point. The world is now adding more capacity for renewable power each year than coal, natural gas, and oil combined…

The shift will continue to accelerate…” (BNEF) 1

* Costs for electricity from solar and wind are plummeting and are now lower in some markets than electricity from coal or natural gas and still dropping (NYT) 2

* Some U.S. utilities are choosing solar and wind, reasoning that fixed prices for renewables protect ratepayers from price hikes 3

* Worldwide, last year, $329 billion was invested in renewables 4

* “{M]ore than half the world’s annual investment in clean energy is coming from emerging markets instead of from wealthier nations..” 5

* Businesses can save substantial amounts of money by reducing energy use. 6

* “Green mutual funds, invested in companies with exceptional environmental credentials, now outperform ‘black’ funds – which invest in fossil fuels – by more than 14% over the period 2012 to 2014.” 7

*.”. a look at profits and losses….made clear,[that] companies and investors that shun sustainable, low-carbon assets stand to lose a lot of money” (UN Investor Summit) 8

Acknowledging risks in using fossil fuels and making changes

* “Budget experts are also starting to see rising costs on the federal balance sheet. …disaster relief…Vulnerability of nation’s roads, bridges and waterways due to rising sea levels and changing weather pattern….U.S. military installations & operations are also threatened…” (Budget committee hearing) 9

* Climate change will have, ‘specific, measurable impacts on our nation’s current assets and ongoing economic activity…By not acting to lower greenhouse gas emissions today, decision-makers put in place processes that increase overall risks tomorrow” 10

* The U.S. government subsidizes the use of fossil fuels four times more than it subsidizes clean energy (Tax committees) 11

* U.S subsidies for fossil fuel, if you include… environmental damage like local air pollution, health costs, and other externalities, is estimated for 2015 at $5.3 Trillion or about $1800/person/year (IMF) 12

* The International Energy Agency (IEA) recommends phasing out fossil fuels subsidies and increasing renewable subsidies. 13

* People who invest money for others – for pensions, countries, and institutions should assess and monitor the impacts of climate change on investments and invest in clean energy, (Mercer) 14

* “350 global institutional investors representing over $24 trillion in assets have called on government leaders to provide stable, reliable and economically meaningful carbon pricing that helps redirect investment commensurate with the scale of the climate change challenge, as well as develop plans “to phase out subsidies for fossil fuels.” (Ceres) 15

* “Let’s remove the barriers … that protect the monopolies and allow consumer choice and freedom” 16

* “solar energy is cheap, plentiful and offers a monopoly-busting solution to generating electricity “ 17 (Dooley)

Footnotes:

1. http://www.bloomberg.com/news/articles/2015-04-14/fossil-fuels-just-lost-the-race-against-renewables
2. http://nyti.ms/1MZGIke
3. http://www.utilitydive.com/news/utility-scale-solar-booms-as-costs-drop-challenging-gas-on-price/406692/

4 http://www.bloomberg.com/news/articles/2016-01-14/renewables-drew-record-329-billion-in-year-oil-prices-crashed

5. http://www.bloomberg.com/news/articles/2015-11-23/leapfrogging-to-solar-emerging-markets-outspend-rich-countries-for-the-first-time
6. Improvements in energy efficiency earned 196% payback over 2 to 3 years for S&P500 companies reporting to the Carbon Disclosure Project (CDP) https://www.cdp.net/CDPResults/3-percent-solution-report.pdf
7. http://www.business-school.ed.ac.uk/about/news/2320   Also “the six major renewable investment funds yield between 5.5% and 7% – attractive returns in the current market. http://bit.ly/1mCJoNJ
8. http://bit.ly/1mCJoNJ   Guardian article referring to Jan 2016 UN Investor Summit on Climate Risk with 500 global investors representing an estimated $22tn in assets

9.Budget Committee Hearing 2014 chaired by Sen Patty Murray

//www.budget.senate.gov/democratic/public/index.cfm/2014/7/the-costs-of-inaction-the-economic-and-budgetary-consequences-of-climate-change-opening-statement-of-chairman-murray

10. Risky Business A Climate Change Assessment for the U.S. (co-chairs: Henry Paulson, Michael Bloomberg, Tom Steyer) http://riskybusiness.org/report/overview/executive-summary
11. The Joint Committee on Taxation $30bn for oil, coal and gas related . $6.2 bn for efficiency and clean energy related. Estimates Fed Tax Expenditures 2012-2017

https://www.jct.gov/publications.html?func=startdown&id=4503

12. http://www.imf.org/external/pubs/ft/survey/so/2015/NEW070215A.htm
13. https://www.iea.org/Textbase/npsum/WEO2015SUM.pdf
14. http://www.mercer.com/insights/focus/invest-in-climate-change-study-2015.html

