By EDF Blogs

By Ben Ratner and Michael Maher

This post originally appeared on Forbes.

Recently, at an oil and gas industry event co-hosted by Energy Dialogues and Shell in Houston, Ben Ratner, a Director at Environmental Defense Fund, met up with Michael Maher, presently with Rice University’s Baker Institute for Public Policy and a former longtime economist with ExxonMobil, to discuss the future of the natural gas industry. Specifically, they talked about the growing divide between those—in government and in the industry—who want less environmental regulation, particularly over the issue of methane emissions, and those who see sensible regulation as the best way for the industry to assure its future as offering a cleaner alternative to other, dirtier, fossil fuels.

Since Michael and Ben met in Houston, the Trump Administration announced the U.S. departure from the Paris climate agreement and postponements and potential weakening of methane emission rules from the Environmental Protection Agency and Bureau of Land Management. These new developments put the industry divide into sharper focus.

States could now step up to address issues that the federal government was poised to take the lead on under rules promulgated by President Obama toward the end of his term. But will states act without industry prodding or at least, support for action? And will companies most worried about license to operate intervene against delays, weakening, or even elimination of nationwide standards? Mike and Ben discuss below.

Ben: As a former oil and gas industry employee, how do you think the industry should respond to the regulatory rollbacks of the Trump administration?

Michael: This administration is moving rapidly away from a federal role in climate change policies. The question for the oil and gas industry is whether to sit back and coast on the federal failure to act or to work with states to address greenhouse emissions. Coasting may look like a cost saver for the near term, but the pendulum will eventually swing back, and a reversal of Trump’s policies is a real prospect down the road. However, if enough states—with industry support—were to effectively address methane emissions it could provide guidance for federal action down the road and protect the industry against the reputational damage of being seen to have resisted sound environmental regulation.

Michael: In the current political climate, what do you see as the role of leading companies?

Ben: The great irony here is that while the Trump attacks on environmental standards are intended to help industry by reducing costs in the short term, they may end up inflicting much greater long-term damage. A classic case of “short term gain, long term pain.”

Energy consumers, institutional investors and citizens want cleaner energy, and scrapping rules that help the industry clean up may ultimately endanger the industry’s social license to operate and make it more difficult to do business. So we will be looking hard to see which companies step forward to slow down the deregulatory torrent that is tarnishing the industry’s reputation just as demand for cleaner energy is lifting off.

In recent days, Shell and Exxon reportedly stated that they are complying with EPA’s contested methane rules, but other companies have stayed silent. Companies like ConocoPhillips and BP voiced their support for the Paris international climate agreement. With the U.S. now withdrawing from the Paris accord, will companies like these make good on addressing climate change by publicly supporting policies aimed at reducing methane emissions? We haven’t seen true industry support at the federal regulatory level, at least not yet.

At the same time, regardless of what happens in Washington, states have a golden opportunity to develop their own methane policies. In Colorado, for example, companies like Noble Energy and Anadarko worked with EDF and the state to negotiate methane and air pollution standards that work for business and the environment.

Industry played a vital role in Colorado’s success, and there will be more opportunities for industry leaders to participate in regulatory development in other states.

Ben: Are there business and reputational impacts of failing to address methane emissions?

Michael: Natural gas has historically competed with other sellers with other fuels almost totally on price. But customers and officials are increasingly looking at energy options based on environmental benefits and not just price. There is a robust debate in the Northeast, for example, about how to move forward in decarbonizing their electric power system and it is not focused solely on the costs of alternatives.

In this regard, it is in the interest of the natural gas industry to be able to promote natural gas as a much cleaner alternative to coal. But methane and associated emissions from natural gas drilling operations cloud that cleaner-than-coal claim and plays into the hands of those supporting a more rapid shift to renewables and who argue for “keeping it in the ground.”

Michael: How does EDF view methane control as part of a company’s social responsibility?

Ben: How a company manages its natural gas leaks tells you a great deal about how responsible it is, because leaks cause climate damage and can harm people’s health—especially among the most vulnerable, like children and the elderly. Also, since methane is a commercial product, if a company doesn’t know or care how much of its own product is going into thin air, that’s not a good sign.

Southwestern Energy is one example of a leader that sets a methane target, conveys to its people the value of methane management, and implements leading practices in the field. Another is Statoil, which is working with EDF and an entrepreneur to pioneer efficient new automated methane monitoring technology. These kinds of efforts can deliver financial value by recouping lost product, and demonstrating to investors, communities and other key stakeholders their lived commitment to responsible corporate behavior.

