Author Archives: Marc Karell

Final Words on Energy Efficiency

Despite the new agreement from the Paris Climate Change Meeting, there seems to be growing momentum against being energy efficient. As I write this, crude oil is under $40 per barrel, and perhaps going lower as the new year begins. Lower prices of gasoline, diesel oil, etc. in the retail market are quite apparent.

Yet, energy from such sources, such as oil and natural gas, is in a finite supply. We will eventually run out. We cannot be wasteful. Plus, the scientists say there are limits of how much of carbon currently trapped in the ground can be put into our atmosphere without causing grave outcomes of rising sea levels, more extreme storms and droughts, etc. We need to not only transition to renewable (non-carbon) sources of energy, but also to use more efficiently the fossil fuel we still need to combust.

While Americans had moved toward a more energy efficient economy in their buying decisions, recent market conditions (cheaper fossil fuel prices) appear to be pushing us in the other direction. Recently, reports have come out about Americans purchasing fewer hybrid and other fuel-efficient cars and more larger, less fuel-efficient ones.

How can we overcome the reaction of Americans to short-term trends, such as cheaper gasoline prices, and focus instead on long-term needs? Certainly the concerns about and growing acceptance of Climate Change has not affected purchasing behavior long-term. Polls show a majority of Americans now believe Climate Change is real, but don’t think they can do anything about it. Perhaps an outright war in the Middle East may trigger a revival of concern for energy efficiency; let’s hope it does not come down to that! Perhaps a return to $4 per gallon gasoline will do so; but now in post-Recession America perhaps people can better tolerate such high prices and not change their ways. Besides, high gasoline prices will harm certain sectors.

I think the biggest obstacle to people and companies being more energy efficient is that there is no single “face”, no celebrity, no company or entity that is “talking the talk” very publicly backed up by “walking the walk.” Trying to make it both beneficial and “cool.” Energy efficiency is complex and not a single entity to be represented to the public. And there are no “trophies” or high-visible ones that are internationally accepted. It’s a lot easier to do nothing.

Although there have been many good, leading companies being out front on energy efficiency, the average CEO cares little about potentially losing many thousands or millions of dollars in inefficient processes or buildings. Maybe it’s education; today’s CEOs never learned about sustainability and limits to resources. Today’s Business School students are learning this. Or maybe CEOs perceive bigger battles to wage or think the gains (financial, publicity) are not worth it.

This directly impacts my business. Particularly in the last year or two I have had a number of people, companies, or municipalities approach me about helping them be more energy efficient or sustainable, and then not go forward with the project or just do the minimum and not go forward with the rewarding projects. Some “vetoer” stops the process, they cannot get funds, they change their minds, etc. Energy efficiency and sustainability are nice concepts in theory, but for many, there is little will to close the deal and really be serious about it.

I hope entities like these will change their mind in the future, and they probably will eventually, but I cannot go on as a business this way. I will be working for a larger energy consulting firm that uses greater resources to invest in convincing and serving buildings about being more energy efficient.

CCES is still around, and we can help you address technical issues involving environmental compliance issues affecting your company. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Have a wonderful Holiday season and a happy, healthy, prosperous 2016!

Green Building Reported To Double Every 3 Years

According to a preliminary report presented at the recent 2015 Greenbuild International Summit in Washington, D.C., the amount of green building that is being implemented is doubling about every three years. Complete findings will not be available until 2016, but this rate of increase continues to occur, substantiating a trend for over 2 decades. The new report surveyed over 1,000 professionals in the field globally about their thoughts of the future of green building.

The report also highlights trends, such as a rise in green building in emerging nations and increased demand from clients and tenants for buildings that meet sustainability standards.

Historically, the greatest barrier for developers to do green building is the perception that it is more expensive than doing convention construction. The survey showed that the percentage of respondents who cited this as the top barrier dropped from 76% in 2012 to 50%.

