Category Archives: General

What the growing Latino community can do for climate politics

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In 2012 Latinos made up 1 in 10 voters and helped decide the Presidential election with record-setting voter margins. Last month in California, the most populous state in the nation, the Hispanic population surpassed that of non-Hispanic whites. The only other state to reach this benchmark is New Mexico, where the Latino population is almost 10% larger than that of non-Hispanic whites.

As the Latino population continues to grow across the country, so does its influence in key political arenas. In battleground states like Florida, Colorado, and Nevada, Latinos accounted for 17, 14, and 18 percent of voters in 2012, respectively, an increase from previous elections. The trend has reignited a lively discussion about the influence of the American Latino community, the “sleeping giant” of American politics.

There’s also a lesser-known political trend that is emerging among the country’s youngest and fastest-growing demographic: the demand among Latinos for action to address climate change. In a new national poll released last month by the Natural Resources Defense Council and Latino Decisions: Read More »

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PACE Financing for Clean Energy, Part 2: Lowering the Funding Costs

rp_Brad-Copithorne-Photo-200x3001.jpgYesterday, my colleague Scott Hofmeister described an insurance pool that California has introduced to help communities integrate Property Assessed Clean Energy (“PACE”), a unique program that allows homeowners to finance money-saving clean energy retrofits through their property tax bill. These programs are popular in Sonoma, Orange, San Diego, Riverside, San Bernardino, Kern, and Fresno Counties, and we expect them to spread rapidly throughout the state.

Home Energy Renovation Opportunity (HERO), a residential PACE program run by Renovate America that has partnered with the Western Riverside Council of Governments, has funded over $180 million of clean energy retrofit projects in a little more than two years of operation. These investments are expected to save homeowners more than 2 billion kilowatt-hours, reduce consumers’ utility bills by almost $500 million and avoid more than 1.4 million metric tons of CO2 emissions, or the equivalent of removing almost 300,000 passenger vehicles from the road for a full year. And notably, the HERO program is entirely funded by private investors.

If the whole state of California embraced PACE at the same rate as Riverside County, residential PACE could generate up to $3.5 billion of private investment. That could create more than a few high quality local jobs.

Last week, about $100 million of the HERO financings were securitized and sold to investors by Deutsche Bank. The terms of the transactions indicate the incredible power of the PACE structure and potential of these clean energy investments. Despite all of the financings coming from a single county, 20 year maturities for the underlying loans, and an overcollateralization of only 3%, the rating agency provided a AA rating, the second highest possible, for these financial assets. For comparison, geographically diversified pools of unsecured 10-12 year energy efficiency loans may require overcollateralization of 20+% to achieve BBB ratings. Read More »

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Message from Moms to Governor Perry: “Mess with Texas, not California”

josesBy Jose Sigala, Field Manager for Moms Clean Air Force in Los Angeles and California's Central Valley 

This week, Texas Governor Rick Perry made another visit to California in his continued crusade to entice businesses to relocate to the Lone Star State. Once again, Perry is making his stump-like pitch, highlighting his state’s low taxes and regulations and business-friendly climate, while touting the fact that no other state has created more jobs than Texas.

While that distinction is often disputed, Perry’s lack of effort to address climate change and poor air quality in his home state is not.

In fact, his neglect of major environmental concerns has helped Texas become one of the country’s worst polluters. The state ranks first in the nation for greenhouse gas emissions and worse yet- poor air quality is having a negative impact on children’s health. Kids age 0-4 with asthma are being admitted to the hospital up to eight times more than asthmatic adults in the state.

Moms across Texas and California urge Governor Perry to get his priorities straight and stop providing a pollution haven to corporations and prioritizing healthy profit margins over healthy communities. Read More »

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PACE Financing for California’s Clean Energy Future, Part 1: Expanding the Residential Market

rp_Scott_Hofmeister-287x377.jpgWhen it comes to protecting the environment and fighting climate change, California has always been a first mover.

Now the state is boldly acting to unleash a new market that saves energy, cuts pollution, and drastically increases clean energy investment for California’s residents.

Last week, California approved a $10 million reserve that will revive the Property Assessed Clean Energy (PACE) program for residential customers.

PACE allows customers to take advantage of energy saving upgrades to their home with no money down. Customers simply use a portion of their savings to pay off the investment over time through their property tax bill. Financing can be entirely provided by private lenders at no cost to taxpayers.

Since its first use at a San Francisco office building in 2012, PACE has been a resounding success in the commercial sector. In fact, the commercial markets have quickly taken to PACE and continue to set new deal-size records.

