CSRHub Blog Research on ESG metrics and comments on sustainability best practice

Could the Wind Industry End Fossil Fuel Subsidies?

[fa icon="calendar'] Jan 22, 2013 9:28:48 AM / by Carol Pierson Holding

By Carol Pierson Holding

After a year where wind producers sat on their hands, waiting until Congress decided whether the wind tax credits would be extended, it finally happened: on December 31, as part of the fiscal cliff deal, Congress extended the production tax credit (PTC) for wind and other renewables through the end of 2013.

But one year is not enough time to get a wind production facility up and running. There are plenty of wind operations — some 100 pre-operational wind projects in the Northwest alone — that are far enough through planning stages to break ground in time to qualify. But any longer-term projects are stalled because of the lack of predictability for tax credits. Wall Street can’t invest with that much uncertainty. Even operating concerns cut back. In fact, this year’s uncertainty caused turbine manufacturers including Siemens and Vestas to cut back in the middle of last year.

What galls Energy Policy Expert Fred Hewitt is that energy subsidies have been a fixture of American policy since the dawn of the fossil fuel era, and yet lawmakers refuse to make subsides for wind anywhere near permanent. Some eighty years ago, special treatment in the tax, accounting and business formation codes, from special depreciation and Federal resource leasing rules, was put in place to support building the electric power system. Similar subsidies were given to the nuclear industry fifty years ago in the form of legal shielding in case of accident. These special incentives still exist today.

And yet the renewable energy industry has to apply every one or two or five years to have their incentives renewed.

Wind has its negative impacts of course. Wind patterns are disturbed. Loud whirring interrupts the bucolic quiet. Birds are decimated if they fly into a turbine. All energy sources have their impacts.  Only renewables are free from carbon emissions.

Fossil fuel lobbyists argue that wind is not reliable and has yet to prove its financial viability. But wind is no longer an energy source that has to prove itself. It’s a bonafide industry, drawing in investments of $15.5 billion a year with 500 companies currently competing in the US alone. Small wind turbines are being installed in factory locations to protect manufacturers from energy shortages and price fluctuations. And because utilities have requirements to source additional energy from emission-free sources, future demand is assured. See 90 of these companies’ CSR ratings on CSRHub.

Still, how will this new industry go up against the might of its competitors, fossil fuel companies determined to slow its progress?

Despite its drawbacks, the PTC extension is not all doom. The fact that it passed at all amidst the chaos of the fiscal cliff is remarkable. While wind champions are generally pro-environmental Democrats, support was bi-partisan. Central state Republicans like members of the Red State Renewable Alliance supported the measure on behalf of rural constituencies for whom wind development is an economic Godsend. As Hewitt puts it, “This is an important political signal.”

Still, the PTC will continue to be problem until it is extended for multiple years. The industry has come up with a compromise: through the American Wind Energy Association, the industry has offered a voluntary proposal to Congress to phase out Production Tax Credits over six years. Why six years? Because that’s how long it will take for wind to establish a stable base market in the U.S. and to invest in new innovations such as off-shore wind power.

Hewitt describes the kicker: they want all energy industries to do the same, phasing out special treatment of any kind. Over the same six years.

Many agree. The Environmental Defense Fund is quietly stirring support for getting all energy industry players agree to phase out subsidies, a goal that Obama touted in his State of the Union Address and which the G20 agreed to do for fossil fuels at their meeting last September.

How fitting that the wind industry, the youngest player and the one that really needs the subsidies, is the first to volunteer to give them up. Could it be that renewables are not only the most conservative environmentally but fiscally too? You have to love the irony.

[csrhubwidget company="Vestas-Wind-Systems" size="650x100" hash="c9c0f7"]

Photo is courtesy of vauvau via Flickr CC.

Carol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council's Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 6,700 companies worldwide. Carol holds degrees from Smith College and Harvard University.



CSRHub provides access to corporate social responsibility and sustainability ratings and information on over 6,700 companies from 135 industries in 82 countries. By aggregating and normalizing the information from 200 data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 1 Comment posted in American Wind Energy Association, corporate social responsibility, fossil fuel, Fred Hewitt, nuclear, Uncategorized, wind, PTC, Carol Pierson Holding, CSRHub, renewable energy

Obama Energizes Debate With Focus on New Energy

[fa icon="calendar'] Oct 17, 2012 10:49:38 AM / by Carol Pierson Holding

By Carol Pierson Holding

Watching the first Presidential debate on October 3, I kept waiting for Obama to bring up

climate change and clean tech

climate change. Yes, climate change is this election’s third rail. But it makes many of Obama’s strategies work. In fact, climate change may be at the center of his vision for a new economy. Old “cash cow” industries like oil are being “harvested;” low growth low return industries like coal are being allowed to be put out of business by low-priced natural gas, and new, fast-growing industries like wind and solar are “stars” where investment return will be highest.

