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

  1. http://www.bloomberg.com/news/articles/2015-11-23/leapfrogging-to-solar-emerging-markets-outspend-rich-countries-for-the-first-time
  2. 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
  3. 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
  4. 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

  1. 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
  2. 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

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

Statement by 350 institutional investors handling $24Trillion in funds

  1. http://www.ceres.org/press/press-releases/world2019s-leading-institutional-investors-managing-24-trillion-call-for-carbon-pricing-ambitious-global-climate-deal
  2. http://www.theguardian.com/us-news/2015/dec/06/debbie-dooley-tea-party-solar-energy-florida-environment
  3. 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
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Ruling protects Clearwater River and Forest

Clearwater River near Greer

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

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

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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.

Streamline permits for solar

Citizens can promote sustainability by making sure that communities and states have updated their codes and standards for installation of solar panels. States, cities and even planning commissions can choose to encourage or to block homeowners and businesses from adopting cost saving solar power. There are wide differences in waiting time and cost for permits to install photovoltaics. As the cost of solar panels drops, old and costly permitting requirements can double to price of solar installation.The US Department of Energy studied and reported on major gaps in 2010 and helped fund the Solar ABCs, recommending standards and codes for installation. In half a dozen states, solar panels provide cheaper electricity even without subsidies. With current federal tax credits, solar rooftop electricity is competitive with local electric costs in all but a few states.

http://cleantechnica.com/2013/08/21/local-permitting-makes-a-bigger-difference-as-solar-gets-cheap/

http://solarabcs.org/about/index.html

http://www.ilsr.org/why-pay-double-solar-america/

http://www.forbes.com/sites/toddwoody/2012/07/05/cut-the-price-of-solar-in-half-by-cutting-red-tape/

Tea Party support for clean energy

Tea Party supporters in Georgia are calling for more consumer choice in energy. Debbie Dooley, a national coordinator of the Tea Party Patriots argued for a vote by the Public Service Commission of Georgia to require Georgia Power to add solar generation to its portfolio. In an interview with Chris Hayes in ‘All In’ she said, “We care about our environment.  We believe things should be done in a conservative way. ..This solar plan will not have to be subsidized.  We believe this giant utility monopoly deserves some competition and that consumers deserve a choice. …Show us in constitution where a government can pick winners & losers and set up a monopoly and be an impediment to the free market. We believe it is wrong.  In the next legislative session we will be asking the legislators to overturn the Territorial Right Act of 1973 that actually allowed these monopolies to take place.”

Byron Dorgon, a former Senator from North Dakota agreed and went further. “If we want more clean and renewable energy in this country, we have to do something about it. Thirty states have renewable energy standards, good for them, they are the heros. States need to make choices about what kind of future they want.  …. There should be renewable standards in every state should have them. We ought to have a national energy standard.”

Encouraged by public support by both the Atlanta Tea Party and the Georgia Sierra Club, members of the Public Service Commission voted on July 11, 2013 to require Georgia Power to generate more power from solar, adding 525 megawatts by  2016.  Although the power company had argued for months that such a move would raise rates, after the vote, the company’s attorney said that the addition of more solar probably would not affect power bills.

http://onlineathens.com/local-news/2013-07-10/ga-power-says-closing-coal-plant-wont-make-room-solar

http://www.ajc.com/news/news/state-regional-govt-politics/georgia-utility-regulators-back-unprecedented-sola/nYnBk/ – cmComments

Pikes Peak conquered by Winning Electric Motorbike

Go Electric!  Lightening Motorcycle’s electric sportbike won the race up Pikes Peak this year. It beat the next closest competitor, a gas powered Ducati, by a full 20 seconds. The 12 mile track climbs 4720 feet to the top of one of Colorado’s 14,000 foot high peaks.