As we prepare for the start of the Biden Harris Administration, Confluence Philanthropy members hold a unique position as investors, job creators and trailblazers within the clean energy finance sector. Confluence members have the opportunity to leverage expertise and to advocate for policy reform and other governmental action to advance public- and private-sector efforts to accelerate President-Elect Biden’s ambitious Clean Energy Plan. The plan includes: on day 1, rejoining the Paris Agreement and initiating reversal of damaging executive orders; within the first 100 days, hosting a global climate summit for countries to come together to make more ambitious national pledges; and “to enact in 2021 legislation that, by the end of his first term, puts us on an irreversible path to achieve economy-wide net-zero emissions no later than 2050.”
During our recent Coffee Klatch on the Biden Clean Energy Plan, Confluence members identified a series of policy considerations and recommendations to support decarbonization objectives, including offering some additional member-recommended resources. In addition to those specified in the attached list (available here), there are two catalytic measures needed to meet the speed and scale necessary to advance the Biden energy goals and to reach net zero by 2050. The first is a national price on carbon which is long overdue to address the harm caused by greenhouse gases. The second is state regulatory realignment with clean energy goals to ensure a level playing field for clean, least cost, more resilient and often highly distributed solutions. With the power sector primarily regulated at the state level, too many state officials are stymieing decarbonization and decentralization and other resilience solutions, often to protect recalcitrant legacy actors, many of whom are utilities. Most states are moving far too slowly to bring the cost, reliability and job-creating potential of a cleaner and more resilient grid to fruition. A price on carbon and state regulatory modernization are critical to unleashing vastly greater private investment in clean energy and related climate-solutions, and to meeting the potential of this moment, a moment created by the confluence of technology innovation and rapid price declines, financial innovation, investor appetite, and now, political leadership.
In a Biden-Harris Administration, even with only the first few key climate-related appointees named, it is clear that climate solutions investors will have allies with whom we can work to mitigate the worst harm of the climate crisis. We have a transformational opportunity - and duty - before us to accelerate our deployment of capital at this time of new leadership and ensure that the governmental measures being taken to advance climate solutions will unleash the pent-up private capital at the speed and scale that the science requires. We can build on the lessons we have learned as early investors and entrepreneurial facilitators of capital. Together, along with our government, we will ensure that we create the 10 million good-paying, middle-class, union jobs. We can redress environmental justice by targeting jobs for those most in need, and fuel a transition that enables the communities who powered our past industrialization thrive in this new era.
Pictured: Aimée Christensen, Director, Christensen Family Office, speaks about the growth of the green enery sector.
What we can do: Philanthropy / Investment / Advocacy
To realign state regulations as called for above, philanthropy can support state and regional advocacy groups (e.g., Idaho Conservation League, Southern Alliance For Clean Energy) as well as national organizations that work on the state level, (e.g., Vote Solar). To support the passage of federal climate legislation, we can fund advocacy, communications and movement building. Some foundations who recognize the urgency of the need to scale up clean energy and climate solutions are choosing to spend down their resources, including Confluence members The Compton Foundation and Wallace Global Fund. A way to ensure that those more accelerated deployments of resources continue to last is to make some of those grants in the form of Program Related Investments (PRIs) which can come back and be redeployed; this is particularly promising for financing smaller scale community-based resilience projects such as energy efficiency and solar for affordable housing, solar thermal for smaller food producers’ greenhouses to extend their growing season and save money, reducing the footprint of our food system along with energy system. There are also funds that bundle such opportunities, such as the Solar and Energy Loan Fund (SELF), which meets Florida’s needs including for solar and energy efficiency as well as storm resilience such as roofing, and the incipient Impact Idaho Fund (IIF) focusing its pilot on food and farming, but with a pipeline including solar and microgrid installations for municipalities and nonprofits who can’t benefit from the solar investment tax credit (ITC). (One of the recommendations from our work session is to bring back the Obama-era cash grant option for the ITC, which will be a powerful tool for enabling bringing solar to those most in need and for governmental resilience projects). Talk to Confluence member and Coffee Klatch participant, Kerry O’Neill, about SELF as Inclusive Prosperity Capital is a SELF partner, and talk with me about the IIF which is being incubated by the Sun Valley Institute for Resilience which I founded and where I continue to serve on the board.
In addition to these distributed, place-based opportunities for blended capital -- leveraging philanthropy for policy advocacy to get the rules right, and mobilizing capital to projects and communities often overlooked -- Confluence members can accelerate their impact by aligning all investments with clean energy and climate opportunities, ensuring that our portfolios are fossil-fuel free and resilient. Last month, the Net Zero Asset Managers Initiative announced that their members, with assets under management of over $9 Trillion, are aligning their assets to net zero by 2050 or sooner, and as we’ve seen from some of our fellow Confluence members and heard from Mercer and other advisers, we can structure portfolios to be diversified and also climate smart. The Federal Reserve has put investors on notice with their recent statement that climate is a financial stability risk, and Confluence can help other asset owners and managers develop their roadmaps for shifting their capital to mitigate risk and maximize opportunity.
Finally, in addition to deploying our capital to help accelerate the clean energy transformation, we need to be advocates. By raising our voices as investors and supporting our portfolio companies and grant recipients to raise theirs, we can help to build the power needed to advance federal climate legislation and state regulatory reform, to inform federal policies and programs, and to shape local and state governmental leadership as well. We should commend the Congress for the passage of the bicameral Energy Act of 2020 included in the recovery package at the end of last year, while also advancing the bicameral and bipartisan legislation to create a Department of Energy Foundation which would support organizations and entrepreneurs to bring clean energy technologies to market through local and regional partnerships. This provision was included in the House passed energy bill, but dropped from the final agreement with the Senate.
We should advocate for the Biden plan’s provisions to support communities suffering from the impacts of our past energy system and challenged by the current transition. The Coffee Klatch discussion pointed to the need to stand with communities and workers impacted by the changing energy market, including by increasing coal companies’ payments into the black lung benefits program, reforming the black lung benefits system so it is no longer rigged in favor of coal companies who can hire lawyers and doctors to ensure miners’ benefits are denied, expanding efforts to help miners detect black lung cases earlier and access care, and enforcing regulations to reduce cases of black lung in the first place. One suggestion from our discussion was the establishment of a task force to help these communities to access federal investments and leverage private sector investments to help create high-paying union jobs based upon the unique assets of each community, partner with unions and community colleges to create training opportunities for these new jobs, repair infrastructure, keep public employees like firefighters and teachers on the payroll, and keep local hospitals open.
The Power of Confluence
As a community of committed climate impact investors, we must leverage all of our assets -- our philanthropy, our investment dollars and our voices -- and political power. With a change of administration in Washington shortly, and this clean energy plan as a roadmap, we have an opportunity - and a duty - to do so. The Confluence community is well poised to take on this call to action, and to use our experience, commitment, and expertise in values aligned investing to make a difference. There will be specific moments ahead when we will need to come together to design new solutions to ensure the Biden plan’s greatest effectiveness for the climate, equity and health. We can count on Confluence to support us as these opportunities arise, and I look forward to collaborating with you to meet this moment.
For the policy considerations and recommendations Confluence members already identified coming out of the December Coffee Klatch
click here.