Ben: How do you see the industry tackling the methane problem?

Michael: Farsighted, well operated companies are already taking action to cut emissions, but sometimes the policy advocacy lags behind. There needs to be leadership on this issue from major players—not just singly but as a coalition urging federal agencies to retain or improve rules, rather than delay or weaken them. This coalition should also engage states in developing sound regulation of new drilling and older wells.

Some in industry are already pushing ahead with testing new technology that would reduce the cost of controlling emissions. That effort should continue, but voluntary action of this sort is not a replacement for regulations that apply across the entire industry. Nor will piecemeal voluntary efforts of a few overcome the stigma of hundreds of other companies abstaining from action to reduce their methane emissions.

Michael Maher is a senior program advisor at the Center for Energy Studies at Rice University’s Baker Institute for Public Policy

Ben Ratner is a Director with EDF+Business at Environmental Defense Fund

By Eric Holst

The bald eagle was listed as endangered in 1963. It was successfully recovered and delisted by 2007.

The Endangered Species Act (ESA) is one of our nation’s bedrock environmental laws, preventing the extinction and helping the recovery of many American icons, including our national symbol – the bald eagle.

The act had the unanimous support of the Senate and a near-unanimous vote in the House when it was signed into law by President Richard Nixon in 1973. Today, 90 percent of American voters still support the law and want to see it maintained.

The ESA’s ongoing bipartisan history and continued support from the American public sends a clear message to Congress: Protect the integrity of the ESA.

The leading federal agencies responsible for effectively administering the ESA are the U.S. Fish and Wildlife Service and the National Marine Fisheries Service.

The divisive climate in Washington makes it risky for even well-intentioned proposals aimed at improving the law, but that doesn’t mean policymakers can’t work together to improve ESA implementation through administrative means.

Rather than focusing on legislative changes to the Endangered Species Act, Congress can and should honor the bipartisan history of the ESA by supporting flexible, efficient and cooperative administrative solutions that can improve outcomes for both people and wildlife.

Fortunately, western governors and other stakeholders from the agriculture, energy and conservation sectors have already come together through a series of workshops and roundtables to draw up some recommendations.

The western governors’ policy resolution “for improving the efficacy of the ESA” was released last month. It included a number of innovative and commendable ideas that can and should be pursued, but only through existing administrative channels without changes to the law:

• Increase federal-state collaboration by developing templates and tools to incentivize voluntary conservation. Encourage state participation in recovery planning.
• Encourage the U.S. Fish and Wildlife Service (USFWS) to develop Species Status Assessments to help inform listing decisions and, if needed, a recovery plan blueprint to encourage conservation actions.
• Implement recovery plans that provide clearer and earlier guidance for recovery, delisting or downlisting.
• Establish a “playbook” to inform citizens on how to engage throughout various steps of the ESA process.

Several of the western governors’ recommendations included possible changes to the USFWS’s budget. For example, there is a recommendation to allocate funds for a specific line item to assist stakeholders in seeking assurance agreements and other voluntary conservation efforts. Boosting funds for incentive programs is a worthwhile pursuit, but it must be part of a budget that meets all other important functions of the ESA, including listing, delisting and recovery efforts.

The collaborative conservation effort that led to a "not warranted" listing decision in September 2015 received bipartisan support from western governors.

Another set of recommendations that could undermine the ability of the ESA to conserve imperiled species are those that weaken the action-forcing deadlines that have been a part of the law since 1982. Increasing regulatory flexibility around listing timelines with no backstop or accountability would make space for politics to influence or undermine the science of listing decisions, create great uncertainty for stakeholders, and increase the threat of extinction.

Ultimately, for any proposed legislative changes, the devil is in the details. That’s why it is essential that any congressional action on ESA is consistent with the science-based foundation of this law and, as articulated in the western governors' Policy Resolution 2017-11, is “developed in a fashion that results in broad bipartisan support and maintains the intent of the ESA to protect and recover imperiled species.”

The leadership that the western governors, particularly Wyoming Governor Matt Mead, have shown in bringing together multiple and diverse stakeholders to the table to discuss ways to improve conservation efforts through the ESA is praiseworthy and should be continued into the future.

There is certainly opportunity for more innovation and cooperation with regard to the way that we manage wildlife in America. We just have to ensure that the core of the ESA is not only maintained but strengthened so that future generations can enjoy our nation’s treasured wildlife and wild places for many years to come.

