On Tuesday morning at the Palace Hotel in midtown Manhattan, a bipartisan group of heavyweights from the worlds of finance and government released a report called “Risky Business.” The report outlines a broad range of costly threats businesses across the country face from climate change, including higher sea levels that threaten coastal property and infrastructure, decrease in worker productivity due to extreme heat, and difficulty maintaining high crop yields for farmers in the Midwest and South.
What was particularly noteworthy about the report was the impressive group of business leaders who stood together behind the report’s daunting findings, including Henry Paulson, former chairman of Goldman Sachs and Treasury Secretary under George W. Bush:
Also signing onto the report were business luminaries like Gregory Page, chairman of the board of agricultural services company Cargill; Robert Rubin, former Secretary of the Treasury and Goldman Sachs co-chair; George Shultz, former Secretary of State under George H.W. Bush; Michael Bloomberg, founder of Bloomberg LP and former mayor of New York; and Olympia Snowe, a Republican who for decades represented Maine in the U.S. Senate.
“[I]f we act immediately, we can still avoid most of the worst impacts of climate change and significantly reduce the odds of catastrophic outcomes – but the investments we’re making today will determine our economic future,” Paulson said.
On Wednesday only a few blocks south of the “Risky Business” press conference, the American Council on Renewable Energy (ACORE) opened the Renewable Energy Finance Forum (REFF). A few hundred of the country’s top clean energy investors, developers, bankers, and entrepreneurs shared insights on the state of their industry.
Many identified middle market projects in the range of $25-$50 million as the current sweet spot in clean energy development. Many more said government policies have the potential to grow an industry that has matured since the first REFF was held more than a decade ago.
Here are comments business leaders said about the Environmental Protection Agency’s new Clean Power Plan while at the forum:
“We’re deliriously happy with what the EPA is doing.” (Jeff Weiss, co-chairman and managing director of Distributed Sun LLC, on the EPA’s Clean Power Plan)
“It’s enormously significant…because it does send those long-term [market] signals….Businesses need to reward lawmakers that are driving that direction.” (Michael Liebreich, CEO, Bloomberg New Energy Finance)
“I think that the EPA guidance isn’t the high bar, but it is a momentum builder. For the utilities, the light bulb is coming on. They’re taking a harder look.” (Mark Goodwin, president and COO, Apex Clean Energy Inc.)
Institutional investors at the conference agreed the clean energy asset class has matured from a niche asset into one that plays a bigger role in their companies’ overall portfolios.
Andrew T. Redinger, a managing director of Cleveland-based KeyBanc Capital Markets, said he looks at renewables as simply “power assets, not renewable assets,” a shift he called “a natural maturation.”
Meanwhile, Kevin Walsh, managing director at GE Energy Financial Services, said his group is bullish on renewables and continues to invest. Walsh said since GE is a venture investor, the company has good insight into what technologies are coming onto market the next 5-10 years. Walsh said he likes what he sees, especially with projected cost declines in utility-scale solar.
But when it comes to tax policies, Walsh said the playing field must be leveled between clean energy and fossil fuels. As for the regulatory uncertainty of federal clean energy tax policies? Walsh said Congress is creating some difficulties.
“It’s hard to deal with the policy’s on-again/off-again nature,” he said.
David Giordano, a managing director of BlackRock, which manages more than $4 trillion in assets, agreed.
“Consistency would be the general message I would preach,” he said. “It’s the uncertainty that brings out inefficiencies in this space in particular.”