Without climate change, Obama is open to charges of using taxpayer money to play with the sun and wind and counting on imaginary jobs to save the unemployed. A delusional demi-God claiming he’ll change the world.

Climate change can change the playing field for Obama, but he’s got to bring it up without saying those toxic words.

So why not instead couch climate change in bipartisan poll-sanctioned terms such as “clean tech” and “green jobs”?

And sure enough, at Tuesday night’s debate, Obama did just that.

While post-debate pundits focused on Romney’s through-line on jobs and Obama’s victories on women and immigration, my gut feeling told me that Obama had repositioned the debate most in the energy area.

Obama reset Romney’s positioning of oil and gas realism vs. alternative energy dreaming — as Romney framed it in the first debate, oil subsidies vs. Solyndra — to a new inclusive paradigm of “energy sources”:

“…we’ve got to make sure we’re building the energy source of the future, not just thinking about next year, but ten years from now, 20 years from now. That’s why we’ve invested in solar and wind and biofuels, energy efficient cars.”

When asked about high gas prices, Obama brought up higher fuel efficiency standards, positioning them not a “traditional source of energy” but another “look to the future.”

Obama used clean energy as a competitive weapon against Romney as short–sighted, ceding energy innovation to other nations:

“So he’s got the oil and gas part, but he doesn’t have the clean energy part. And if we are only thinking about tomorrow or the next day and not thinking about 10 years from now, we’re not going to control our own economic future. Because China, Germany, they’re making these investments. And I’m not going to cede those jobs of the future to those countries. I expect those new energy sources to be built right here in the United States.”

The two candidates went at each other about whether Obama had increased fossil fuel drilling on Federal lands, a fight Romney won, but after Candy Crawley got the two back to their corners, Obama continued to steer the debate to new energy :

“What I’m not for is us ignoring the other half of the equation. So, for example, on wind energy, when Governor Romney says ‘these are imaginary jobs.’ When you’ve got thousands of people right now in Iowa, right now in Colorado, who are working, creating wind power with good-paying manufacturing jobs.”

Obama’s mission was complete when Romney, the candidate who said “I like coal” in the first debate, became himself an advocate for an more inclusive definition of energy resources:

“ROMNEY: Candy, I don’t have a policy of stopping wind jobs in Iowa and that — they’re not phantom jobs. They’re real jobs.

CROWLEY: OK.

ROMNEY: I appreciate wind jobs in Iowa and across our country. I appreciate the jobs in coal and oil and gas. I’m going to make sure –

CROWLEY: OK.

ROMNEY: — we’re taking advantage of our energy resources. We’ll bring back manufacturing to America. We’re going to get through a very aggressive energy policy, 3 1/2 million more jobs in this country. It’s critical to our future.”

Were these quotes indicative of a real shift? I checked the numbers.

In the first debate, the word “taxes” dominated, followed closely by “jobs.”

In the second debate, the most-used word was “jobs.” But the second? Energy.

Yes, oil and gas were mentioned five times as much as wind and solar. And Obama came nowhere near condemning the fossil fuel industries, as climate change activists would have liked. But he moved the discussion to clean energy jobs and the energy resources of the future. And that’s a good place to start.

Thanks to ABC News for the October 16 debate transcript and CNN for the October 3 debate transcript.

Photo courtesy of cwwycoff1 via Flickr.


Carol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council's Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 5,000 companies worldwide. Carol holds degrees from Smith College and Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on nearly 5,000 companies from 135 industries in 65 countries. By aggregating and normalizing the information from over 170 data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 2 Comments posted in climate change, energy, Uncategorized, wind, Obama, solar, Carol Pierson Holding, clean energy, clean energy jobs, clean tech, debate, green jobs

No Spark in Obama’s Energy Debate

[fa icon="calendar'] Oct 9, 2012 10:47:54 AM / by Carol Pierson Holding

By Carol Pierson Holding

Last week’s Presidential debate was supposed to showcase the differences betweenclimate change President Obama and his challenger, Mitt Romney. But between Romney’s radical move to the center and Obama’s lackluster performance, the two seemed to agree more than they disagreed.