The report also indicated that the largest growth in green building activity is anticipated to be in the commercial and institutional areas. The latter, including government buildings, schools, hospitals, and public buildings was perceived as a major future area of growth as more government agencies with strapped budgets are beginning to understand the long-term cost savings and improved worker productivity and learning capabilities of those in green buildings. More important, agency managers and politicians are beginning to show the fortitude to insist on at least green building elements of more projects.

Respondents were asked which benefits of green building were important to their clients and, therefore, driving such projects. 84% said saving costs through reduced energy consumption was important, while 76% said reducing water consumption.

Overall, the preliminary report shows that the public worldwide is beginning to understand the long-term benefits in cost savings and productivity of green building and given this decision makers are having the courage to forgo short-term savings for longer-term improvements in the value of their buildings.

CCES has the experts to help you develop green building strategies for your existing buildings to improve your energy and water use efficiency, save costs, improve productivity, which will result in greater demand for your space, and raise the asset value. Contact us today at 914-584-6720 or at karell@CCESworld.com.

USEPA’s Proposed Update of Cross-state Air Pollution Rule

On November 16, 2015, the USEPA proposed an update to its Cross-State Air Pollution Rule (CSAPR) ozone season requirements in a pre-publication letter signed by USEPA Administrator Gina McCarthy. (http://www2.epa.gov/airmarkets/proposed-cross-state-air-pollution-update-rule) CSAPR was originally promulgated on July 6, 2011 to address interstate transportation of ozone precursors under the 1997 ozone NAAQS, as well as fine particulate matter (PM2.5) under the 2006 PM2.5 NAAQS. The USEPA proposes to update this to cover the 2008 ozone NAAQS. The proposed changes, scheduled to go into effect in 2017, are intended to reduce summertime emissions of ozone precursor nitrogen oxides (NOx) from power plants in 23 states that impact the health of millions downwind. The proposed NOx emission reductions would help downwind states to meet the 2008 ozone ambient concentration standard of 75 ppb.

Air pollution, of course, travels and knows no state or national boundaries. The Clean Air Act (CAA) contains a “good neighbor” provision (Section 110(a)(2)(D)(i)(I)), that requires states to address impacts of air emissions from their sources on downwind states’ ability to meet and maintain air quality standards. This requires a state that contributes “significantly” to adverse impacts in a downwind state to submit a State Implementation Plan (SIP) revision to reduce these impacts. Otherwise, it will be subject to a Federal Implementation Plan (FIP) imposed on it by the agency to address CSAPR NOx impacts. In this proposal, the USEPA alleges such adverse impacts from 23 states and proposes NOx budgets for each to reduce impacts. The 23 states include all states east of the Mississippi River except the New England states, South Carolina, Georgia and Florida, and seven states west of the river – Iowa, Missouri, Arkansas, Louisiana, Kansas, Oklahoma, and Texas.

The NOx budgets discussed are updates to meet more rigorous standards of existing CSAPR NOx ozone-season (summer) emission budgets for electricity generating units (EGUs). These revised budgets would be implemented as the CSAPR NOx ozone-season allowance trading program. For one state, Kansas, this would represent a new trading program. The USEPA is proposing implementation of the new allowable NOx budgets starting with the 2017 ozone season.

On June 30, 2015, the USEPA issued a final notice determining that a number of states had failed to submit “good neighbor” SIPs for the 2008 ozone standard. The findings set a 2-year deadline to either approve a revised SIP for each noticed state or impose a federal plan to meet the “good neighbor” requirement. This will undoubtedly result in more stringent regulations on fuel combustion in many different circumstances.

CCES has the experts to help your company assess its activities and determine an emissions inventory. We can provide the technical portion of expertise to determine compliance with many state and federal air pollution rules. And we can provide technical strategies to reduce emissions and maintain compliance in the most economical manner possible. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Energy Trends That Will Continue in the Foreseeable Future

2015 will pass by soon. While we live our day-to-day lives and careers, it is easy to miss trends that establish themselves in a small number of or even in a single year. Yet, this is happening with energy. Some new “realities” are coming into the marketplace, likely unstoppable by those who prefer the status quo or by industries who resist change. It is likely that next month’s Paris Climate Summit will drive the establishment of these changes, as both developed and developing nations are starting to unify on the need to reduce greenhouse gas (GHG) emissions and encourage more renewable energy.

