The Clean Energy Future Blog

By Coalition for Green Capital

By STEPHANY GRIFFITH-JONES

US president-elect Joe Biden wants to massively increase investment in everything from clean energy to healthcare and housing. But his efforts will be hampered because the US lacks vital tools that its major competitors and allies rely on….To address the challenges America is facing — Covid-19, recession, inequality and climate change — Mr Biden should create a public investment bank. Without one, the US is trying to respond with one arm tied behind its back….We propose that an AIB should be independent, non-partisan and subject to rigorous regulation and government audit. It should be capitalised initially with up to $100bn to assure sufficient resources for its activities and aim at a high investment grade credit rating to access private capital markets at low cost. …At all times, it would allow grant resources and technical assistance to reach vulnerable communities. Those with significant populations of black, brown, indigenous people and others, are often marginalised and face a lack of access to credit, and disinvestment because of loss of industry or transition to clean energy, for example. Read the full piece online.

By Jeffrey Schub

This weekend, President-elect Biden launched his transition, which highlighted four priority policy areas: beating COVID-19, economic recovery, racial equity and climate change. 

Each of these alone represent urgent tasks for the American people and the new incoming administration, but just one looms largest as an existential threat to the continued viability and habitability of our planet: climate change. Addressing it must be a top priority for Biden and his team.

To do so, the administration should commit to funding a nonprofit clean energy Accelerator—based on the proven green bank model that invests resources into clean energy projects across the country. To get this done, Biden will need to wrangle with a divided Congress to get legislation passed.

Luckily, Congress has already shown it supports this idea. The clean energy Accelerator would be based on the National Climate Bank Act, which passed the U.S. House of Representatives with bipartisan support this year. It’s a smart, one-time investment that will pay dividends for years to come. 

A nonprofit Accelerator will create 500,000 jobs with strong labor protections for every $10 billion of public capitalization, across seven sectors of infrastructure. Because it pairs public dollars with private sector dollars, this model allows for an outsized impact.

Biden’s stated climate plans overlap significantly with the benefits on offer from a clean energy Accelerator. On the issue of infrastructure, his plan calls for the creation of “millions of good, union jobs rebuilding America’s crumbling infrastructure.”

On the auto industry, Biden calls for the creation of “1 million new jobs in the American auto industry, domestic auto supply chains, and auto infrastructure, from parts to materials to electric vehicle charging stations” and more. An Accelerator will provide financing to businesses and consumers to adopt electric vehicles, spurring demand for American manufacturing.

On transit, Biden wants to “provide every American city with 100,000 or more residents with high-quality, zero-emissions public transportation options through flexible federal investments.” A clean energy Accelerator will finance conversion of public vehicle fleets, including busses, to electric vehicles, using innovative EV-fleet-as-service models to overcome adoption barriers.

In the power sector, Biden wants to “move ambitiously to generate clean, American-made electricity to achieve a carbon pollution-free power sector by 2035.” An Accelerator will mobilize private sector investment into multiple forms and applications of renewable power, including distributed solutions, in order to increase renewable power market share six-fold, which is required to reach the 2035 target.

When it comes to how Americans heat and power their homes and businesses, Biden has called for us to “upgrade 4 million buildings and weatherize 2 million homes over four years … by funding direct cash rebates and low-cost financing.” A Accelerator is the best practical means of accomplishing this goal,  by working with lenders, housing agencies, weatherization partners and others to make buildings more comfortable with lower energy costs overall.

On housing, Biden wants to “spur the construction of 1.5 million sustainable homes and housing units.” A Accelerator will finance home electrification efforts to ensure new buildings are built to be sustainable from the ground up.

On agriculture and conservation, Biden wants to “create jobs in climate-smart agriculture, resilience, and conservation.” A Accelerator is specifically authorized to invest in natural climate solutions in forestry and agriculture, and can invest based on the necessary decades-long time horizon to make these projects work.

And on environmental justice, Biden’s goal is to “ensure that environmental justice is a key consideration in where, how, and with whom we build—creating good, union, middle-class jobs in communities left behind.” A Accelerator will have a specific mandate to direct 40 percent of its investment into underserved, frontline and communities of color, and as a nonprofit has particular capabilities to target investment into specific communities.

Every one of these goals is important for creating jobs, for climate and for justice. And every one of them needs a practical, proven and fast-moving implementation strategy to actually get the job done. The Accelerator, based on a decade of green bank experience, is the no-regrets policy needed to achieve these goals. Throughout his time in public service, Biden has sought to bring policymaking in line with his—and our—ideals of what this country can be when it is at its best. Now, as president-elect, he has another opportunity to do so through a new clean energy Accelerator. 

