2014 was a pivotal year for the climate. According to NOAA, average global temperatures were the hottest ever recorded, and greenhouse gasses continue to run rampant. However, several important steps were taken to address our changing climate, and on the whole, it’s fair to say that meaningful, and hopefully long-lasting, progress was made this year.
To begin with, the US and China reached an historic agreement to work together to decrease carbon emissions, whereby the U.S. committed to cut emissions by 28% by 2025 and China pledged to reach peak emissions by 2030—a substantial and symbolic step that not only indicated a true commitment to climate leadership, but also encouraged other nations to create emissions reduction plans.
This unlikely union served as an important cornerstone for the Lima Accord, the basis of a global treaty (expected to be signed at the Paris climate talks in December, 2015) that will finally establish and ratify climate action strategies for countries across the planet.
On a national scale, the EPA took an important step towards reducing pollution by announcing new national standards for smog reduction and coal ash disposal. The smog control standards will cut emissions levels from 75 ppb to 65 ppb (an entirely viable amount when compared to the European Union’s limit of 60 ppb and Canada’s of 63 ppb). Nationwide, the proposed guidelines are predicted to reduce overall carbon emissions by more than 6% from 2005 levels by 2020, and slightly more by 2030.
While the standards were criticized by opponents as anti-business, supporters lauded the move as the strongest step towards combating climate change that the U.S. has ever taken and a harbinger of change to come in our nation’s approach towards clean energy and sustainability.
The EPA also announced regulations on the disposal of coal ash that creates safeguards for communities against ground, air, and water contamination. The regulations increase transparency requirements for coal plants, including annual groundwater results, corrective action reports, and dust control plans.
The Keystone Pipeline played, and will continue to play, a central role in the political debate about climate action. But support for the project seems to be steadily declining. President Obama recently expressed fervent opposition against approving the Keystone Pipeline, indicating that the project has the strong potential to create environmental damage in the U.S. and augment the global risks of climate change, with little positive impact on long-term job creation, economic opportunity, or national gas prices. It’s certain that the Keystone Pipeline will continue to be one of the most hotly debated and polarizing issues in Washington in 2015 and beyond.
For many years, the Pentagon viewed climate change as a future possible threat our nation may face from increased temperatures, extreme weather, drought, flooding, and rising sea levels. But 2014 marked a notable change in the Pentagon’s approach—instead of addressing climate change as a distant danger, the organization issued a watershed report that recognizes present-day threats to national and global security, calling for immediate and dramatic action.
As climate events cause more frequent and intense global humanitarian crises, the Defense Department expects increased demand for its assistance and humanitarian relief. The military is now actively scenario planning, preparing for situations ranging from rescuing climate refugees from ravaged areas to providing clean drinking water to parched populations to remediating environmental destruction from devastating climate events.
Earlier this month, New York Governor Andrew Cuomo made a watershed decision to ban hydraulic fracturing, or fracking, throughout the state, citing concerns over public health risks, water contamination, air pollution, earthquakes, and diminishing financial returns (extracting energy from fracking will become increasingly more difficult, expensive, and risky).
Despite pressure from the oil and gas industry to open up fracking in New York, Cuomo set an important precedent in which the health of New York citizens trumped short-term capital gains. New York is the first “shale state” to take such bold action against fracking, and Cuomo’s decision is expected not only to influence similar decisions in other states considering fracking (such as Maryland, Pennsylvania, and California), but also to strengthen anti-fracking, or “fracktivist”, efforts nationwide.
In 2014, corporations, investment groups, universities, and individuals alike divested assets at a momentous pace out of dirty fossil fuels and reinvested those funds into clean energy and technology. Inspired by environmental activist organizations and college students across the country (who have questioned en masse the endowment investment practices of their schools), 17 large and reputable Foundations, including the Ben & Jerry’s Foundation, The Educational Foundation of America, The John Merck Fund, The Russell Family Foundation, The Sierra Club Foundation, and the Wallace Global Fund, with assets totaling nearly $2 billion, launched an initiative to divest from fossil fuel investments and place those funds into green products, solutions, and organizations that beget a sustainable future. This initiative, called Divest-Invest Philanthropy, was created to raise awareness about the importance and urgency of moving away from fossil fuels and towards climate solutions.
No doubt, it’s hard to envision a cleaner future while the fossil fuel-based companies have such a stranglehold on our economy. However, as fossil fuel assets become riskier and more expensive, investors of all kinds will find it easier to eliminate them from their portfolio. Divestment, which was once seen as an unrealistic demand by environmentalists, is now entrenched firmly at the crossroads of public policy, consumer demand, and sound business practices.