What a difference in public opinion and the market that has occurred since previous recent climate summits. These influences will likely stay with us in the future.

Global and US use of renewable energy has and will rise significantly.

In just the last few years, solar panel prices have fallen over 80% and, therefore, the overall cost of the energy from solar per kwh has dropped by over half. The market has taken notice, and there have been major private investments in solar, wind, and other renewable sources in the last few years, an over 6-fold increase. Not just on homes, but whole solar and wind power plants. In 2009, the International Energy Agency predicted that solar would produce about 20 gigawatts of power worldwide by 2015. Solar now produces nearly 10 times that amount! Who would have thought that nearly half of the new electricity installed in the US in 2014 would be solar? And look at the massive wind farms being constructed in Texas. In Texas!

Power companies, besides helping states meet renewable power commitments, are also learning that the upfront costs of building solar and wind farms are lower than a new fossil fuel plant, and the source of energy is and should remain free. Companies, such as Apple, are even building their own renewable-powered power plants.

Energy storage will be the ultimate game changer.

Of course, solar and wind have one major drawback, their variability. The sun does not shine at night, when most residential users have their greatest demand for electricity; wind varies from hour to hour and may also be out of synch with demand. What can be done with the excess power a farm may generate while the energy source is plentiful to supply electricity for the times it is not, while demand is high?

The answer is energy storage. Hundreds of millions of dollars are currently being invested in energy storage R&D on a large scale by major firms like GE, Tesla, Lockheed Martin, and others. Energy storage is currently available on a small scale, and it is inevitable that breakthroughs will be achieved on a grander scale allowing solar and wind farms to independently deliver electricity to meet all variable demands throughout a year. Given the cost of renewable energy is now comparable or cheaper than for fossil fuel-powered energy, this would be the breakthrough renewables need to operate competitively without additional fossil fuel-fired plants to balance load and at a lower cost than a fossil fuel only-powered plant.

New energy regulations are coming in the US – and many see additional benefits.

The USEPA recently published the final version of its Clean Power Plan containing GHG emission limits for US power plants that are estimated to cut GHG emissions by over 30% by 2030. This rule will further encourage greater renewable power and conversion to less polluting fossil fuels. Therefore, there will be significant reductions in emissions of other air pollutants, many of them known to be toxic. Public health studies show that this will greatly significantly reduce the incidents of asthma attacks and lung and other cancers, resulting in great economic benefits (people living longer and being more productive and saving governments money in Medicaid and Medicare payments).

While there are interests and certain states fighting the new rule in court, most states and companies appear to be accepting the new rule as here to stay. In fact, many prefer this to the uncertainty of an unregulated world. Governments and business like certainty for planning and financing reasons. States that are embracing renewable energy are benefiting, such as California and Texas. California has a tradition of forward-thinking climate change-based legislation. They will easily manage this and other new rules. And Texans have benefited tremendously from their large amounts of undeveloped land and its high incidence of sun and wind.

The USEPA has also proposed new rules specifically for methane emissions. Methane, the combustible portion of natural gas, is 21 times more potent as a GHG than carbon dioxide. While natural gas is thought of as the “bridge” to renewable power, a fuel source that emits less GHGs when combusted compared to coal or oil, it is recognized that natural gas infrastructure (its mining and capturing and transport thousands of miles) results in leaks of methane into the atmosphere during these stages. And the disproportional climate change effects of methane may make up for the gains of lower carbon dioxide emissions of switching from coal or oil. The USEPA is committed to getting more serious about controls to reduce methane leakage and drive up efficiency.

Major US corporations are coming on board for Climate action.

As discussed in a recent blog (http://www.ccesworld.com/blog/giant-firms-demand-strong-carbon-deal/), a dozen of the largest companies in the world, including some thought to be totally against climate change action, came out publicly in favor of a comprehensive climate change deal in Paris, so that they can smartly plan for the long-term future. In addition, a number of Fortune 100 US firms have issued statements in favor of climate change action. With these gigantic firms in favor of meaningful climate change action, it is likely that their money and weight will influence government and public opinion, too, despite what some current US presidential candidates are saying.