Related:

What we've learned from 50 years of wildlife conservation >>

The “dean of endangered species protection” on the past, present and future of America’s wildlife >>

Ranchers and conservationists step up to avert listing of sage-grouse >>

By Eric Holst

The bald eagle was listed as endangered in 1963. It was successfully recovered and delisted by 2007.

The Endangered Species Act (ESA) is one of our nation’s bedrock environmental laws, preventing the extinction and helping the recovery of many American icons, including our national symbol – the bald eagle.

The act had the unanimous support of the Senate and a near-unanimous vote in the House when it was signed into law by President Richard Nixon in 1973. Today, 90 percent of American voters still support the law and want to see it maintained.

The ESA’s ongoing bipartisan history and continued support from the American public sends a clear message to Congress: Protect the integrity of the ESA.

The leading federal agencies responsible for effectively administering the ESA are the U.S. Fish and Wildlife Service and the National Marine Fisheries Service.

The divisive climate in Washington makes it risky for even well-intentioned proposals aimed at improving the law, but that doesn’t mean policymakers can’t work together to improve ESA implementation through administrative means.

Rather than focusing on legislative changes to the Endangered Species Act, Congress can and should honor the bipartisan history of the ESA by supporting flexible, efficient and cooperative administrative solutions that can improve outcomes for both people and wildlife.

Fortunately, western governors and other stakeholders from the agriculture, energy and conservation sectors have already come together through a series of workshops and roundtables to draw up some recommendations.

The western governors’ policy resolution “for improving the efficacy of the ESA” was released last month. It included a number of innovative and commendable ideas that can and should be pursued, but only through existing administrative channels without changes to the law:

• Increase federal-state collaboration by developing templates and tools to incentivize voluntary conservation. Encourage state participation in recovery planning.
• Encourage the U.S. Fish and Wildlife Service (USFWS) to develop Species Status Assessments to help inform listing decisions and, if needed, a recovery plan blueprint to encourage conservation actions.
• Implement recovery plans that provide clearer and earlier guidance for recovery, delisting or downlisting.
• Establish a “playbook” to inform citizens on how to engage throughout various steps of the ESA process.

Several of the western governors’ recommendations included possible changes to the USFWS’s budget. For example, there is a recommendation to allocate funds for a specific line item to assist stakeholders in seeking assurance agreements and other voluntary conservation efforts. Boosting funds for incentive programs is a worthwhile pursuit, but it must be part of a budget that meets all other important functions of the ESA, including listing, delisting and recovery efforts.

The collaborative conservation effort that led to a "not warranted" listing decision in September 2015 received bipartisan support from western governors.

Another set of recommendations that could undermine the ability of the ESA to conserve imperiled species are those that weaken the action-forcing deadlines that have been a part of the law since 1982. Increasing regulatory flexibility around listing timelines with no backstop or accountability would make space for politics to influence or undermine the science of listing decisions, create great uncertainty for stakeholders, and increase the threat of extinction.

Ultimately, for any proposed legislative changes, the devil is in the details. That’s why it is essential that any congressional action on ESA is consistent with the science-based foundation of this law and, as articulated in the western governors' Policy Resolution 2017-11, is “developed in a fashion that results in broad bipartisan support and maintains the intent of the ESA to protect and recover imperiled species.”

The leadership that the western governors, particularly Wyoming Governor Matt Mead, have shown in bringing together multiple and diverse stakeholders to the table to discuss ways to improve conservation efforts through the ESA is praiseworthy and should be continued into the future.

There is certainly opportunity for more innovation and cooperation with regard to the way that we manage wildlife in America. We just have to ensure that the core of the ESA is not only maintained but strengthened so that future generations can enjoy our nation’s treasured wildlife and wild places for many years to come.

Related:

What we've learned from 50 years of wildlife conservation >>

The “dean of endangered species protection” on the past, present and future of America’s wildlife >>

Ranchers and conservationists step up to avert listing of sage-grouse >>

As public scoping meetings begin, groups call on permitting agencies to act swiftly FOR IMMEDIATE RELEASE (NEW ORLEANS – July 20, 2017) Later today, the U.S. Army Corps of Engineers (Corps) will hold its first public scoping meeting to inform development of the Environmental Impact Statement (EIS) for the Mid-Barataria Sediment Diversion, with additional meetings to be held through July 27. During the scoping process, as required under the National Environmental Policy Act (NEPA), stakeholders will have an opportunity to ...

The post Conservation Groups: After 30 Years of Studies, Get Mid-Barataria Sediment Diversion Constructed Quickly appeared first on Restore the Mississippi River Delta.

