I listened to a webinar this week about the future of the energy industry. It reminded me of a panel discussion I attended at the University of Chicago’s Annual Economic Outlook luncheon in 2012 when a Toyota executive was predicting that the majority of vehicles in 2050 would still be burning gas even if many of them might be hybrids. My view then was that it was extremely irresponsible to tell 1500 business executives, mostly MBA’s from the U of C, that this was a likely future. Eight and a half years later, it is clear that my perception was right.
The webinar I listened to this week was also partly sponsored by the U of C. Despite it being my Alma Mater, where I earned my MBA, I think it again is promoting an extremely unlikely narrative. The vision was that by 2050 we would still be using around 40% of the oil that we are using today. Granted, there are many uses of petroleum besides burning it in vehicles. Nevertheless, if we are still using this much oil in 30 years I think the planet is doomed.
I find that when you ask industry insiders about the future they can’t see the forest for the trees. They use all this great data but fail to take into account outside factors like disruptive technologies. Or also in this case, a dramatically changing social environment driven by climate change.
Technology is not only changing faster and faster but so are social norms. The world has woken up to the enormous threat of climate change and governments are reacting in dramatic fashion not only from the top but also at the grassroots level. Regulations and incentives are coming into play as are changing public attitudes.
This in turn is driving investments and finances.
“U.S. investments accounting for social and environmental risks have surpassed a record $17.1 trillion, a 42% increase since 2018…
That means roughly one-third of U.S. assets under professional management are being invested with an eye toward issues such as battling climate change, addressing biodiversity loss and protecting workers’ rights”
“climate change is only becoming more important “in terms of stranded asset risks and people wanting to invest in the next generation of clean energy tech and production and carbon mitigation.””
And elections have consequences. One that is becoming increasingly consequential is how individual municipalities decide to get their power.
“Local races can go a long way toward changing how Americans get their electricity.”
““We’ve seen a big grassroots push for state and national action on climate. In the meantime, cities and communities have sought out creative ways to make change from the ground up where possible,””
While federal and state governments may be failing to take action to address climate change, citizens (voters) at the local level are taking matters into their own hands. As I’ve also described before, this is just one element of the society turning against fossil fuels and pretty soon there will be NO capital available for fossil fuel companies and not a big enough market for their product for them to make a profit.
Bottom line: just like the dates for adaptation of renewable energy and electric vehicles keeps getting brought forward so it will be with the decline of oil demand.
U.S. Sustainable Investments Hit a Record $17T — Report
Avery Ellfeldt, E&E Reporter
November 17, 2020
That means roughly one-third of U.S. assets under professional management are being invested with an eye toward issues such as battling climate change, addressing biodiversity loss and protecting workers’ rights, the organization said in a report released yesterday.
Driving the surge are organizations including money managers, pension funds, insurance companies and philanthropic foundations that are becoming sharply attuned to sustainability-related risks.
To mitigate those threats, many money managers now consider corporations’ environmental, social and governance (ESG) practices while investing their clients’ cash. They are also increasingly using shareholder resolutions to push sustainability laggards in a greener direction, the report said.
Sustainable finance has become “an integral part of the financial system, [because] it’s what asset owners and clients are demanding,” said Chris Phalen, the forum’s research manager.
Notably, while companies’ executive pay packages and anti-corruption efforts are receiving higher levels of attention, the report said that “climate change remains the most important specific ESG issue considered by money managers in asset weighted terms.”
Yesterday’s report is the latest signal that the boom isn’t likely to slow soon.
Morningstar Inc., for instance, in October found that so-called sustainable funds in the U.S. have attracted a record $30.7 billion in net investments so far in 2020. And it only took seven months for those funds to attract more investments than they did in all of 2019.
The growth comes despite recent moves by the Trump administration that critics say could stymie investors’ efforts to protect their dollars from modern risks — and, in some cases, use capital to have a positive impact on social and environmental issues (Climatewire, Oct. 2).