Read More »

Also posted in Clean Energy, On-Bill Repayment | 1 Response, comments now closed

For Landmark Climate Change Law to Work, California Must Stay the Course

rp_erica-morehouse-287x377-228x300.jpgFor months, EDF has been reporting on the exciting conversations happening at the California Air Resources Board (CARB) and the Governor's office on the impressive progress California is making towards meeting its AB 32 climate protection goals and on what comes next for the state beyond 2020.

Yesterday, I had the privilege of continuing the dialogue as I testified in support of the AB 32 Scoping Plan Update before the California Assembly’s Natural Resources Committee. While some have recently debated the benefits of AB 32 and its cornerstone cap and trade program, most Californians recognize the benefits that the landmark law has delivered since its adoption in 2006, as well as the progress it promises with continued support from state leaders.

As the rest of the nation (and the world) eyes California, it is imperative that we remain focused on sustaining and strengthening the world’s most comprehensive climate change program,  and ensuring we remain on the path to reaching our 2020 and future greenhouse gas emission reduction goals. Read More »

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California and Quebec: A Partnership Par Excellence

rp_erica-morehouse-287x377-228x300.jpgOn Tuesday, the Canadian province of Quebec held its second cap-and-trade allowance auction.

Today, the results are in – and they’re encouraging.

99% of the current vintage year allowances and 84% of the future vintage year allowances offered for sale in this auction were purchased at the floor price of $11.39 CAD.  This is a significant increase from Quebec’s first action, which saw the sale of only 34% and 27% of current and future allowances, respectively.

These results reflect growing interest and demand in this burgeoning carbon market after it officially linked with California’s program at the beginning of 2014.

However, the results of Quebec’s auction are a bit different from the results we saw in California's sixth auction last month. Most notably, California’s auction saw higher demand for allowances, driving the settlement prices for both current and future allowances above those seen in Quebec’s auction.

So, why do these differences exist?  And what do the Quebec auctions actually tell us?  Read More »

Also posted in Cap-and-trade auction, Linkage | Comments closed

California’s Carbon Market Could Help Stop Amazon Deforestation

(This post first appeared in Point Carbon North America)

By Juan Carlos Jintiach, Shuar indigenous leader from the Amazon basin, and Derek Walker, Associate Vice President for the US Climate and Energy Program at Environmental Defense Fund

From left to right: Juan Carlos Jintiach, Megaron Txucarramae (a leader of Brazil’s indigenous Kayapo tribe), Lubenay.

A recent article in the Journal of Climate predicts that destroying the Amazon rainforest would cause disastrous drought across California and the western United States. Californians are already no strangers to drought – the state is suffering one of its worst on record. But the research adds an interesting dimension to what we already know from numerous studies about deforestation: that greenhouse gas pollution in California and around the world makes forests, including the Amazon, drier and more susceptible to widespread fires. California may be thousands of miles away from “the Earth’s lungs,” but how we treat our diverse ecosystems directly affects the one atmosphere we all share.

It is good news for everyone that California’s Global Warming Solutions Act (AB 32) – which includes the world’s most comprehensive carbon market – is already helping reduce the state’s greenhouse gas pollution. Amazon states and nations have also greatly reduced their greenhouse gas emissions from deforestation, which collectively accounts for as much greenhouse gas pollution as all the cars, trucks, and buses in the world. California now has a terrific opportunity to show global environmental leadership by helping Amazon states keep deforestation rates headed for zero while helping save money for companies and consumers in the Golden State.

The current world leader in greenhouse gas reductions is Brazil, which has brought Amazon deforestation down about 75% since 2005 and kept almost 3 billion tons of carbon out of the atmosphere. Indigenous peoples and forest communities have played an essential role in this accomplishment. Decades of indigenous peoples’ struggles against corporate miners, loggers, ranchers, and land grabbers and advocacy in defense of their land rights have resulted in the legal protection of 45% of the Amazon basin as indigenous territory and forest reserves – an area more than eight times the size of California.

Credit: Dylan Murray

Credit: Dylan Murray

These dedicated indigenous and forest lands hold about half of the forest carbon of the Amazon, and have proven to be effective barriers against frontier expansion and deforestation. In a real sense, indigenous and forest peoples are providing a huge global environmental service, but that service is almost entirely unrecognized, let alone compensated. And in Brazil, where agribusiness is pushing back hard against law enforcement and reserve creation, deforestation is back on the upswing – increasing nearly 30% last year.

