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Dear Mr. Trump, Efficiency + Renewables = Business Competitiveness

December 14, 2016

Dear Mr. Trump,

 

I respectfully ask you to substitute the term “business competitiveness” with “climate change” in advancing your policy agendas.  The relationship between these is simple, transitive and linear.

 

Averting Climate Change =

Efficiencies + Renewables =

Business Competitiveness

 

There are a number of macro trends and business strategies that demonstrate this equivalence.

 

LOWER ENERGY USE (VIA EFFICIENCIES & RENEWABLE ENERGY) RESULTS IN DECARBONIZATION

When efficiencies and renewable energy create low/no energy use, that by default creates low/no carbon emissions.  This reframe would provide the necessary political cover for you to support highly efficient (American) business, service and industry, while skirting the politically incendiary term “climate change”.

 

INTERNATIONAL MARKET COMPETITIVENESS & DECARBONIZATION ARE INTERTWINED – The move away from carbon-based fuels is an international movement.  For example, Canada just inked mandatory carbon pricing, which will drive efficiency and spawn new business … for Canadians.  The European Union has cap-and-trade in place for carbon emissions.  India instituted cap-and-trade in 2014, and China will next year.  For the United States to retrench on what the rest of the planet is doing puts us on a parallel path to nowhere.

 

RENEWABLE ENERGY AT COST PARITY WITH CONVENTIONAL FUELS

Solar energy is at “cost parity” with conventional fossil fuels in 80 percent of the world, says a study released by Deutsche Bank last year.  As of February 2016, 20 states have solar at a cost levelized with fossil fuels, with 42 total (84 percent) expected to be there by 2020when you will still be in office.  While the subject is complex, the plummeting costs and increasing efficiencies of solar and wind have rendered the costs of fossil fuels as non-competitive.  And the price for renewables continues to drop.

 

THE DEPARTMENT OF DEFENSEThe Department of Defense called out climate change as a major planetary threat.  The report pointed the finger at cattywampus weather like the five-year drought in Syria as a destabilizer resulting in Syrian exodus and Iraqi influx into the now-decimated nation.  (Read, the hollowed-out country became a comfy crib for ISIS.)  The DOD also mentioned its response to super storm Sandy, which left 8.5 million people without power, cost tens of billions of dollars in damages, and required mobilizing 14,000 DOD employees. 

 

LET AMERICA BE AMERICA – Americans are brilliant at developing and bringing to market innovation.  Elon Musk is an American entrepreneur reshaping both the gargantuan auto industry and utility landscape with his disruptive business models.  In supporting efficiencies + renewables, you increase the odds that the next Elon Musk is American and not Chinese, or Indian, or Canadian – because the markets are here and not elsewhere.

 

AMERICAN BRICKS & STICKS – Like sports cars, class “A” buildings house state-of-the-art systems and technologies.  Anytime a property owner chooses to build to a higher standard, that by default includes high-efficiency systems that are low-energy and water, with diminished waste streams. 

 

As you know, utility bills affect net operating income (NOI) and, thus, capitalization rates – one metric for valuing properties.  Incentivizing and continuing to mandate higher-performing properties not only affects property valuations (and thus local tax collections), it also encourages investment in innovative systems that move properties toward zero net-energy – a game-changer even when tenants pay the bills (triple-net leasing).

 

ERODING COASTLINES – The Atlantic Ocean and Gulf of Mexico are literally reclaiming the Eastern seaboard through rising municipal stormwater levels and “king tides,” flood surges.  Eroding coastlines in places like Florida are impacting property values and owners’ ability to sell homes and buildings.  One hurricane modeler, Karen Clark of Karen Clark & Co., foresees that global warming could result in 2 to 5 percent greater peak winds, and drive insurance rates 30 to 40 percent higher.   Those rising rates could leave property owners unable to meet mortgage payments, triggering large-scale mortgage defaults and draining local tax coffers. 

 

If you relax efficiency and renewable requirements citing climate change as a political hot potato (or worse, gut them altogether), American business will lose its competitive edge.  And if you shift government subsidies to conventional fuels against the backdrop of these bigger trends, you’re betting on losers. 

 

 

 

 

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