These signs of improved technology, acceptance by the public, favorability of the market, and acceptance of powerful corporate interests demonstrate that Climate action is now her to stay, with tangible benefits for people and businesses in the future. The Paris Climate Summit is likely to be the crown for 2015 as the year that climate change became mainstream and becomes a portent of great changes in energy in our future.

CCES can help your firm prepare for the upcoming climate change realities and obtain the greatest benefits from smart planning as far as energy and sustainability go. We can develop climate change and sustainability plans for you and help you minimize use of energy, water, and other resources. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Case Study: CCES Performs Energy Audit for a Child Care Center

Climate Change & Environmental Services (CCES) performed an energy evaluation for a child care/senior care center in New York. The 20,000 square foot building had energy bills (electricity and gas) averaging about $10,000 per month. Energy costs threatened the financial viability of the center. A determination of potential energy saving strategies – small and large – to reduce energy usage and peak electric demand was needed.

CCES performed a comprehensive energy audit, meeting ASHRAE Level II standards for the center. CCES reviewed 3 years of recent energy usage and performed a walkthrough of the facility, collecting data. CCES developed a list of 10 strategies to reduce electricity and/or gas usage, all with positive payback, ranging from purchasing only ENERGY STAR products to upgrades of their HVAC system and installation of solar PV panels. CCES also recommended avenues to maximize financial incentives to partially pay the cost of implementing many of these suggested strategies.

The child care center was pleased with the long list of potential strategies, and will likely implement most, if not all of them in the near future to dig out of their heavy energy bills.

CCES has the experts to perform an energy audit of your building and develop multiple potential strategies for energy upgrades that will pay back the expenditure in a reasonable amount of time. We can also help you get government incentives to partially pay for this and financing so you pay nothing upfront for the upgrades and pay through the savings you achieve. Take advantage of the energy revolution for your maximum benefit. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Overcoming Skepticism About Energy Upgrades

In my practice, the most difficult problem I face is the skepticism of property owners and managers when it comes to the savings potential of energy upgrades. I usually deal with fellow engineers and scientists who understand options, can assess benefits, and have confidence the technology will work. But the real estate community thinks differently, and, I’ve learned, greatly fears any perceived risk. Even if there is a tiny chance in their minds that a potential energy upgrade may fail, they will stick with the status quo.

Commercial energy efficiency upgrades, therefore, are low priority items. What factors hold the industry back from going forward on definitely beneficial, cost-saving projects?

As I mentioned above, building owners are skeptical that energy retrofits will deliver a strong return on investment in the field. Some worry that a new technology may work “in theory, but not in my building, with my tenants!” But in most cases it is simple math; a 9-watt LED replacing a 60-watt light will save in actuality the appropriate number of kWh.

Owners are also concerned that overworked staff cannot oversee equipment performance and determine whether an upgrade is really achieving optimum energy efficiency gains. Many building owners also believe that energy is a relatively small cost of their business compared to salaries, taxes, and infrastructure. And if you take proposed annual energy savings and divide that by 12 months and the number of tenants, energy cost savings may be small, in their eyes, relative to the rent collected.

It is even a cultural matter, as building staff tend to think it is OK to work longer hours to maintain older equipment until it practically breaks down, rather than upgrade early to save labor. Staff normally address day-to-day challenges rather than think long-term.

How can this be overcome? Some in the insurance industry now offer insurance to guarantee performance. For payment of a certain premium, a building owner will know that its building’s energy upgrades will meet a certain energy cost savings in the first year after being fully implemented. If the real cost savings is less than that guaranteed, then the insurance company will pay the difference. Thus, for a premium, this takes away any concern that a proposed upgrade will fail to meet its stated goals “on paper.”

A second issue is financing. Many real estate owners already borrow greatly just to afford the buildings they own, and may have trouble qualifying for further financing.

