A Clean Energy Economy, Achieving the Dream
By Holly Testa, Director, Shareowner Engagement
The Environmental Protection Agency (EPA) recently issued Carbon Pollution Standards for new power plants as directed by President Obama as part of his Climate Action Plan. The new Carbon Pollution Standards are part of a broader effort that should serve to accelerate the shift away from heavily polluting electricity generation toward renewable energy and a lower carbon economy.
While standards for new power plants are a step in the right direction, standards for existing power plants will not be announced until June 2014, and these will be a key element in the success of any plan to reduce carbon emissions. A new report provides the dirty details—that a significant portion of our carbon pollution comes from a relatively small handful of outdated, highly polluting power plants. In fact, about 30% of all power-sector carbon dioxide emissions in 2011 came from the 50 dirtiest power plants; about half came from the 100 dirtiest plants; and about 90 percent came from the 500 dirtiest plants of the nearly 6,000 currently in operation.
We expect to hear a chorus of vested interests claiming that tougher carbon pollution standards will spell economic ruin. As an institutional investor responsible for careful stewardship of the investment assets of our many individual and institutional clients, we believe that the ultimate outcome of effective implementation of these standards will not result in economic harm, but rather, will present us with substantial economic opportunity and growth potential.
The Carbon Pollution Standards offer significant health and safety benefits as well as enormous opportunities that investors and business executives would be wise to consider. Indeed, the standards offer investors what they crave most: certainty. National carbon pollution standards for electric power plants that will send long-term market signals to drive greater investment in lower-carbon electricity power generation and help spur the transition to a clean energy economy.
Colorado’s experience flies in the face of the predictable and tired arguments—that government action to limit pollution will “kill” jobs, destroy the economy, cause electricity prices to skyrocket, and provide no benefits whatsoever to the American people. For example, the Colorado Renewable Energy Standard has helped build renewable energy generation equivalent to the output of two nuclear power plants while employing over 20,000 people. Colorado is also home to the third largest solar photovoltaic market and the 12th largest wind market in the U.S.
We are in the midst of a shift in our thinking regarding climate change, and the business risks and opportunities it holds. The benefits of transitioning to renewable energy sources extend beyond economics—to health, quality of life, and the futures of our children and their children. The Carbon Pollution Standards, properly implemented, are an essential ingredient to this transformation and can provide significant opportunities and benefits to consumers, companies and governments now and for generations to come.
Mention of specific companies or securities should not be considered a recommendation to buy or sell that security. Past performance is no guarantee of future results.
Posted: September 30, 2013