Statement by 350 institutional investors handling $24Trillion in funds

15. http://www.ceres.org/press/press-releases/world2019s-leading-institutional-investors-managing-24-trillion-call-for-carbon-pricing-ambitious-global-climate-deal
16. http://www.theguardian.com/us-news/2015/dec/06/debbie-dooley-tea-party-solar-energy-florida-environment
17. Debbie Dooley, co-founder of tea party and green tea party https://www.climaterealityproject.org/blog/debbie-dooley-changing-how-conservatives-think-about-clean-energy

Running out of Time

According to Wall Street Journal Reporter Jason Bellini  time may be running out for us to deal with climate change.  Here is a transcript of his report:

“Negotiators from more than one hundred ninety countries gathered in Lima Peru for climate talks . They are trying to negotiate a way to avoid catastrophic climate change. What are the scenarios they are up against? They fall into three categories all interrelated. One, the amount of carbon dioxide in the atmosphere measured in parts per million , two, the billions of tons of global greenhouse gases released into the atmosphere each year .and three, the average global temperature of the planet.

Climate scientists are alarmed by levels of carbon dioxide and other greenhouse gases in the atmosphere , which are the primary drivers of recent climate change . Before the industrial age, CO2 levels averaged around 275 parts per million. This year that number surpassed 400 parts per million , the highest in recorded history Many scientists believe the concentrations haven’t been this high in millions of years and most say this is the main reason why global temperatures are on the rise.

The global average temperature is now above the pre industrial average by about .85 degrees Celsius. Global leaders in the 2009 Copenhagen accord agreed that it would be dangerous for global temperatures to rise more than 2 degrees Celsius . The earth has warmed .85 degrees Celsius since 1880, so that leaves us around 1.2 degrees Celsius to go before crossing the a dangerous threshold , one that risks a degree of climate chaos, say experts, that would make a large part of the planet uninhabitable. What’s the plan to keep the rise at 2 degrees Celsius? In 2013, the International Panel on Climate Change agreed that, based on the fact that the carbon emitted stays in the atmosphere for centuries, humankinds’ total CO2 budget is one trillion tons of carbon. But emissions have risen so fast in recent years, that the world has already used up more than half that carbon budget. If emissions’ quantities continue to rise at projected rates, the rest of that budget will be fully spent in the next thirty years.

A UN report in November concluded that this can only be avoided if greenhouse gas emissions peak by around 2025 and then were cut by half by 2050, and further reduced to near zero by the end of the century. That means, according to University of Oxford’s trillionth ton calculator, the planet as a whole has to start reducing its emissions by 2.57% per year right now. A lot of those reductions would depend on two big players, China and the U S, which recently signed a deal. China’s agreed to cap its emissions growth in 2030, and the U S pledges to reduce emissions by up to 28% percent by 2025 . But according to analysis from MIT, if other countries follow the lead of the U S and China, the world would begin reducing its CO2 emissions, but not by half by 2050, and not to zero by the end of the century. Most experts say that, as things stand now, the goal of keeping temperature increases below two degrees centigrade is becoming harder and harder to reach. That’s the short answer.”

http://www.wsj.com/video/climate-change-why-time-may-be-running-out/A7BFADE1-C21F-453F-BE97-CF90B8331437.html

Year of the Horse, expanding the green energy economy

In 2014 begins the year of the horse, and in particular the wood horse, strong and stable, energetic, friendly and successful.

 

As we end the year of the snake, we can perceive ways to avoid failures.  Pollution wastes our efforts and our assets. With new technology we can count the drops of fresh water, inches of topsoil and chemical make-up of the air. We can measure how much we have polluted, and what is still available to support life. If we so choose, we can preserve the purity of water, the vitality of soils, and the cleanliness and health of our atmosphere. The carbon emissions from burning oil, coal, and natural gas are pollution that destabilize our climate and undermine our prospects for a strong economy. 

This is a time to end wasteful practices. We need to use energy more efficiently. We need to invest more in clean energy to reduce economic losses from carbon pollution, and reap greater profits. We need to use our resources thoughtfully, and plan for long lasting happiness.

In this year of the horse, we should celebrate our good fortune and turn it into long-term benefits for all. This is a time for people to celebrate their strength and stamina, their energy and vitality.  This is a year to be cheerful, friendly, and vocal, and to call on all people to work toward a vibrant, new green energy economy.