By Coalition for Green Capital

There is consensus in the climate community that investments to combat climate change must prioritize communities of color, front-line communities, fence-line communities, low-income communities, historically disinvested communities and rural communities and enable a just transition to a clean future.

Today, the Coalition for Green Capital is releasing a new white paper illustrating how a National Climate Bank would expand on the success of state and local green banks efforts to invest in these communities, while opening up entirely new pathways for job and business creation in the most climate impacted communities.

The report is part of a series from CGC which analyzes the potential impact of a National Climate Bank, providing details, context and recommendations on its workings.

The full white paper is available here. 

By Coalition for Green Capital

The Nicholas Institute for Environmental Policy and the Coalition for Green Capital hope to organize a nonprofit in the next several weeks to form the basis of a green bank to be called the North Carolina Clean Energy Fund.

The proposed fund would aim for $100 million to $150 million in capitalization to underwrite or help establish small clean energy and energy efficiency programs that ordinarily fail to attract support of traditional financial organizations.

“It is estimated that, with $100 million in seed capital, a Green Bank in North Carolina could create 15,000 jobs within its first five years with no other state or federal policy changes,” Weiss writes with Hanna Betnecke and Jill Bunting. “Not only that but as initial investments are repaid and then reinvested by the Green Bank, job creation would continue at approximately the same rate.”

Read the full story or read CGC’s Twitter thread about the story. 

By Coalition for Green Capital

DURHAM, N.C. — A North Carolina Clean Energy Fund would support economic recovery from the COVID-19 pandemic by equitably investing in clean and efficient energy solutions for the state, according to a new market assessment from Duke University’s Nicholas Institute for Environmental Policy Solutions and the Coalition for Green Capital (CGC). The fund could be seeded by a National Climate Bank, which has passed the U.S. House of Representatives with $20 billion, and now awaits Senate consideration.

The assessment estimates that $100 million in funding could catalyze private investment in clean energy and energy efficiency projects, potentially leading to creation of 15,000 jobs in North Carolina within the fund’s first five years of operation. For comparison, an estimated 21,000 clean energy workers, or roughly a fifth of the state’s pre-pandemic clean energy workforce, remained unemployed in North Carolina as of July. Any new jobs created by a Clean Energy Fund would support a range of projects to help meet the goals of the N.C. Clean Energy Plan — a 70 percent reduction in greenhouse gas emissions from the electric power sector below 2005 levels by 2030 and carbon neutrality by 2050.

“The North Carolina Clean Energy Plan reflects a consensus vision for combating climate change in our state while building a prosperous clean energy economy,” said Sushma Masemore, state energy director and deputy assistant secretary at the N.C. Department of Environmental Quality. “The Clean Energy Fund will encourage investment in innovative solutions to both reduce carbon emissions and put North Carolinians back to work.”

Formation of a N.C. Clean Energy Fund was among the top recommendations of the N.C. Clean Energy Plan, as well as two parallel stakeholder processes in 2019 — the N.C. Energy Efficiency Roadmap and the Department of Transportation’s Zero Emission Vehicle Plan. Also known as green banks, clean energy funds incentivize private investment in clean energy projects by addressing and alleviating market barriers, specifically for underserved communities and nascent technologies.

In November, the Nicholas Institute and CGC met with a diverse set of stakeholder groups to discuss perceived financing gaps in clean energy and energy efficiency that a clean energy fund could fill. The conversations cited a range of potential projects throughout the state, including renewable power, building efficiency, and clean transportation.

“A North Carolina Clean Energy Fund provides a unique opportunity to catalyze investment in emerging clean energy markets and fill crucial financing gaps for vulnerable populations,” said Jennifer Weiss, senior policy associate in the Nicholas Institute’s Climate and Energy Program. “By providing technical assistance and credit enhancements, the fund can reduce the risk for private investors.”

There are four key roles a Clean Energy Fund could play in the North Carolina energy market to increase access to clean and efficient energy solutions:

• Connector in the market to provide technical assistance
• Risk mitigator by partnering with commercial lenders to expand access through credit enhancements
• Direct lender in order to expand the market to projects that otherwise could not be financed
• Bundler to aggregate small projects to meet scale to attract private capital

In addition to lowering market barriers, clean energy funds also provide more equitable access to the benefits of clean energy, such as improved health outcomes and reduced financial burdens from energy costs, according to the Nicholas Institute-CGC assessment. That could be achieved by earmarking a portion of the fund’s spending for low-to-moderate income communities or incentivizing or prioritizing those communities for investment.