Both answered Jim Lehrer’s first question “How would you create new jobs?” with the same priorities: job training and creating energy independence. In fact, both agreed to boost oil and gas production. But Obama added a plug for his alternative energy policies. “We've got to look at the energy sources of the future, like wind and solar and biofuels, and make those investments,” he said, referring to his largely successful subsidies for alternatives to fossil fuels.

From that point on, Romney turned oil and gas into a symbol of patriotism and the path to prosperity, using the word “energy” three times more than Obama and positioning new energy sources as expensive failures.

Obama failed to cite the reason his policies are so desperately needed, that climate change may in fact be the greatest threat to our national security. Instead, Obama looked like a spendthrift or worse, out of touch with American middle-class concerns. Even though, according to Bloomberg, 70% of Americans now believe in climate change. Even though, according to CSRHub ratings, safeguarding the environment is increasingly a priority for business.

Romney called out gas prices that have doubled and the rise in electricity prices, citing the crushing burden on middle-class families.

Ignoring the facts, Romney criticized Obama for not opening Federal lands for exploration. He promised to double the number of permits and open coasts and Alaska to fossil fuel companies.

Obama mentioned solar, wind and geothermal only once. Without bringing up climate change, and without a rebuttal, Romney pressed on.

Romney promised to “bring that pipeline in from Canada“ and to help “people in the coal industry…crushed by (Obama’s) policies.”

As if thumbing his nose at environmental science, he smiled right into the camera and said, “I like coal.”

His rationale for these policies? “I want to get America and North America energy independent so we can create those jobs.”

So when Obama brought up cutting the $4 billion in “corporate welfare” that the US pays every year to behemoths like ExxonMobil, he sounded like a spoilsport.

Romney argued that Obama’s facts were wrong – the oil subsides are actually $2.8 billion – and that those subsidies are inviolate. “That's been in place for a hundred years,” he said, as though oil subsidies were deeply entrenched in our Democracy.

But what really stuck in my mind was Romney’s brilliant repositioning of the new energy subsidies. By comparing a $2.8 billion cut to oil and gas against the $90 billion in “breaks for the green energy world,” he made support for alternative energy sources seem hugely expensive and frivolous in comparison to far cheaper oil subsidies. He repeated twice that green energy investment is “about 50 years' worth of what oil and gas receives.”

Still not satisfied, Romney linked the $90 billion to Solyndra and the other “50%” of green investments that had failed. In fact, those investments have lost just $3 billion, or 3%, but Obama said nothing, so it stood as fact.

But the real shame is that Obama lost the opportunity to pull out numbers that make everything else pale in comparison. NOAA reports that 2011 saw a record 14 extreme climate disasters that cost over $1 billion each for total losses of $55.3 billion and 660 lives. Future projections are even grimmer: US News cites projections of 100 million deaths globally from climate change in just 18 years. In the US, 2% of America’s annual GDP, or some $300 billion, will evaporate.

Yet Romney plans to eviscerate the EPA and a number of other programs aimed at reducing the effects of climate change. He’s a believer that climate change is real, yet will do nothing to mitigate the effects. A New York Times article cites Romney’s intent to take a weed whacker to environmental regulations going back 40 years – taking down even those declared “unambiguously correct” by the Supreme Court.

Climate change may not be popular, but people do want to hear about clean tech and green jobs. These are exciting, entrepreneurial opportunities for job creation. Where were they in Obama’s debate?

At heart, climate change is a moral issue. The hardest hit will be our future generations. And yet Romney stole that argument too. Using the word “moral” three times, Romney pointed to the deficit: “(It’s) not moral for my generation to keep spending massively more than we take in, knowing those burdens are going to be passed on to the next generation.” Shouldn’t that be Obama’s argument for addressing climate change?

Photo courtesy of marcn via Flickr.


Carol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council's Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 5,000 companies worldwide. Carol holds degrees from Smith College and Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on nearly 5,000 companies from 135 industries in 65 countries. By aggregating and normalizing the information from over 170 data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 5 Comments posted in Bloomberg, climate change, CSRHub ratings, Exxon Mobil, President Obama, Uncategorized, wind, Romney, solar, biofuels, Carol Pierson Holding, clean tech, coal, green jobs

Subscribe to Email Updates

Lists by Topic

see all

Posts by Topic

see all

Recent Posts