December 01st, 2017

Why Does the Clean Energy Economy Keep Winning Business Hearts and Minds?

Despite the Trump Administration's efforts to undermine the Clean Energy Economy,  amazing progress continues to be made. 

​Right now we’re in the midst of a national campaign intended to roll back the clean energy economy, along with over three million plus existing jobs in this industry and the climate protection that comes with it. This push by the Trump administration seems intent on diverting America’s path from leader in the clean economy to laggard.
 
This diversion is not in America’s best interests. The rest of the world continues to invest in and embrace clean energy because of significant health benefits, the need to lower carbon emissions, job creation, low energy costs, national security and political stability.  The Trump administration has chosen to ignore this opportunity and is attempting to handicap this industry in order to stay the fossil fuel course. This not only ignores market forces but it is actively hurting what American business does best – inventing the future and capitalizing on the global opportunity.
 
China is clearly profiting on the administration’s mis-steps. In order to reduce carbon pollution and to become the global clean energy leader they’re moving quickly; already some 2.5 million Chinese people work in the solar power sector. They intend to spend more than $360 billion through 2020 on renewable power sources like solar and wind. This will employ some 10 million people.
 
According to the Environmental and Energy Study Institute, wind, solar and energy efficiency employs more than 3.3 million in the US and  employment in this area will continue to  grow as the clean-energy sector continues to expand. However, Secretary of Energy, Rick Perry isn’t interested.  Perry says, “I would do away with the incentives that we give to wind and solar.” (While also supporting coal and nuclear to the tune of $10.6bn, including propping up some of the oldest and dirtiest power plants in the country.) The current Senate tax bill is also attacking renewables, set to undermine both current and past projects, by looking to end the “the principal financing mechanism that has fostered growth of the renewable energy sector since the 1990s.”

HOWEVER, even against this backdrop the clean energy economy continues to win over business (and other) hearts and minds:

• Renewable prices better than traditional energy. A new study from the financial firm Lazard Ltd, shows that the unsubsidized cost of energy from wind and solar outperforms nuclear and coal plants. It even trumps efficient natural-gas-fired generation. The report also shows: “In some scenarios the full-lifecycle costs of building and operating renewables-based projects have dropped below the operating costs alone of conventional generation technologies such as coal or nuclear.” That means that it’s often cheaper to replace existing older plants by building new solar and wind projects. This cost gap will only continue to widen as economies of scale and technology improvements drive cost reductions.
• Commitment to the Paris Agreement Grows. Hundreds of businesses, states, cities, universities and citizens representing more than half the U.S. economy and population have declared their support for the Paris Agreement vowing to fight climate change, grow the economy, and protect public health. During COP23, Microsoft, one of the world’s best business climate leaders, committed to reducing its carbon emissions even further by 75% reduction against a 2013 baseline. They recognize that new, clean energy economy will be critical to this effort. Microsoft stated “As we expand our global cloud infrastructure, we will increasingly turn to renewable energy because it is a clean power source and gives us better financial predictability. It's good for the environment, our customers and our business.”
• Investors are demanding that climate is taken into account to ensure better investments. Moody’s recently warned cities to address climate risks or face downgrades; ultimately, the greater the risk, the higher the interest rate municipalities will pay for bonds.  According to CALPERS, climate change presents a risk affecting greater than 98% of market cap.  It’s no wonder that the investment market wants to ensure that they’re covered.
• More utilities are embracing renewables because of cost and diversity: In a Reuters survey, of 32 power utilities operating in 26 conservative states, only one that said it might prolong the life of its coal-fired units. Many utilities are now actively choosing clean energy. Oklahoma-based American Electric Power, one of the country’s leading owners of coal-fired plants, is investing $4.5 billion to build the nation’s largest single-site wind project. It’s also investing in clean energy across other states. Nicholas K. Akins, AEP chairman, president and chief executive officer says, "This project is consistent with our strategy of investing in the energy resources of the future, and it will save our customers money while providing economic benefits to communities.”

 
At the end of the day it’s clear that the declining costs of renewable energy, along with growing commitment by businesses, states, cities, universities and citizens to stay on a low carbon path continues just keeps building momentum. In our state and across the country, we’ve got incredible leadership that understands that there’s a clear market (and environmental) case for the clean energy economy. We must continue to move forward by enacting carbon pricing in our state and to nurture collaborative opportunities that encourage national efforts that build upon this momentum. This is an economic opportunity that’s ours to take.

Author

Lisa McCrummen is a strategic communications consultant. ​​​