Even Pope Francis spoke out about the dangers of climate change and our responsibility to protect the planet. In an address last month to the European Parliament, the Pope called for responsible stewardship of the Earth, reformed agricultural policies to feed the hungry, and increased green jobs to address Europe’s youth unemployment problem.
Our Earth needs constant concern and attention,” said the Pope. “Each of us has a personal responsibility to care for creation, this precious gift which God has entrusted to us. This means, on the one hand, that nature is at our disposal, to enjoy and use properly. Yet it also means that we are not its masters. Stewards, but not masters. We need to love and respect nature, but instead we are often guided by the pride of dominating, possessing, manipulating, exploiting; we do not ‘preserve’ the Earth, we do not respect it, we do not consider it as a freely given gift to look after. Respect for the environment, however, means more than not destroying it; it also means using it for good purposes.”
In September, climate change officially spurred a movement. In conjunction with the United Nations’ Climate Summit in New York City (attended by over 125 world leaders,) millions of people across the globe took to the streets to participate in the People’s Climate March—the largest climate action rally in history. 2,646 marches took place in 162 countries, with 400,000 people marching in New York City.
The massive mobilization certainly got the attention of the world leaders attending the Summit. “As citizens keep marching,” President Obama said in an ardent speech to his fellow leaders, “we cannot pretend we do not hear them. We have to answer the call.” UN Secretary-General Ban Ki-moon also responded to the energy of the moment, first by commenting during the Climate March that “there is no plan B, because there is no planet B”, and then by challenging government and business leaders to set a new course on climate change, reducing emissions aggressively, attaining carbon neutrality before the end of the century, and placing a tax on carbon.
2014 brought tremendous advances in renewable energy. As the costs for wind and solar solutions plummet and electricity costs soar, renewables are reaching price parity in markets across the globe. Analysts predict that, as early as 2016, rooftop solar in the U.S. will cost the same or less than electricity from the grid in all 50 states. Even if the government removes current subsidies, it is expected that renewables will remain price competitive.
In 2014, solar system installs were higher than ever, spurred by innovative financing models. Approximately 68% of PV installations utilized a Power Purchase Agreement, most of which eliminated upfront costs for the buyer. PACE programs, which allow home and business owners to pay down solar system loans through property tax, also experienced a resurgence (California alone approved $600 million in residential and commercial PACE programs in 2014—10 times as much as in 2013.) We can expect to see even more financing models emerge in 2015 and beyond, including yield cos, asset backed securities, and retail bond offerings.
To add fuel to the renewable fire, so to speak, there is new promise for advancements in battery storage systems, primarily due to Elon Musk’s commitment to build two mega battery factories in New York and Nevada. Inadequate storage technology, namely batteries, has been the main bottleneck in preventing price parity and full scalability of electric vehicles, renewable energy systems, and other clean technology innovations. Lithium-ion batteries are the source of power these days for everything from cell phones to the luxurious electric Tesla. Despite growing demand, the price of these batteries remains high. Musk is making calculated risk that by increasing production of these batteries, prices will be driven down so that he can mass-produce solar systems and electric vehicles that are affordable for the average American family. In fact, Musk is so confident about his gigafactories that he projects that he can drive battery prices down by 30% by 2017 and 50% by 2020.
It has, indeed, been a good year, but we’re still at the tip of the iceberg. In 2015, we’re sure to see enhanced collaboration and commitments from governments, corporations, NGOs, and communities across the globe. It’s certain that we’ll also see climate policy used as a political weapon to create discord between factions, and the voices of climate deniers will become louder and more belligerent.
But the climate change fight is no longer just about how we treat the environment. It has transformed, and therefore become more personal and substantial. It’s about jobs, livelihoods, and social justice. It’s about having a thriving economy and financial security. Millions of people across the globe are coming together to participate in the most fateful battle in human history. Fortunately, climate awareness is at its highest point ever, and the growing momentum is unstoppable.
Sara is the Co-founder and CEO of Green Builder Media. An experienced entrepreneur, investor, and sustainability consultant, Sara specializes in developing companies that are simultaneously sustainable and profitable. Sara is a former venture capitalist and has participated in a portion of the life cycle (from funding to exit) of over 20 companies. Sara graduated Cum Laude from Dartmouth College and holds an MBA in entrepreneurship and finance from the University of Colorado. This article was republished with permission from Green Builder Media and was originally published on the Green Builder Media blog.