Property-assessed clean energy (PACE) and on-bill financing are existing options addressing financing. PACE loan repayment appears on one’s property tax assessment and, therefore, are considered a higher priority than a mortgage. On-bill financing programs allow repayment based on savings based on utility bills. Government incentives exist to allow institutions to issue financing at lower rates than conventional loans, particularly for small buildings or those owned by non-profits. Building owners can also take advantage of competition among financing firms, as the excellent return on investment of energy projects is well known and better assures a loan will be repaid.

Some energy service companies offer financing, such as a power purchase agreement (PPA). Real estate investment trusts (REITs) which own income-producing real estate can also provide energy-related financing.

Between lowered costs, low interest rate financing, existence of government incentives (which are likely to disappear), and improved technology there has truly never been a better time for a building owner or manager to invest in a smart energy upgrade. Believe it; it is real and will benefit you and your occupants greatly!

CCES has the experience to help your building upgrade your energy systems in a smart and reliable way, ensuring success and maximizing both cost reductions and other benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.

The Importance of Right Lighting

In the last couple of years “everybody” has learned about the great cost savings to be achieved by switching to LED lights, direct cost savings of over 50% with additional savings due to reducing load on AC and reducing O&M. LEDs can be used in so many situations, can be dimmed, and now fit in virtually every type of fixture or ballast.

Thus the temptation is just to go to the store and pick up a bunch of LEDs and begin to substitute. Sure you’ll save some cost. But that’s a big mistake and you can actually harm the productivity of your workers, the ability to do business by your tenants, and the sellability of product by the retailers in your buildings.

In fact, even if you are not changing to LEDs, it is important to review your building’s lighting, as the very way we work has changed, as we have gone from reading and writing on paper exclusively to the common use of computers and other screens. Screens supply some light. Thus overhead lighting needs (number of lumens) of office workers to function well have dropped somewhat. Over-lighting is a potential issue, which increases costs, and may adversely affect worker health, mood, and productivity.

In the “old” days of exclusive working with paper, the recommended lighting levels were as high as 1,000 luxs (1 lux = 1 lumen/sq. meter). However, the US General Services Administration (http://www.gsa.gov/portal/content/101308) now recommends levels such as 500 lux for open offices, 300 lux for conference rooms, and less in other areas.

Therefore, it is useful before and after changing a building’s lighting to perform a lighting study. Have light readings taken to determine whether you are over-lighting an area. It may be tempting to say after an LED upgrade “I don’t care if I over-light my areas. My electricity costs are now so low, I don’t mind over-lighting.” This is a mistake as over-lighting stresses employees, causes headaches and anxiety, and may interfere with sleep and circadian rhythms. In other words, it may affect productivity, which could cost your company more money than is saved by switching to LEDs.

If you find areas of over-lighting, do some de-lamping: remove some lamps to bring the light levels down to the recommended intensities. Not only will you improve the productivity of your workers and tenants, but you will save additional energy costs and O&M having fewer lights using electricity. But make sure you don’t overdo de-lamping.

Finally, take into consideration the time of day. During different times of day, sunlight may enter certain workspaces. During those times, allow the sunlight in. Workers work better under natural light. Either procure/use daylighting sensors to adjust the artificial light to the sunlight entering from outside or turn down or off certain banks of lights when the sun shines in. Again, make the effort not to over-light areas.

CCES has the experts to conduct lighting studies for you and to make determinations of what types and intensities of lights should be brought in to meet standards for different uses and security. We can recommend the right daylight sensors for different parts of your building and where to re-locate lighting to get not the most, but the best lighting for your tenants and workers, based on their job needs. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Climate Change After the Pope’s Visit

The Pope came to the US last month and made very forceful and well-publicized arguments about the importance of addressing climate change soon. Of course, he emphasized the moral imperative: how wealthy countries contribute more to climate change, yet poorer countries will likely suffer more. This blog has discussed extensively the practical and business benefits of addressing climate change. One may not “believe” in climate change, yet benefit your company or entity financially by addressing it smartly. But with the aura of the Pope’s visit and his framing of the moral dimension and the upcoming meeting in Paris for potential rules and goals for GHG reduction, how does climate change affect not just the US as a whole, but your company, too? What are the most effective ways to meet the moral and financial priorities of climate change? Should we address climate change wholeheartedly or is it better to address it slowly?

