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

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/

We should stop Chinese Investment in Canadian Oil Sands

Canada approved Cnooc Ltd’s $15.1 billion takeover bid for oil -sands from operator Nexen Inc.  Shareholders have approved the deal, but it still needs approval from the U.S. and British governments because of assets that Nexen holds in those countries. WSJ Dec 8, 2012

Response:

What are the climate implications of $15 billion more invested in oil development? One gallon of gasoline, when burned, adds 20 pounds of carbon dioxide (CO2) to the air. How many gallons does $15 billion buy? Any science lab can demonstrate that CO2 warms air. See video demonstration. If you’re not sure whether the warming is affecting the world, see this video of melting glaciers , and  go see the new movie ‘Chasing Ice.’

It takes the CO2 a couple decades to warm the air and ocean, so the 10% increase in severity of storms (witness Sandy), the droughts, fires, floods and the fact that there are now twice as many record high temperature events than record cold temperature events, all these are the result of burning fossil fuels 20 years ago. What we burn today will cause a quantum worse weather extremes, over the coming years,  before most people pay off their mortgages.

IEA is not a group of tree huggers. According to IEA deputy executive director Richard Jones,  “Under current policies, we estimate that energy use and CO2 emissions would increase by a third by 2020 and almost double by 2050. This would likely send global temperatures at least 6 degrees Celsius [10.8 degrees Fahrenheit] higher. Such an outcome would confront future generations with significant economic, environmental and energy security hardships — a legacy that I know none of us wants to leave behind.”

We should oppose this investment in Canadian oil sands. Our government should encourage additional investment in American produced clean energy. We can compete, drive down the cost of energy, and revitalize our economy.

We make choices in energy policy. For a century American government chose to encourage the use of fossil fuels. We  bought it, paid for highways and airports, defended access to it with the blood of our brave troops, and subsidized it to encourage more development. It was not wrong for most of that time; but now it is wrong to continue. Times change. We cannot afford to increase the risk of more $60 billion storms. We cannot afford rising costs of fossil fuel dredged from the ocean floor and squeezed from sand. The manufacture of clean energy technology is an affordable, competitive proposition, which will stop the destabilization of the climate.  It is the choice we need to make.

South Pacific Nation goes solar

Workers install a solar array in Tokelau, an island nation that will be powered with renew...

Solar electricity on Tokelau

“Somebody said that it couldn’t be done…” E.A. Guest

Response:

The nation of Tokelau has  done it!!  It has installed  4,032 solar panels and 1,344 batteries, and will use them and  coconut oil to take care of its electric needs, replacing 200 liters of diesel it has been using daily, according to Earth Techling.