As public scoping meetings begin, groups call on permitting agencies to act swiftly FOR IMMEDIATE RELEASE (NEW ORLEANS – July 20, 2017) Later today, the U.S. Army Corps of Engineers (Corps) will hold its first public scoping meeting to inform development of the Environmental Impact Statement (EIS) for the Mid-Barataria Sediment Diversion, with additional meetings to be held through July 27. During the scoping process, as required under the National Environmental Policy Act (NEPA), stakeholders will have an opportunity to ...

The post Conservation Groups: After 30 Years of Studies, Get Mid-Barataria Sediment Diversion Constructed Quickly appeared first on Restore the Mississippi River Delta.

As public scoping meetings begin, groups call on permitting agencies to act swiftly FOR IMMEDIATE RELEASE (NEW ORLEANS – July 20, 2017) Later today, the U.S. Army Corps of Engineers (Corps) will hold its first public scoping meeting to inform development of the Environmental Impact Statement (EIS) for the Mid-Barataria Sediment Diversion, with additional meetings to be held through July 27. During the scoping process, as required under the National Environmental Policy Act (NEPA), stakeholders will have an opportunity to ...

The post Conservation Groups: After 30 Years of Studies, Get Mid-Barataria Sediment Diversion Constructed Quickly appeared first on Restore the Mississippi River Delta.

California’s elected leaders showed that even with deep partisan divides fissuring Washington, D.C., Democrats and Republicans can still come together

Written by Moms Clean Air Force

James Hansen and his granddaughter, Sophie

This was written by Tim Radford. It orginally posted at EcoWatch:

One of the world’s most famous climate scientists has just calculated the financial burden that tomorrow’s young citizens will face to keep the globe at a habitable temperature and contain global warming and climate change—a $535 trillion bill.

And much of that will go on expensive technologies engineered to suck 1,000 billion metric tons of the greenhouse gas carbon dioxide from the air by the year 2100.

Of course, if humans started to reduce greenhouse gas emissions by six percent a year right now, the end of the century challenge would be to take 150 billion tonnes from the atmosphere, and most of this could be achieved simply by better forest and agricultural management, according to a new study in the journal Earth System Dynamics.

The study, authored by researchers from the U.S., France, China, the UK and Australia, rests on two arguments.

Slow start

One is that although the world’s nations vowed in Paris in 2015 to contain global warming by 2100 to “well below” 2°C relative to the average global temperatures for most of the planet’s history since the last Ice Age, concerted international action has been slow to start. One nation—the U.S.—has already announced that it will withdraw from the Paris agreement.

The other argument is that, even if humans do in the decades to come rise to the challenge, it could be too late: by then greenhouse gas concentrations could have reached a level in the atmosphere that would in the long run condemn the world to sea level rises of several meters, and a succession of economic and humanitarian disasters.

“Continued high fossil fuel emissions would saddle young people with a massive, expensive cleanup problem and growing deleterious climate impacts, which should provide incentive and obligation for governments to alter energy policies without further delay,” said professor James Hansen, of the Columbia University Earth Institute, who led the study.

Hansen, as director of NASA’s Institute for Space Studies, made global headlines in 1988, during a severe drought and heatwave on the North American continent, when he told a Washington senate committee, “It’s time to stop waffling so much and say the evidence is pretty strong that the greenhouse effect is here.”

Legal testimony

With that one sentence, he made climate science an enduring item on the political agenda. But the latest study is also part of a legal argument. It is, in effect, testimony in the lawsuit Juliana v. U.S.

This case began under the last U.S. administration. However, the U.S. President Donald Trump, who has dismissed the evidence of climate change as a “hoax,” has now been named in the case.

Hansen has argued that even the ambitions of the historic Paris agreement will not be enough to avert disaster and displacement for millions. The benchmark for geologically recent warming levels was set 115,000 years ago, during a period between two Ice Ages, known to geologists as the Eemian.

“We show that a target of limiting global warming to no more than +2°C relative to pre-industrial levels is not sufficient, as +2°C would be warmer than the Eemian period, when sea level reached plus 6-9 meters relative to today,” Hansen said.

Lower CO2

At the heart of such arguments are calculations about imponderables that climatologists like to call the carbon budget and climate sensitivity. The first of these concerns the terrestrial and oceanic processes that release greenhouse gases into the atmosphere and then absorb them, and the second is a calculation about what a change in carbon dioxide levels really means for average global temperatures.

For most of human history, CO2 levels were around 280 parts per million. In the last two years they have reached 400 ppm, as a response to two centuries of fossil fuel combustion, and average global temperatures have risen by almost 1°C, with a record reading in 2016 of 1.3°C.