The momentum to address climate change is growing, as a number of national polls show that climate change is being accepted as true and something that needs to be addressed by a growing majority of Americans (despite the demagoguery of some Presidential candidates). Climate change introduces a number of new, significant risks to our nation and institutions. And, many of the steps to be implemented to address climate change (reduction of GHG emissions) also provide direct economic benefits.

As a result, the trend to encourage companies and people to use less or de-carbonized sources of energy will likely continue. For example, Northeast power generators, forced to reduce GHG emissions because of the RGGI rule, have greatly exceeded the rule’s reduction goals, in part, because of the price differential between cleaner fuels and fuels used before the rule went into effect. Because of renewable goals that many states have set, large investments in renewable power are being made. Quietly, the fraction of power from renewable sources in the US is growing. There is also a growing movement of governments and utilities to encourage improved energy efficiency to save money on expensive energy infrastructure upgrades if power demand continues to grow. Energy efficiency is now understood as an investment that pays a better return than the vast majority of banks and Wall St. investments, and has ancillary benefits, such as reduced GHG and air toxic emissions, reduced O&M costs, and increased asset value.

Should the US, the states, and companies invest now in energy efficiency and in clean or cleaner energy technology now or should they wait? There is an argument that it may be better to wait to invest in reduced-carbon energy or energy efficiency, as initial costs of such technologies are expected to fall in the future as they become more common. On the other hand, there are significant costs to waiting to become more energy efficient and use lower-carbon or renewable power, such as:

• paying significantly higher energy costs for more energy used while waiting;

• probable future rules will reward those who reduce GHG emissions early; and

• the potential lower future value of carbon credits in the future as more entities reduce GHG emissions.

Similarly, should companies go “all in” now on reducing GHG emissions or should such moves wait for final global or US regulations to come out of the Paris UN conference or for other priorities to shake out? While the answer depends on the “culture” of each company, it is important to understand that actions to reduce GHG emissions almost always have not only direct, long-term cost savings benefits, but also harder-to-quantify benefits, such as reduced O&M, improved worker productivity, increase in asset value, and more productive tenants, that also improve the bottom line.

Therefore, waiting for exact requirements from the federal government, which will take years, even if US authorities make pledges in an approved agreement in Paris, can result in missed business opportunities for many companies. Just performing a basic GHG emission inventory (“carbon footprint”) and studying and eventually implementing energy reduction projects does not need to wait for an exact finality of regulatory requirements, and will likely not involve any re-inventing of the process.

Besides reducing GHG emissions as a response to climate change and the Pope and/or UN initiatives, another climate change issue that a company must assess is risk. What effects caused by climate change may affect a business.

Four types of climate change risk that could affect a business include:

1. Competitive (cost) risks
• Effect of a decline in consumer demand for energy-intensive product
• Rise in costs for your necessary processes which are energy intensive
• Rise in costs for necessary transportation fuels

2. Reputational risks from perceived inaction on climate change

3. Regulatory/compliance risks from future tightening legislation

4. Physical risks of climate change-influenced events (i.e., extreme weather, rising sea levels, etc.):
• Asset damage
• Inability to make or transport product, raw materials
• Health and safety risks
• Project delays
• Crop damage or agricultural transition as certain crops no longer are viable in certain areas and new supply chains become necessary

Outside the US, many companies have recognized and begun to study and implement strategies to minimize climate change-related risks. US companies have been slower to react. But as climate change is more recognized and accepted, spurred on in part by the Pope’s visit, this is something that is also important for many companies. Entities understand risk affecting operations, revenue, and even existence and deal with this routinely. Climate change represents another set of risks that entities should understand and address – independent of the Pope’s visit and the upcoming Paris UN conference.

