Trump Can’t Kill Clean Energy
State-level action will move climate and energy policy forward in spite of Republican-controlled Washington
It’s worth repeating: President-elect Donald Trump will be the only head of state in the world to reject the science of climate change. American voters — well, about 27% of them — have elected a man who plans to rescind our country’s international climate agreements, starve clean energy research programs of all necessary funding, block the Obama administration’s Clean Power Plan, and possibly remove the Environmental Protection Agency’s ability to regulate carbon emissions. Throughout his campaign, Trump promised to prop up coal producers against the headwinds of the free market that have steadily pushed the energy sector toward natural gas and renewables. And as an opening act, he chose climate change denier Myron Ebell to lead his EPA transition (demolition?) team. These moves are part of the Trump team’s broader scheme to “erase the Obama presidency” from day one — all at a time when scientists and world leaders urge that immediate, drastic action is necessary to avoid falling off the proverbial cliff.
On election night, all hope of keeping global temperature increases below 2C — the level at which we may be able to stave off catastrophic damage from climate change — was likely lost. If Trump follows through on his promises to dig, drill, and dismantle the fragile progress made on climate, other countries will need to pick up the slack; the carbon budget for the rest of the world could drop to zero.
The world does have a plan to deal with climate change: Last year, the United Nations’ COP21 meetings in Paris marked a phase-change in the climate movement when 174 countries came together with plans to significantly reduce global carbon emissions for the first time. The deal may not be enough on its own to achieve the sub-2C target, but it is the single best chance we have toward that end. Trump has promised to cancel the agreement — which President Obama joined by executive order this September — during his first 100 days in office. Undeterred, UN Secretary-general Ban Ki-moon remained optimistic about the climate pact:
“When [Trump] creates his transition team with experts and people with vision and expertise, I am sure that the United States will continue to play a leading role.”
Unfortunately, those ‘experts’ will include a band of science-deniers and fossil fuel lobbyists: See Trump’s pick to lead the DOE transition, Koch-funded lobbyist Mike McKenna, and note that Trump’s EPA transition head Myron Ebell once described Pope Francis’s words on climate change as “leftist drivel.” Seriously.
Even if Trump doesn’t formally remove the U.S. from the accord, which will take time and political maneuvering, the next President can in many cases simply direct his staff and the EPA not to follow through on the specific measures initiated by Obama — effectively neutering our commitment. Within the U.N., the pact remains intact as long as 55 countries representing 55% of global emissions ratify it, and the exit of the U.S. would not break that balance on its own. A Chinese official recently reaffirmed the country’s commitment to meeting carbon targets, with or without U.S. involvement, and China may even take a leadership role in the international effort. However, political winds can change direction and other countries may not take the same line. In any case, it looks like the EU, Japan, and China are not yet willing to offer additional emissions cuts to make up for the States’ possible policy reversal.
To preserve the climate pact and avoid retaliations like the carbon tariff on U.S. goods proposed by Sarkozy, advocates and state leaders must make the case to the international community that the U.S. will continue to move toward the goals set out in Paris — a proposed 26-28% decrease in U.S. carbon emissions by 2020, compared to 2005 levels — even without federal support. The country will move toward this goal even with a belligerent White House due to the strong economics of clean energy, energy efficiency, and the market forces that are already weakening coal production. With additional state-level action, more progress is possible. In President Obama’s words, “40% of the country already lives in states that are actively pursuing what’s embodied in the Paris agreement and the Clean Power Plan.”
Moving forward, a new coalition of NGOs, advocacy groups, business leaders, city and state governments, and political movements must join their voices in one clear message: We are committed to meeting our international climate commitments, the next White House be damned.
Local action and the private sector
Historically, much of the momentum in clean energy policy has come from the cities and states, driven by a dedicated environmental movement, renewable industry advocates, and others in the business community whose interests aligned to support sensible policy measures. In this case, what used to be a bug is now a feature.
The private sector is a strong ally; the largest companies in the U.S. and the world have now made renewable energy a top priority. Walmart has committed to receive half its power from renewable energy by 2025. Amazon, Google, Microsoft and Dow Chemical combined contracted for over 1000MW of wind capacity in 2016 alone — that’s more generating capacity than the country of Jamaica. We’ve even seen major Las Vegas Casinos defect from the grid in a grand bet on renewable energy. These trends are driven by economics, not environmentalism.
But even with strong private-sector support, we know that governments must take action to support renewable energy to achieve the deep decarbonization necessary to mitigate climate change.
With Trump in the White House, that challenge will fall increasingly to the states. That’s not a death sentence; over the next four years, coalitions of supporters will continue to enact change on the local level as they have done in the past. Cue the elevator music:
- Twenty-nine states have enacted renewable portfolio standards, which mandate a portion of energy to be generated from renewable sources.