Hansen and his colleagues want to see these atmospheric CO2 levels lowered to 350 ppm, to bring global temperature rise down to no more than a rise of 1°C later this century.

If the world’s nations can co-operate to do that, then most of the hard work to remove the carbon dioxide surplus from the air could be left to the world’s great forests.

However, if carbon emissions go on growing at two percent a year (and during this century, they have grown faster), then those who are children now would have to commit to a costly technological answer based on the belief that carbon dioxide can be captured, compressed and stored deep underground.

Nobody knows how to do this on any significant scale. And if it could be done, it would be expensive: an estimated $535 trillion.

“It is apparent that governments are leaving this problem on the shoulders of young people. This will not be easy or inexpensive,” said Hansen.

“We wanted to quantify the burden that is being left for young people, to support not only the legal case against the U.S. government, but also many other cases that can be brought against other governments.”

Reposted with permission from our media associate Climate News Network.
Photo: Our Children’s Trust

TELL CONGRESS: NOBODY VOTED TO MAKE AMERICA DIRTY AGAIN

By Dakota Gangi

To address the world’s most pressing environmental challenges, we must catalyze large-scale private investment in innovative environmental solutions. One place where such solutions are greatly needed is Louisiana, where more than 2,000 square miles of coastal land have vanished since the 1930s, putting communities and industries at risk from the effects of rising seas and increased storm surges.

This week, EDF begins work to develop the nation’s second Environmental Impact Bond, with support from NatureVest’s new Conservation Investment Accelerator Program. In collaboration with our partners, Quantified Ventures and Louisiana’s Coastal Protection and Restoration Authority, EDF will bring public, private and non-profit resources together to accelerate Louisiana’s coastal restoration and resiliency plans through a new Louisiana Coastal Wetland Restoration and Resilience Environmental Impact Bond.

Coastal wetlands are a form of “natural infrastructure” that provide storm protection by attenuating wave energy. Continual loss reduces these protective services, potentially increasing damage from a single storm by as much as $138 billion and generating an additional $53 billion in lost economic output from storm disruptions. If no actions are taken to restore and protect the coast, Louisiana could lose an additional 1,750 square miles of wetlands by 2060, posing a direct risk to as much as $3.6 billion in assets that support $7.6 billion in economic activity each year.

Can sustainable finance help save Louisiana’s Gulf Coast?

While Louisiana expects 15 years of Gulf oil spill-related funds to support restoration work, the state has identified less than half of the funding necessary. A pay-for-success environmental impact bond backed by these cash flows can help to close this funding gap by mobilizing funds from the private sector to accelerate the pace of restoration project implementation. Restoring the coast earlier in the planning horizon will allow the state to realize long-term cost savings.

Pay-for-success (PFS) is a form of performance-based contracting that ties payment for service provision to the achievement of measurable outcomes. The PFS model has emerged as a promising approach to fund social and environmental innovation. Quantified Ventures, a pay-for-success transaction specialist, paved the way for applying PFS in an environmental context with the development of DC Water’s 2016 Environmental Impact Bond (EIB).

In September 2016, the District of Columbia Water and Sewer Authority (DC Water) raised $25 million from institutional investors Goldman Sachs Urban Investment Group and Calvert Foundation to finance the construction of green infrastructure projects that will reduce the volume of stormwater runoff entering the sewer system, thereby reducing combined sewer overflow events. If the projects perform as expected, DC Water will pay investors in accordance with the initial term rate of 3.43%. If the project outperforms expectations, DC Water will make an additional payment to investors for sharing its risk in the project. If the projects underperform expectations, then investors will make a payment to DC Water.

By sharing project risks between public and private sector partners, environmental impact bonds allow public entities to support innovative environmental solutions and private entities to put their risk-seeking capital to work. Given that sea level rise, land subsidence, storms and hurricanes add uncertainty to the successful outcome of wetland restoration, an EIB can shift part of a restoration project’s risk from Louisiana’s Coastal Protection and Restoration Authority (CPRA) to investors.

In collaboration with CPRA, EDF will select a wetland restoration project from Louisiana’s 2017 Coastal Master Plan to demonstrate the feasibility of an EIB for coastal restoration. This EIB will serve as a blueprint for investments in coastal resilience throughout Louisiana and other coastal states. We expect it may even usher in a new era of private investment in coastal resilience to help cities in the U.S. and across the globe that are already experiencing the adverse effects of climate change and are looking for solutions.