CCES can help your firm develop a climate change program and prepare strategies to not only minimize risk, but also take advantage of energy realities to maximize financial benefits while reducing GHG emissions. Contact us today on this at 914-584-6720 or at karell@CCESworld.com.

Case Study: CCES Helps Implement Energy Upgrade for Transportation Hub

Climate Change & Environmental Services (CCES) was part of a team that designed and implemented the installation of occupancy sensors at a major transportation hub station in a large Northeast city. The transportation authority needed to demonstrate energy savings. While the hub is in use 24/7, many areas, including those not used by the public, were unoccupied for long stretches of time. It was understood that modern, properly designed and placed occupancy sensors would be very effective in saving the agency much in electricity usage and costs by automatically turning lights off in certain areas when unoccupied. This project was also part of the agency’s “green” program.

CCES provided technical assistance, reviewed drawings and plans and provided professional engineering certification of several dozen occupancy sensors installed throughout the complex. CCES also inspected the facility post-installation to ensure that the right sensor models were installed in the right locations within the proper rooms and areas and that they were operating properly based on design settings. The project was a success and the agency subsequently has saved substantial energy costs without impacting operations.

Giant Firms Demand Strong Carbon Deal

In the run up to the COP21 UN Climate Convention in Paris later this year in which nations intend to finalize a global deal on reducing greenhouse gas (GHG) emissions, six huge US banking institutions (https://www.ceres.org/files/bank-statement-on-climate-policy) and six major oil companies (http://newsroom.unfccc.int/unfccc-newsroom/major-oil-companies-letter-to-un/) called for both a strong global climate agreement and policies that recognize the cost of carbon.

JP Morgan Chase Bank, Bank of America, Wells Fargo, Citibank, Goldman Sachs, and Morgan Stanley, the 4 largest lending institutions and two largest investment banks with over $7.6 trillion in managed assets also committed to provide “significant resources” to finance climate solutions.

Officers from these banks issued an open letter for the UN’s General Assembly session for which climate change and sustainable development is strongly covered and as a prelude to the COP21 convention. The letter from the banks openly stated that climate change is real and is already threatening world prosperity. It also described efforts from their point of view – financing the changes for the world to become a low-carbon economy – as a “business opportunity” for them and the whole banking industry.

The statement indicated that while they believe fossil fuels will remain part of the global economy, it is important for an accelerated transition to clean power to begin soon with sound governmental policies.

The statement also called for policies to establish a future cost of carbon. While they did not advocate a specific policy, such as a carbon tax, governments need to recognize the need for carbon to have a cost as part of future economic policy. According to CERES, while many large corporations currently price carbon as part of their internal operations, these standards are disparate and national policies are needed, important to provide guidelines to value the emissions and reduction of GHG emissions.

The six major oil companies (BG Group, BP, Eni, Royal Dutch Shell, Statoil and Total) wrote their open letter to governments and the UN saying that they can take appropriate actions if governments provide clear, stable, and long-term rules and carbon pricing that puts a proper price on the environmental and economic costs of GHG emissions.

This is critical as the oil and gas industry, producers of fossil fuels that have contributed to climate change, has been the last to be “on board” with addressing the issue.

The letter recognizes that climate change is becoming one of the biggest risks of their and many other industries. Many companies want to implement positive solutions, such as renewable and efficient energy, reduced pollution and resilient economies, but need robust government policies to allow them to plan and invest in such projects properly.

These unequivocal open letters from bastions of industry and capitalism are particularly strong against the backdrop of the current US presidential campaign in which candidates of one party openly deny and mock climate change and state that reducing GHG emissions would hurt the economy. And in Congress, leaders like Senate Majority Leader Mitch McConnell openly vow to prevent the US from implementing any agreement to reduce GHG emissions and price carbon coming out of the COP21 UN Climate Convention.

CCES can help your company prepare for the coming clean energy revolution, helping you reduce GHG emissions by reducing your energy demand and usage and by assessing how you can create your own energy from renewable sources, in both cases, increasing your economic benefits. Contact us today to discuss this more at karell@CCESworld.com or at 914-584-6720.