California has a role to play in keeping Amazon deforestation on the decline and giving indigenous and forest communities the recognition and support they need. A program called Reducing Emissions from Deforestation and Forest Degradation (REDD+) gives countries or states that commit to reducing deforestation below historic levels “credits” they can sell in carbon cap-and-trade markets. Getting these programs recognized by California’s carbon market would send a powerful signal that forests in the Amazon and around the world are worth more alive than dead, and would also provide real incentives for further reductions.

A few weeks ago, indigenous leaders from Brazil, Ecuador, and Mexico are in California engaging state leaders and policymakers on the issues of deforestation, indigenous and local peoples’ rights, and potential partnership with California’s carbon market. California should insist that only jurisdictions that respect indigenous and local peoples’ rights, territory and knowledge, and ensure that they benefit from REDD+ programs get access to its market.

The successful adoption and implementation of AB 32 is proof that California is leading the nation on effective, market-based climate change policies. But it’s time to take that another step forward. By allowing credits from REDD+ to play a role in the AB 32 program, the Golden State can be a world leader on one of the most significant causes of climate change and take action to protect the health and prosperity of a threatened land and its people.

 

Learn more about REDD+ and California:

Also posted in Global Warming Solutions Act: AB 32, Offsets | Comments closed

PACE 2.0: California Leading the Next Evolution in Clean Energy Finance

Brad Copithorne_jpgProperty Assessed Clean Energy (PACE) is an innovative financing technique for clean energy retrofits that was first developed in Berkeley in 2008, giving energy efficiency projects a huge boost throughout the U.S.

Here’s how it works: Property owners agree to a long-term tax assessment on their home or building in exchange for the upfront funding to pay for a retrofit. What’s great about the program is its ability to essentially eliminate one of the biggest barriers to energy efficiency retrofits: up-front costs.

And, just as with any other property tax assessment, the obligation transfers to the new owner upon a sale of the property.  This transferability allows property owners to consider projects with longer payback periods as the obligation does not become immediately due upon sale.

From a lender’s perspective, because this obligation is part of a property tax bill it has a very high likelihood of being repaid, even under a foreclosure.

Successful PACE programs have the potential to net great results from reducing greenhouse gas emissions and improving energy efficiency to reducing total energy costs for both residents and businesses.

Unfortunately, in July 2010, the Federal Housing Finance Agency (FHFA), the regulator for Fannie Mae and Freddie Mac, threatened to take action against homeowners and municipalities that participated in PACE programs for residential properties.  FHFA’s pronouncement has effectively curtailed most residential PACE programs, with the exception of Sonoma and Riverside counties in California.

Sonoma and Riverside counties have clearly demonstrated that there is significant consumer demand for clean energy retrofits that improve comfort and save money.  To date Sonoma has financed $52.8 million of PACE retrofits.  Renovate America, which provides funding for the Riverside program, has funded $134 million of projects in that program and a recently launched similar program in San Bernardino County.

California Governor Jerry Brown has long supported residential PACE programs as a strategy to create jobs, save homeowners money, and improve the environment.  The governor’s office has been working diligently for the past three years to come up with a solution that will satisfy FHFA and reinvigorate PACE across California.

Last week, California announced preliminary regulations that would provide funding intended to make Fannie and Freddie whole if they foreclosed on a property with an unpaid PACE obligation.  The program is closely modeled after a Vermont PACE program that was able to get a waiver from FHFA.

In December, Mel Watt was approved as the new Director of the FHFA.  EDF urges Mr. Watt to quickly provide California with a waiver so that we can put Californians to work on clean energy retrofits across the state and establish a model for residential PACE 2.0 that can be used across the country.

Also posted in Clean Energy, Energy Efficiency | 3 Responses, comments now closed

California’s Innovation Story: Real People, Real Solutions

EDF’s Innovator Series profiles companies and people across California with bold solutions to reduce carbon pollution and help the state meet the goals of AB 32.  Each addition to the series will profile a different solution, focused on the development of new technologies and ideas.  

Time and again, the people of California have affirmed  that pursuing policies to cut climate pollution is critically important for the health of current and future generations.  At the same time, history has shown it to be much harder to implement environmental policies if there is a perception that economic health will suffer.  The ultimate goal is well-designed public policy that delivers environmental, health and economic benefits together.

In 2006, the state legislature took the environmental and economic paradigm to heart when it passed California’s global warming law, AB 32, creating a fundamental promise that cutting pollution and growing the Golden State’s prosperity will go hand in hand.  Today, California business and community leaders are proving that promise to be a reality – and new stories are regularly emerging to show it.  Our new AB 32 Innovator Series will work to capture these stories, bringing the companies – and people behind them – into light.