Public, Private, and Non-profit collaboration needed for a sustainable future

The amount of capital required to transition to a low-carbon economy, adapt our infrastructure to cope with the damaging effects of climate change, and preserve healthy ecosystems far exceeds the capacity of the philanthropic and public sectors alone. Of the estimated $1.5 trillion annual investment needed, roughly $700 billion is currently being invested. Innovative green investment products – like environmental impact bonds and green bonds – are helping to fill the $800 billion funding gap that remains.

We recognize that financial institutions have a role to play in addressing environmental challenges that goes beyond their direct investment dollars. EDF’s sustainable finance strategy seeks to leverage the influence, expertise and capital of the financial marketplace to protect the environment, improve livelihoods and achieve the ambitions goals in Blueprint 2020.

Dakota Gangi, Sustainable Finance and Impact Investing Manager and William K. Bowes, Jr. Fellow, EDF+Business

With the support from NatureVest’s Conservation Accelerator Program, EDF has an exciting opportunity to demonstrate how collaboration between the public, private, and non-profit sectors can address a critical environmental issue. We are excited to be working with Quantified Ventures and the state of Louisiana on this pilot project and hope that it will serve as a model for crowding-in private capital for coastal resiliency and restoration projects around the world.

Follow EDF + Biz on Twitter, @EDFBiz

Stay on top of the latest facts, information and resources aimed at the intersection of business and the environment. Sign up for the EDF+Business blog. [contact-form-7]

By Dakota Gangi

To address the world’s most pressing environmental challenges, we must catalyze large-scale private investment in innovative environmental solutions. One place where such solutions are greatly needed is Louisiana, where more than 2,000 square miles of coastal land have vanished since the 1930s, putting communities and industries at risk from the effects of rising seas and increased storm surges.

This week, EDF begins work to develop the nation’s second Environmental Impact Bond, with support from NatureVest’s new Conservation Investment Accelerator Program. In collaboration with our partners, Quantified Ventures and Louisiana’s Coastal Protection and Restoration Authority, EDF will bring public, private and non-profit resources together to accelerate Louisiana’s coastal restoration and resiliency plans through a new Louisiana Coastal Wetland Restoration and Resilience Environmental Impact Bond.

Coastal wetlands are a form of “natural infrastructure” that provide storm protection by attenuating wave energy. Continual loss reduces these protective services, potentially increasing damage from a single storm by as much as $138 billion and generating an additional $53 billion in lost economic output from storm disruptions. If no actions are taken to restore and protect the coast, Louisiana could lose an additional 1,750 square miles of wetlands by 2060, posing a direct risk to as much as $3.6 billion in assets that support $7.6 billion in economic activity each year.

Can sustainable finance help save Louisiana’s Gulf Coast?

While Louisiana expects 15 years of Gulf oil spill-related funds to support restoration work, the state has identified less than half of the funding necessary. A pay-for-success environmental impact bond backed by these cash flows can help to close this funding gap by mobilizing funds from the private sector to accelerate the pace of restoration project implementation. Restoring the coast earlier in the planning horizon will allow the state to realize long-term cost savings.

Pay-for-success (PFS) is a form of performance-based contracting that ties payment for service provision to the achievement of measurable outcomes. The PFS model has emerged as a promising approach to fund social and environmental innovation. Quantified Ventures, a pay-for-success transaction specialist, paved the way for applying PFS in an environmental context with the development of DC Water’s 2016 Environmental Impact Bond (EIB).

In September 2016, the District of Columbia Water and Sewer Authority (DC Water) raised $25 million from institutional investors Goldman Sachs Urban Investment Group and Calvert Foundation to finance the construction of green infrastructure projects that will reduce the volume of stormwater runoff entering the sewer system, thereby reducing combined sewer overflow events. If the projects perform as expected, DC Water will pay investors in accordance with the initial term rate of 3.43%. If the project outperforms expectations, DC Water will make an additional payment to investors for sharing its risk in the project. If the projects underperform expectations, then investors will make a payment to DC Water.

By sharing project risks between public and private sector partners, environmental impact bonds allow public entities to support innovative environmental solutions and private entities to put their risk-seeking capital to work. Given that sea level rise, land subsidence, storms and hurricanes add uncertainty to the successful outcome of wetland restoration, an EIB can shift part of a restoration project’s risk from Louisiana’s Coastal Protection and Restoration Authority (CPRA) to investors.