 

‘incompatible with organized global community’

“why inaction on climate change is “incompatible with organized global community, is likely to be beyond ‘adaptation’, is devastating to the majority of ecosystems & has a high probability of not being stable (i.e.  4°C [7F] would be an interim temperature on the way to a much higher equilibrium level),”  An Illustrated Guide to the Science of Global Warming Impacts: Why We know that Global Warming is the Gravest Threat Humanity Faces   

http://thinkprogress.org/climate/2012/10/14/1009121/

 

Green Building Slam

The Northwest EcoBuilding Guild invited builders, architects and contractors of ten outstanding green home building projects to showcase their achievements of impressive energy efficiency in new home construction and retrofits for a large and enthusiastic audience.  Presenters described the technology and systems they used,  such as super insulating building envelopes, triple-paned windows, heat exchange ventilation systems, passive solar design, LED lighting, efficient appliances, FSC wood, regional materials, bicycle storage, cisterns, rain gardens, green roofs, and solar PV installations.  

These are not millionaire luxury homes, but a wide variety of single and multi-family housing where residents will profit from creative targeting of investment for lasting savings in energy costs. One house is powering not only the residence, but also an electric car with solar rooftop panels. In Seattle.

Check it out at :  http://www.ecobuilding.org/

Climate 101

Ruling protects Clearwater River and Forest

Clearwater National Forest  Highway 12     visitidaho.org

Over 100 miles of a 2-lane highway between the Clearwater and Lochsa Rivers, scenic and federally protected rivers, several companies want to try to drive a 322 ton evaporator.  In response to a lawsuit brought by the Nez Perce Tribe and Idaho Rivers United, a federal district court judge has ruled that there must first be a study of the environmental, economic and tribal impacts.

The companies want to take the evaporator from Lewiston, Idaho to the tar sands of Alberta, Canada. They had ignored objections from the Forest Service and started the transport without approval. In August over 150 people blocked the highway for three hours. The Nez Perce issued a statement opposing the shipment because of risks to treaty-preserved resources, tribal commerce, health and welfare.

In Alberta, the evaporator would be used to process oil.Over two billion barrels of water is pumped yearly from the Athabasca River, and superheated to wash oil out of the sands, and much of that dirty water ends up in tailings ponds that now cover 66 square miles of what was virgin boreal forest.  The process requires a great deal of energy, to scoop out the tar sands, heat, separate and transport them. If the value of damage to the forest and water resources were included in the price of oil, our transportation costs would be lower if we develop electric vehicles instead, and solar and wind energy to charge them.

http://www.allgov.com/news/controversies/judge-blocks-shipment-of-mega-load-oil-field-equipment-through-scenic-national-forest-land-130917?news=851146

http://www.allgov.com/news/us-and-the-world/tar-sands-oil-extraction-uses-more-water-than-entire-city-of-toronto-130809?news=850812

Climate change increases drought and conflict in Syria

The military has been warning that climate change would be increase conflict around the world.

Syria appears to be a case in point. A prolonged drought has reduced rainfall over the past five years and caused massive crop failures. As farmers and herders have become unable to feed their families, millions have moved into urban areas.  Joining refugees from Palestine and Iraq, the displaced rural dwellers have created a situation that has not been reported until recently because the Assad regime kept journalists away.

http://billmoyers.com/2013/09/06/drought-helped-spark-syrias-civil-war-is-it-the-first-of-many-climate-wars-to-come/

Living building home

Check out this gorgeous Oregon ‘living building’ home. Huge windows look out on green meadows and forests, but its 3500 square feet of indoor space is expected to use only $50 a year in energy bills.  It uses solar panels, of course, but also has super insulation, heat-recovery ventilation, a roof overhang and window shades to control heating and cooling.  Eric Lemelson consulted with Green Hammer and worked with construction company, Hammer and Hand to create his home.

http://on.wsj.com/18IbY2p

Cars that burn up the roads

Two articles appeared next to each other on the front page of the WSJ on August 18: ‘US Car Plants Shift to Top Gear,’ and ‘Decade of Drought Threatens West.’

We need to connect the dots.

The manufacture of 60 million new passenger vehicles in 2012 worldwide, 99% of them burning gasoline or diesel, guarantees us more extreme weather disasters.

With rising carbon emissions making the atmosphere warmer, increasing storm surges, floods, droughts and wildfires will destroy infrastructure, water resources, homes, and jobs.

The federal government gives tax credits for the purchase of electric vehicles and installation of solar panels that can be used to charge them, and also requires automakers to increase energy efficiency.  This is great, but we should do more.  A carbon fee should be imposed to make purchasers of fossil fuels to pay more of the actual costs of using those products.  Taxpayers now pick up the tab for spill clean-up, disaster aid, flood insurance, crop insurance and military protection of oil shipments.

A tax on oil, coal and natural gas at the wellhead, mine or point of entry, increasing each year, up to $100 per ton, with revenue returned to households would help level the playing field and allow more profitable production of clean energy alternatives.   With a tariff on goods from other countries not imposing a carbon fee, we could also encourage worldwide adoption of clean energy.