One of the reasons AB 32 has succeeded has been its ability to use market-based programs to cut pollution, allowing for both environmental and economic progress.  Economic, government and academic experts have long suggested that well-designed market-based programs are the best tools for achieving pollution reductions because they inspire businesses to identify and apply new and innovative solutions.  These solutions are often cheaper and faster at cutting pollution than prior methods, resulting in reduced compliance costs and rapid pollution declines.

For example, in a 2012 paper published in the Proceedings of the National Academy of Science, it said this about a market mechanism used in AB 32 (cap and trade):

“Facilitating innovation in “clean” technologies may be the key to achieving climate change stabilization without dampening economic productivity…CTPs [cap and trade programs] have several attributes that support clean technology innovation.”

For a concrete example of the possibility that innovation provides, think back to the acid rain problem of the 1990’s.  Sulfur pollution was spewing from major coal-fired power plants across the U.S., degrading forests, lakes and architectural landmarks at a threatening rate.

When the U.S. Environmental Protection Agency (EPA) adopted a cap-and-trade regulation to help solve the problem, most experts thought installing expensive scrubbers and equipment upgrades across the U.S. was the solution.  As a result, power companies across the U.S. predicted runaway costs and facility closures.   However, when faced with the opportunity of a market-based solution and its inherent signal to innovate, a simple low-cost solution was developed by these same companies: find lower-sulfur coal and bring it to the power plants by train, rather than using high-sulfur coal located closer by.

Through this simple innovation, compliance costs were 80–90% cheaper than initially estimated.

Unfortunately, most economic models and regulatory implementation scenarios are ill-equipped at predicting innovation because it tends to happen in ways people don’t expect.  If it was easy to predict how and when ground-breaking ideas occur, they would have already been applied.   As the acid rain example shows, innovation can, and does, take many forms. Accordingly, by documenting the development and implementation of innovative solutions as they emerge, the true potential of policies like AB 32 can be realized. This is the essence of our new California Innovators Series.

In California, AB 32 is helping to develop groundbreaking solutions, proving that the state’s climate policy mission of protecting the economy and the planet can be realized.  EDF’s Innovator Series will recognize several of these bold solutions throughout the year in an effort to distinguish the companies positively impacting California’s landscape and inspiring future innovators to come.

Please note, EDF has a standing corporate donation policy and we accept no funding from companies or organizations featured in this series.  Furthermore, the EDF California Innovators Series is in no way an official endorsement of the people or organizations featured, or their business models and practices.

Also posted in California Innovators Series, Clean Energy, Global Warming Solutions Act: AB 32, Jobs | Comments closed

California’s Pioneering Spirit Endures under Cap and Trade

KHK pictureCalifornia’s state motto is “Eureka,” (Greek  for “I found it”) referring to the discovery of California gold in 1848. Shortly thereafter, the Golden State quickly became the land of opportunity, spurring new technologies and catapulting California to the forefront of global innovation.

While California may no longer be flush with gold, it remains a leader in emerging industries, innovation, and technology.  In 2013, it stayed true to its pioneering spirit with the successful launch of the state’s ambitious cap-and-trade program, which is now attracting international interest.

All metrics indicate that a strong, healthy, and enduring carbon market was established in California during its first year of cap and trade, amidst a recovering economy and continuing job growth . The state has seen five successful auctions of carbon credits and an actively traded secondary market. Through this market mechanism, California has placed a price and a cap on carbon pollution while holding the state’s top polluting companies accountable for spewing harmful emissions.  Carbon credit prices have been both reasonable and stable, evidence of a smooth transition to a capped economy with none of the catastrophic results predicted by the program’s opponents.

To mark the one-year anniversary of cap and trade in California, EDF will be releasing an in-depth analysis of the program’s first year on January 8th. This report examines the state’s progress in implementing the cap-and-trade regulation and includes market performance analysis by industry experts and academics, details on auction outcomes and identification of trading trends on the secondary market. It also covers updates regarding ongoing litigation, proposed regulatory amendments and international collaboration. From the extensive data presented in this report, it is evident that cap and trade in California is off to a successful start.

Though challenges lay ahead, there is no doubt that California will rise to the challenge of accommodating the emerging carbon market. As it did during the Gold Rush, the state will continue to develop new technologies and build infrastructure while serving as a model to the world.

With the close of the first year of cap and trade, it is clear that California has found something more valuable than gold – a viable cap-and-trade program that gives the state a chance to address climate change, one of the biggest challenges of our time, and usher in a new era of opportunity and prosperity.

Also posted in Cap and trade, Cap-and-trade auction, Global Warming Solutions Act: AB 32 | 1 Response, comments now closed