The Sustainability Buzz

2016 — The Real Work Begins

Eiffel TowerWelcome to 2016, the year with the best chance so far of concerted progress towards sustainable improvement in the U.S. and the world! What will it mean for you, your company and your world?  Let’s take a look back at what happened in 2015 and see how that positions us for the new year.

There were two significant events in the sustainability world in 2015 – the Paris Conference on Climate Change COP21 and the release of the US EPA Clean Power Plan. COP21 ended with a global agreement among more than 190 countries to take legally binding steps to combat the effects of climate change.  An agreement of this breadth has seldom been seen in world history, ranking along with the creation of the United Nations, the World Trade Organization and Bretton Woods.

The agreement, which includes legally binding requirements, commits its signatories to:

  1. Employ all possible measures to keep global temperature rise below 2 degrees Celsius, with an even more ambitious stretch goal of 1.5 degrees Celsius.
  2. Provide a detailed, structured plan to reduce CO2 emissions every year. These plans must put forward a target, explain the target, and identify standard means of measuring carbon inventory and reporting reductions so that the rules for counting emissions are transparent. This portion of the agreement is legally binding.
  3. Assist developing countries to achieve their targets, including providing technology, financing and other support. The Green Climate Fund serves as the primary mechanism for funding projects focused on helping developing countries in particular meet their targets.

As a corollary to the COP21 agreement, Bill Gates and Mark Zuckerberg announced the creation of the Energy Breakthrough Coalition, to facilitate “large funding commitments for basic and applied research.” According to its site, the coalition will also focus its investments on “early stage companies that have the potential of an energy future that produces near zero carbon emissions and provides everyone with affordable, reliable energy.”

In addition, Bill Gates and President Obama have announced the creation of Mission Innovation to double the public investment in energy research from $10 to $20 billion over the next five years.  Nineteen governments have already signed onto Mission Innovation, including China, India and the U.S.

All of this points to the clearest market signal so far that clean energy production and the development of new clean energy technology will dominate global investment now and for the foreseeable future.  Extraordinary global market opportunity will be created for exporting technology for clean energy, overtaking fossil fuel by 2030.  Unlike in the U.S., other governments have not been questioning the need for change in fundamental energy policy. This translates to an export market eager to capitalize on new energy technologies.

Beyond just the energy sector, the COP21 agreement foreshadows an accelerating decline in coal, an increase in onshore manufacturing due to the enormous carbon impact of world-wide shipping, tighter CAFE standards which ultimately reduce transportation costs, and increased investments in infrastructure that supports carbon “sink” projects, such as sustainable forestry and reforestation.

And closer to home?  That’s where the Clean Power Plan (CPP) comes in.  Each signatory to COP21 is required to produce an Intended Nationally Determined Contribution (INDC), basically the structured plan mentioned in item two above.  For the U.S., that plan is the Clean Power Plan.

The CPP was announced in August 2015, the first-ever national standards that address carbon pollution from power plants.  The final rule was developed following more than 4.3 million comments received by the EPA on the draft version.  It provides a framework for moving from fossil fuels to clean energy between now and 2030, targeting a 32% reduction in carbon emissions from the power sector by that date.

The most effective component of the CPP is the flexibility for each state to develop its own compliance plan, using a combination of approaches that works best given each state’s current energy mix.  Each state has its own reduction target as identified by the EPA in collaboration with the state.  The Plan’s flexibility permits a state to construct a plan that could improve current power generation efficiency, reduce demand at the consumer level, invest in and expand clean energy production, some combination of those or other creative approaches as long as it reaches the target reduction.

Another component of the CPP permits states to work together on multi-state approaches, including emissions trading.  From the EPA’S description of the Plan’s components, this will “allow [each state’s] power plants to integrate their interconnected operations within their operating systems and their opportunities to address carbon pollution.” The ultimate goal of the flexibility of the rule is, again in EPA’s words, “to reduce costs to consumers, minimize stranded assets and spur private investments in renewable energy and energy efficiency technologies and businesses.”

For American business, that means stability in the direction that public policy will take over the next fifteen years.  We’ve often discussed how the unknown in business can increase risk and cause businesses to be unwilling to take action for fear of what might be coming. The CPP removes that risk by outlining a clear path to a clean energy environment, encouraging businesses to expand with greater certainty.

There has been some concern about the future of the CPP because 20 energy companies and 27 states as well as other organizations have filed suit against the government to halt the CPP. The U.S. District Court of Appeals for the DC Circuit rejected those efforts last week to put the carbon emissions rule on hold. The CPP will remain in effect and implementation can begin while the lawsuits wind their way through the judicial system.

What can you do to support the Clean Power Plan?

First, you can learn more about it. This EPA Fact Sheet covers the history, contents and benefits of the CPP.  You can read more detailed information on the jobs and business impact of the CPP here.  Give some thought to how the CPP will influence your business and your life and then drop an e-mail or letter to your state legislator in particular, encouraging him or her to support your state’s development of its customized implementation plan.  Point out why the CPP is particularly good for you and your business.  Or give them a call.

2016 is when the work really begins on global sustainability. Until now, we’ve just been plowing the ground and planting the seed. It’s time to make sure it grows.

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