In collaboration with CPRA, EDF will select a wetland restoration project from Louisiana’s 2017 Coastal Master Plan to demonstrate the feasibility of an EIB for coastal restoration. This EIB will serve as a blueprint for investments in coastal resilience throughout Louisiana and other coastal states. We expect it may even usher in a new era of private investment in coastal resilience to help cities in the U.S. and across the globe that are already experiencing the adverse effects of climate change and are looking for solutions.

Public, Private, and Non-profit collaboration needed for a sustainable future

The amount of capital required to transition to a low-carbon economy, adapt our infrastructure to cope with the damaging effects of climate change, and preserve healthy ecosystems far exceeds the capacity of the philanthropic and public sectors alone. Of the estimated $1.5 trillion annual investment needed, roughly $700 billion is currently being invested. Innovative green investment products – like environmental impact bonds and green bonds – are helping to fill the $800 billion funding gap that remains.

We recognize that financial institutions have a role to play in addressing environmental challenges that goes beyond their direct investment dollars. EDF’s sustainable finance strategy seeks to leverage the influence, expertise and capital of the financial marketplace to protect the environment, improve livelihoods and achieve the ambitions goals in Blueprint 2020.

Dakota Gangi, Sustainable Finance and Impact Investing Manager and William K. Bowes, Jr. Fellow, EDF+Business

With the support from NatureVest’s Conservation Accelerator Program, EDF has an exciting opportunity to demonstrate how collaboration between the public, private, and non-profit sectors can address a critical environmental issue. We are excited to be working with Quantified Ventures and the state of Louisiana on this pilot project and hope that it will serve as a model for crowding-in private capital for coastal resiliency and restoration projects around the world.

Follow EDF + Biz on Twitter, @EDFBiz

Stay on top of the latest facts, information and resources aimed at the intersection of business and the environment. Sign up for the EDF+Business blog. [contact-form-7]

By EDF Blogs

A message to our RSS subscribers:

We are making a change to how our blog subscriptions are managed. Please update your RSS feed URL to: http://blogs.edf.org/health/feed/ by Thursday, July 27th to ensure you don't miss a blog.

By EDF Blogs

By Rebecca Goold, clean energy consultant

Last week, a federal judge protected Illinois’ Future Energy Jobs Act, which is expected to grow the state’s solar capacity to over 3,000 MW by 2030 – enough to power approximately half a million homes.

The expected influx in distributed resources like solar panels prompted the Illinois Commerce Commission (ICC) to set in motion NextGrid, an 18-month study focused on rethinking the roles of the utility, the customer, and energy solution providers in a 21st-century electric grid.

A large part of NextGrid involves advanced technologies like the smart inverter, a disruptive technology with the potential to improve grid reliability, create economic value for customers, and lower pollution.

Smart inverters

Most of the electric power entering our homes, offices, and factories from the grid is in the form of an alternating current (AC), which allows for greater efficiency given our existing electric system design. Solar panels and batteries, in contrast, produce electricity in the form of a direct current (DC). In order to integrate these distributed energy resources into the electric system, a device called an inverter is used to convert DC to AC.

Illinois explores smart inverters’ potential to strengthen grid reliability
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To be considered “smart,” an inverter must have robust software and be capable of rapid, bidirectional communications. Historically, inverters operating behind distributed resources would immediately shut off during any disturbance to the electric grid. For example, when there is a sudden increase in electricity demand, the grid may have fluctuations in frequency. Previously, solar inverters would immediately shut down once the grid’s frequency or voltage went outside of normal operating levels.

Smart inverters, on the other hand, can support utilities’ efforts to stabilize the grid during disruptive events. Through seamless communication between grid operators and the inverter, utilities can remotely control these technologies to help with issues such as voltage and frequency fluctuations – if policy and regulations allow utilities to do so.

Utilities pushing forward

Smart inverters are attracting the attention of policymakers and utilities, who are pushing the limits to see how this technology can function:

• Hawaii is working closely with inverter manufacturers to improve grid stability.
• Arizona has deployed pilot projects that use smart inverters to operate a fleet of rooftop solar as though it is a traditional power plant.
• California is tackling the communication standards behind smart inverters, focusing on common language between the grid and the inverters.

Initiatives like these are beginning to show that smart inverters can provide crucial services that enhance grid reliability.

Illinois’ next steps

NextGrid tasked Illinois utilities to outline the services a smart inverter will provide, and how those services will be compensated. The ICC said,

“These developments promise even greater future consumer and societal benefits as customers start to take advantage of the emerging convergence between the electric and technology industries. The grid is moving closer to the integration of distributed energy sources and a transactional framework giving customers the opportunities to buy, sell, produce and store power.”