Lisa Woll, CEO of the Forum for Sustainable and Responsible Investment, is among those who said the moves by the Labor Department and Securities and Exchange Commission were “anti-ESG” and work against investors’ best interest.
President-elect Joe Biden, on the other hand, has indicated he intends to move in the opposite direction than the current administration, by requiring every public company to report their emissions and the climate risks they face (Climatewire, Nov. 13).
In Phalen’s eyes, that’s critical given that climate change is only becoming more important “in terms of stranded asset risks and people wanting to invest in the next generation of clean energy tech and production and carbon mitigation.”
Local Elections are Changing America’s Energy Mix, One City at a Time
Renewable energy just won in a few local elections
Justine Calma
November 4, 2020
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Local races can go a long way toward changing how Americans get their electricity. After yesterday’s election, both the city of Columbus, Ohio, and township of East Brunswick, New Jersey, are projected to pass measures that allow their local governments, instead of utilities, to decide where residents’ power comes from.
These “community choice” programs are boosting the growth of cheap renewable energy and are already prying loose investor-owned utilities’ tight grip on energy markets in places like California. More and more of these programs are popping up in states where they’re allowed, and they’re expected to grow beyond those borders in the future.
“We’ve seen a big grassroots push for state and national action on climate. In the meantime, cities and communities have sought out creative ways to make change from the ground up where possible,” Kate Konschnik, director of the Climate & Energy Program at the Nicholas Institute for Environmental Policy Solutions at Duke University, wrote to The Verge in an email. “Cities are also stepping up to demand cleaner and more locally sourced electricity, for themselves and for their residents.”
The measures that voters cast their ballots for in Columbus and East Brunswick yesterday allow local governments to decide what energy mix is available for their residents and use their collective purchasing power to bargain for cheaper rates. Utilities will still be in charge of getting that power to people but will no longer be calling the shots when it comes to deciding how much of that energy comes from renewables versus fossil fuels in places that have adopted community choice measures.
Community choice programs are one way of satisfying customers’ growing appetite for greener energy. East Brunswick’s ballots described the energy measure as a move to give its residents the “opportunity to select a 100% renewable electricity alternative” by 2030 — and stipulated that it would prefer purchasing from local sources. Existing programs in the US procured about 8.9 million megawatt-hours more renewable energy than state mandates required, according to an estimate from a 2017 report from the National Renewable Energy Lab. It shows how much local efforts matter when it comes to meeting the challenge of climate change, especially while the Trump administration has derailed national and international environmental efforts.
These programs can speed up the shift to renewables for a few different reasons. Some states have competitive energy markets that allow customers to shop around for renewable power sources. With community choice programs, individual customers don’t have to do that. The programs can corral entire communities into making the switch at once. And unlike utilities that might have long-standing contracts or investments in dirtier energy, new community choice programs have no such ties and can more easily diversify their energy portfolios. What’s more, renewables are cheaper than ever — in some places, even cheaper than fossil fuels. So even cities motivated more by cost savings than saving the planet could turn to cleaner sources of energy through community choice programs.
California, in particular, has seen a huge boom in community choice programs over the past few years. It’s partly a response to customers’ concerns about climate change as well as frustration with the state’s investor-owned utilities sparking wildfires and making preemptive power outages a new norm in the state. California’s community choice programs are turning to distributed renewable energy sources like virtual power plants that can make the grid more resilient in the face of threats posed by climate change. Californians in Berkeley and Albany are also awaiting results on whether local measures passed that would raise utility taxes for some customers in order to gather funds to reduce greenhouse gas emissions and prepare for disasters.
In the end, how much these community choice programs actually boost renewable energy depends on what each community chooses to buy. “[Customers in a community choice program] have a stronger connection to the decision makers than you do if you have an investor-owned utility buying your supply,” says Jenny Heeter, a senior energy analyst at the National Renewable Energy Laboratory.
