Why Businesses Should Partner With the Public Sector to Advance Carbon Goals

Businesses in Missouri participated in several meetings with energy officials in the lead-up to the state’s comprehensive energy plan.

As of a result of these meetings, the final version of the Missouri Comprehensive State Energy Plan, released in 2015 includes an entire section devoted to “Businesses and Energy,” which includes recommendations to improve energy efficiency and productivity in the manufacturing and industrial sectors.

This is one example of how businesses can work with state officials to drive support for renewable energy policies that not only lower emissions but also save money, according to a new report by Ceres and the National Association of State Energy Officials.

The report, Private-Public Partnerships to Advance Low-Carbon State Energy Policies, gives insights and specific examples of how improved coordination between the two sectors can advance clean energy investments. These include how to work with states’ comprehensive energy planning processes, which can help create energy policies that are friendly to investors, companies and their customers.

“Working with the public sector is key for businesses who want to get in on the ground floor of state energy policy,” said Alli Gold Roberts, policy manager at Ceres and co-author of the report, in an email exchange. “Businesses have the power to influence the policy-making process through engagement in the state energy planning process, financing programs, utility business model dialogues and more. There’s a significant opportunity to make energy policy more conducive to the needs of the voluntary clean energy market and accelerate the transition to a low-carbon economy.”

Clean energy also represents a multi-billion dollar investment opportunity, said David Terry, executive director of the National Association of State Energy Officials, in an email. “When state energy policy makers work with private companies and investors, they open markets and accelerate clean energy technology deployment and innovation,” Terry said. “Iowa, with $10 billion already invested in wind energy and manufacturing, is a great example of how state public policy leadership combined with private sector investment and know-how to support the clean energy economy and workforce.”

The report comes as the full DC Circuit appeals court prepared to hear oral arguments on the Clean Power Plan on Sept. 27.

Although the carbon emissions rule is on hold until the court rules on its legality, several states are already moving forward with their own implementation plans to meet the Clean Power Plan’s emissions reductions. The Ceres report says that in these states, the use of private sector-driven clean energy investments has emerged as an important Clean Power Plan compliance strategy.

Not only do corporate clean energy investments help state’s comply with the Clean Power Plan and other air pollution laws, but they also help companies keep their business costs down, according to tech giants Amazon, Apple, Google and Microsoft — four of the biggest electricity users in the US — and global companies Adobe, Mars, Ikea North America and Blue Cross Blue Shield of Massachusetts , all of which have filed legal briefs endorsed the Clean Power Plan.

Additionally, working with state officials can help companies advance their own environmental goals.

Sixty percent of Fortune 500 companies have a clean energy, GHG emissions reduction or energy goal, while 69 major global companies including Google and Microsoft have committed to using 100 percent renewable energy. Meanwhile 179 firms including Ikea, Unilever, Kellogg, Walmart and Dell have agreed to set science-based GHG emissions reduction targets, which is the equivalent to reducing GHG emissions 80 percent by 2050, compared to 2005 levels — and that’s going to require big investments in clean energy.

The report makes recommendations for companies on how to advance public-private partnerships such as:

• Establish lines of communication and coordination with state energy offices.
• Leverage states’ comprehensive energy planning process. This can help create energy policies that are friendly to investors, companies and their customers.
• Include utilities and large energy users in legislative and regulatory discussions. This is critical for realizing the benefits of energy efficiency and renewable energy investments. These customers often have unique needs and programs must be tailored to meet them.
• Utilize partnerships to implement incentives and financing. Grants and incentives are key tools for expanding clean energy markets and tapping into the benefits of energy technology-based economic development and job growth.

As the report shows, some states are already moving forward on implementing clean energy policies as a result of public-private dialogues and partnerships. For example, Minnesota Gov. Mark Dayton recently signed legislation to upgrade utility grid infrastructure and planning after a series of discussions with private and utility stakeholders. And in a first-ever transaction in 2015, Calvert Investment Management purchased more $12 million in consumer energy efficiency loans, which benefited Pennsylvania, Kentucky, and Cincinnati, Ohio.

Calvert, an institutional investor with $12 billion in assets under management sees “opportunity for investment, innovation and growth coming from federal and state policy that fosters renewable energy sources and provides incentives for energy efficiency,” shareholder advocacy VP Stu Dalheim said in an email. “Many of the companies that Calvert holds in its portfolios are focused on energy and climate issues, some on the supply side, and some on the demand side. Smart state level policy has helped catalyze corporate efforts to invest in and use more renewable energy, to the benefit of the states and their workforces, and also companies and their shareholders.”