- Forty-one states have mandatory net metering rules that enable customers to sell excess solar energy generation back into the grid.
- Thirty-three states have passed enabling legislation for Property Assessed Clean Energy (PACE), which opens up new financing possibilities for homeowners and business owners to invest in a broad range of renewable generation and energy-efficient equipment.
- California has pioneered state-level fuel efficiency standards, building efficiency codes, and even an international carbon trading system.
- New York is at the forefront of efforts to reform the electric power industry so that utilities’ incentives are aligned to promote distributed energy generation.
- Red states like Iowa, South Dakota, North Dakota, Kansas, and Oklahoma lead the country in electricity generation from wind.
Progress at the local level is, and will be, hard-fought. Last year, in an effort led by Nevada’s main utility NV Energy, net metering came under fire in the state, which dismantled the policy — a blow to the economics of rooftop solar for millions of homeowners. But fierce advocacy can overcome the monopolistic forces that seek to dismantle progress on the state level: Look at Florida’s grassroots defeat of the deceptive utility-funded ballot measure “1 for the sun” last Tuesday.
The silver lining to Trump’s win is that it may serve as a rallying call for people to get involved, to advocate for sensible policy in their communities, and to protect the progress we have already made on those fronts.
Private investment
Bloomberg New Energy Finance estimates that over the next 25 years, $12.1 trillion of investments in renewable power generation globally will be necessary to meet international carbon targets. Solar, wind and energy efficiency are ready for mass deployment, but the availability of financing, and financing structures that appeal broadly to consumers, are hangups. In the U.S., state policy can create a more favorable, stable environment for investors in renewable energy and energy efficiency in a few different ways.
State-sponsored Green Banks provide one pathway. These public-private institutions can accelerate large volumes of investment through loan loss reserves, bond issuances to fund energy projects, early-stage investments in innovative startups, or by creating program structures like commercial Property Assessed Clean Energy (C-PACE) and opening them up to private investment. Connecticut’s Green Bank has invested $165.8 million of ratepayer funds since 2011, which seeded an additional $491.2 million of private investments in clean energy and energy efficiency projects. New York’s Green Bank has supported almost $520 million of clean energy projects with a 4:1 private-to-public funding ratio. Green Banks, Port Authorities, and economic development institutions have also spurred C-PACE, which has financed over $300 million so far. In a prescient move, some of these institutions have already joined an international coalition, The Global Green Bank Network, which is expected to mobilize investments totaling $40 billion worldwide.
In an effort almost entirely funded by private enterprise, providers of residential PACE financing have provided about $3 billion for solar and efficiency upgrades, and this market is growing fast. PACE providers are able to bundle thousands of PACE assessments into larger Green Bonds, which they offer to institutional investors looking for steady, long-term returns. This option, a form of asset-backed securitization (ABS), opens up the possibility to direct hundreds of billions if not trillions of dollars toward energy efficiency and solar projects over the coming years. Solarcity and Spruce Finance have also used the ABS model to fund a combined $750 million for residential solar projects, about 40% of which was issued in 2016.
The U.S. mortgage and car loan industries use the ABS model to fund over $2 trillion annually, which dwarfs the amount needed to transform the energy sector of the entire world.
It’s worth telling the untold story of the jobs revolution stirring in solar, wind, and energy efficiency that’s driven by these types of private investments. There are now almost 210,000 people working in solar, and that number could double over the next four years. And according to the Bureau of Labor Statistics, “wind technician” is the fastest-growing job category in the U.S.
It doesn’t hurt that 90% of the materials used in energy efficiency retrofits are made in the USA, either.
Donald Trump proposed an antithetical option when he promised to bring back jobs with a rally on coal, but not even Mitch McConnell is sure if ending the so-called “war on coal” will resurrect those jobs. Real job-creating investments in renewable energy, energy efficiency, and smart grid technology will bring advanced manufacturing jobs into the U.S. and fund build-outs of useful physical infrastructure that increases the resiliency of the electric grid and saves Americans money.
Moving forward
For now, the Senate’s filibuster looks like the only chance of checking the right’s agenda in Washington, but the outlook is better at the state level where activist movements can make a greater difference.
Let’s continue the important work on state initiatives such as reforming the utility sector, supporting clean energy financing, preserving net metering, implementing time-of-use electricity rates, transportation fuel efficiency standards, renewable portfolio standards, appliance efficiency standards, electric vehicle incentives, building efficiency codes, and putting a price on carbon, to start.
Let’s encourage all those concerned with social and environmental justice to involve themselves in the political process and make their voices heard — in these fights and many others.
To that point, Sierra Club’s Michael Bruce issued a warning: “Trump must choose wisely or we’ll guarantee him the hardest fight of his political life.” It’s fair to say that fight is already guaranteed — but when millions of Americans unite to bring about change, progress is inevitable.
