Forty-four of the nation’s largest investors are urging Congress to seize the most important opportunity the nation has had in years and pass a far-reaching economic stimulus bill that funds energy efficiency, clean energy, and clean transportation.
If Congress acts now and acts wisely, private investment will follow, writes Kevin Parker, global head of Deutsche Asset Management, one of the 44.
This is not a group to be taken lightly. Together, its members represent $1.7 trillion worth of assets. They include the massive California Public Employees Retirement System (CalPERS), which is worth $174 billion alone, as well as the Florida State Treasury and the New York State Comptroller’s Office.
Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk, touched on some of their recommendations in her post yesterday. The group doesn’t want the federal government to start picking technology winners and losers, the way Treasury officials did with the bank bailout. Instead, it says, the stimulus plan should encourage a portfolio of technologies that will create jobs, new industries and new investment.
The immediate actions with the most potential economic upside, in the eyes of the investors, involve making the nation’s buildings, power grid, vehicles and homes more energy efficient. Investing in smart grid technology, including smart metering in homes and businesses, would clear the way for major efficiency and renewable energy improvements that could significantly cut energy waste and greenhouse gas emissions, encourage conservation, reduce the peak energy loads that force utilities to fire up additional plants, and at the same time put wind and solar power to optimal use.
"The economic downturn provides a historic opportunity for government to take charge of the fight against climate change rather being a reason to put off action," Parker said. "A ‘green’ stimulus will also have a wider effect by providing leadership for additional investment from the private sector."
In a letter to Congressional leaders, the investors urged the government to pressure lagging states by steering stimulus funds to those that adopt energy efficiency standards and emphasize efficiency over power plant expansion. To keep renewable resources on track, they urged Congress to extend the Production Tax Credit, which favors wind, geothermal and biomass projects. A study by consulting firm Navigant determined that the credits’ expiration in the past typically caused a 73 percent to 93 percent drop in new installations. That translates to fewer jobs and less investment, precisely what the stimulus plan seeks to avoid.
Our ability to continue to invest in the renewable energy and energy efficiency industries, and accelerate the growth of these industries, depends on a comprehensive and stable set of supportive policies, including the long-term extension of the PTC.
With the dire economic conditions we are facing, this is no time to fail to pass this critical legislation and thereby interrupt the greatest economic growth and job creation potential the U.S. market faces.
That’s some big money talking. Let’s hope Congress will set aside its political differences for the next few weeks and listen.