If NextGrid is successful in creating an animated market, there likely will be an influx in compensation for alternative services.

Therefore, as smart inverters and other advanced technologies become a fundamental component to the modern grid, they have the potential to enable new markets and add economic value. If Illinois’ NextGrid is successful in creating an animated market, there likely will be an influx in compensation for alternative services, including smart inverter capabilities, allowing entrepreneurs and savvy customers to earn money by providing these services.

In addition to increased grid reliability and economic opportunity, unlocking the full potential of these intelligent power-electronics can lower air pollution in Illinois. By allowing for the integration of more clean energy – like solar panels and storage of renewable energy – onto the grid, smart inverters could lower reliance on traditional fossil fuels that pollute.

Illinois and many utilities around the country are exploring how to maximize new grid technologies such as smart inverters. Through the Future Energy Jobs Act and NextGrid, Illinois has the opportunity to enhance reliability, open up new markets, and empower customers, while creating an electricity infrastructure that supports cleaner energy.

By EDF Blogs

By Rebecca Goold, clean energy consultant

Last week, a federal judge protected Illinois’ Future Energy Jobs Act, which is expected to grow the state’s solar capacity to over 3,000 MW by 2030 – enough to power approximately half a million homes.

The expected influx in distributed resources like solar panels prompted the Illinois Commerce Commission (ICC) to set in motion NextGrid, an 18-month study focused on rethinking the roles of the utility, the customer, and energy solution providers in a 21st-century electric grid.

A large part of NextGrid involves advanced technologies like the smart inverter, a disruptive technology with the potential to improve grid reliability, create economic value for customers, and lower pollution.

Smart inverters

Most of the electric power entering our homes, offices, and factories from the grid is in the form of an alternating current (AC), which allows for greater efficiency given our existing electric system design. Solar panels and batteries, in contrast, produce electricity in the form of a direct current (DC). In order to integrate these distributed energy resources into the electric system, a device called an inverter is used to convert DC to AC.

Illinois explores smart inverters’ potential to strengthen grid reliability
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To be considered “smart,” an inverter must have robust software and be capable of rapid, bidirectional communications. Historically, inverters operating behind distributed resources would immediately shut off during any disturbance to the electric grid. For example, when there is a sudden increase in electricity demand, the grid may have fluctuations in frequency. Previously, solar inverters would immediately shut down once the grid’s frequency or voltage went outside of normal operating levels.

Smart inverters, on the other hand, can support utilities’ efforts to stabilize the grid during disruptive events. Through seamless communication between grid operators and the inverter, utilities can remotely control these technologies to help with issues such as voltage and frequency fluctuations – if policy and regulations allow utilities to do so.

Utilities pushing forward

Smart inverters are attracting the attention of policymakers and utilities, who are pushing the limits to see how this technology can function:

• Hawaii is working closely with inverter manufacturers to improve grid stability.
• Arizona has deployed pilot projects that use smart inverters to operate a fleet of rooftop solar as though it is a traditional power plant.
• California is tackling the communication standards behind smart inverters, focusing on common language between the grid and the inverters.

Initiatives like these are beginning to show that smart inverters can provide crucial services that enhance grid reliability.

Illinois’ next steps

NextGrid tasked Illinois utilities to outline the services a smart inverter will provide, and how those services will be compensated. The ICC said,

“These developments promise even greater future consumer and societal benefits as customers start to take advantage of the emerging convergence between the electric and technology industries. The grid is moving closer to the integration of distributed energy sources and a transactional framework giving customers the opportunities to buy, sell, produce and store power.”

If NextGrid is successful in creating an animated market, there likely will be an influx in compensation for alternative services.

Therefore, as smart inverters and other advanced technologies become a fundamental component to the modern grid, they have the potential to enable new markets and add economic value. If Illinois’ NextGrid is successful in creating an animated market, there likely will be an influx in compensation for alternative services, including smart inverter capabilities, allowing entrepreneurs and savvy customers to earn money by providing these services.

In addition to increased grid reliability and economic opportunity, unlocking the full potential of these intelligent power-electronics can lower air pollution in Illinois. By allowing for the integration of more clean energy – like solar panels and storage of renewable energy – onto the grid, smart inverters could lower reliance on traditional fossil fuels that pollute.

Illinois and many utilities around the country are exploring how to maximize new grid technologies such as smart inverters. Through the Future Energy Jobs Act and NextGrid, Illinois has the opportunity to enhance reliability, open up new markets, and empower customers, while creating an electricity infrastructure that supports cleaner energy.