“The data in this assessment supports what we’ve long-believed: green banks can help alleviate the disproportionate energy burden low-income communities often face,” said Marilynn Marsh-Robinson, manager of partnerships and outreach at Environmental Defense Fund. “By offering low-cost financing options for both renters and homeowners, we can help all North Carolinians get access to affordable capital to make their homes more efficient and lower their power bills. Further, by getting more projects like this off the ground, we help put people back to work, employing those in the communities where services — and jobs — are needed.”

Over the coming months, the Nicholas Institute and CGC will host informational panels on the possible structure of and financing sources for a N.C. Clean Energy Fund. The process will engage a wide range of stakeholders: state and local government agencies, the environmental advocacy community, clean energy organizations, commercial capital providers, community development finance institutions, community groups and private foundations.

Clean energy funds can take a variety of forms depending on the market gaps, policy priorities and budgetary landscape in a particular state or region. The assessment found that a nonprofit organization supported by public policy “seems most likely to yield results supportive of a clean and efficient energy economy” in North Carolina and quickly spur job growth.

Based on the market needs identified by stakeholders and experiences in other states, the assessment recommends at least $100 million in seed capital for a N.C. Clean Energy Fund. In addition to the National Climate Bank, other capital sources could include private foundations, social impact investors, and public money from the state.

“North Carolina already knows first hand that clean energy investment is a huge job creator. A dedicated Clean Energy Fund will deliver those economic benefits to every corner of the state. And the timing couldn’t be better, as the National Climate Bank gets closer to passage, so the North Carolina Clean Energy Fund should get ready to deploy hundreds of millions of those dollars,” said Jeff Schub, executive director of the Coalition for Green Capital.

The market assessment was written by Weiss; Hannah Beinecke, program director of the Coalition for Green Capital; and Jill Bunting, deputy director of the Coalition for Green Capital. The full report, “How a Green Bank Can Drive the North Carolina Clean Energy Economy: A Market Opportunity Overview,” is available at nicholasinstitute.duke.edu/publications/how-green-bank-can-drive-north-carolina-clean-energy-economy-market-opportunity.

The report’s authors will discuss the concept of a North Carolina Clean Energy Fund in more detail during a webinar on Nov. 17, at 1 p.m. More details and registration information are available here.  

Note to broadcast editors: Duke University maintains two television studios with LTN and satellite connectivity, plus two radio studios with ISDN and Comrex connectivity. Both are available for domestic and international interviews, live or taped. These services are usually available during normal business hours and, with enough advance notice, after-hours and on weekends. Broadcast reporters should contact Jeremy Ashton to arrange an interview.

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READ THE REPORT

 

By Jeffrey Schub

Last week, Canadian Prime Minister Justin Trudeau announced a new stimulus plan that invests heavily in climate-related infrastructure to address the on-going economic crisis created by COVID-19. The plan calls for CAN$6 billion of new investment through the nation’s recently-created Canada Infrastructure Bank (CIB). The investment will flow into renewable generation, storage, building retrofits, zero-emission buses, and vehicle charging infrastructure.

This is precisely the strategy and institutional framework the US should implement through the National Climate Bank (NCB). Adjusting for currency and the size of the economy, the equivalent public investment in the U.S. would be approximately $45 billion. And then further adjusted for the fact that this new CIB clean infrastructure investment only covers roughly half of the sectors the NCB is meant to cover, the true equivalent capitalization of the NCB would be approximately $100 billion.

Michael Sabia, Chair of the CIB said, “One of the defining features of the Canada Infrastructure Bank is attracting private investment to new infrastructure. Every dollar of public investment in these initiatives is intended to attract additional dollars from private and institutional investors. In that way, the CIB can have bigger impacts that benefit Canadians and Canada’s economy.”

American policymakers need to look at stimulus in the U.S. through the exact same lens. The U.S. needs genuine stimulus, not only economic relief, to bring back the millions of jobs that have been permanently lost. But that public investment should be strategic and efficient. This means the jobs created should be in industries with a social benefit, and the public funds should catalyze as much private investment as possible.

That is the model proven out by green banks around the U.S. and proposed by the NCB. Third-party analysis found that the NCB can drive up to $500B of total investment in its first five years, and create over 5 million jobs. This is based on the extensive experience of green banks, that have driven roughly 3 dollars of private investment at the project level for each green bank dollar deployed.

Legislation to fund the NCB has now passed the House of Representatives twice in the last few months. It is endorsed and co-sponsored by VP-candidate Kamala Harris. And it is supported by strong margins by voters of all parties.

U.S. emissions per capita are higher than in Canada. And the U.S. economy shrank nearly 3 times more than Canada’s in Q2 2020. If Canada is aggressively moving forward with climate-focused stimulus through a dedicated public-private investment structure, surely the U.S follow their lead.