Environmental Finance

Bunge, the agri-business ‘giant’, recently acquired Climate Change Capital…leading to a change in focus toward ‘impact investing’.

I always end up confused…particularly when they talk of CCC holding $1.4 B in ‘committments’. I know what they mean by committments, but I do not know (and they do not explain) how that translates to Company balance sheet.

Big numbers…impact investing….does this make sense?

The Article

A Report on the Regional Greenhouse Gas Initiative (RGGI)

A new report is touting the Regional Greenhouse Gas Initiative (RGGI) for helping cut carbon dioxide emissions in the Northeast. The news is somewhat hazy for Rhode Island, however, and overall the data show that the cap-and-trade program is still a work in progress.

Environment Northeast (ENE), a nonprofit that tracks the 10-state, carbon-cutting RGGI program, said emissions from power plants are down 11 percent from last year, and are well below a cap set in 2009. The reason, ENE stated, is power plants are burning more natural gas and less high carbon-packed fuels such as coal and oil. Renewable energy, mild weather and improvements in energy efficiency also are being credited for helping reduce greenhouse-gas emissions.

All good things for cutting carbon pollution, but much of the progress appears to derive from a single factor: the price of natural gas. Since 2005, natural gas prices have dropped significantly below coal and oil. As of Dec. 31, gas was about four times cheaper than oil.
The Article

Cap and Trade Benefits Connecticut

Connecticut’s commitment to the regional cap-and-trade system and subsequent investment in energy efficiency bolsters the economy, even as power plants shell out cash for their air pollution.

In the first three years of the 10-state Regional Greenhouse Gas Initiative, Connecticut’s state government received $51.7 million of the $913.3 million awarded throughout the region. Connecticut invested 73 percent in energy efficiency initiatives; 23 percent in renewable energy projects; 5 percent on offsetting air pollution; and 1 percent on clean energy education for teachers and students.

Because of energy efficiency, the impact on Connecticut’s economy outpaced the average of the 10 states in the regional initiative, according to an economic impact study of the Northeast’s cap-and-trade system, performed by the Boston-based Analysis Group.

The Article

Our Environmental Finance Information Meter is Struggling

I have noticed that since we restarted our EcoAsset Weblog in May of this year that the amount of meaningful new information on environmental finance seems very thin in comparison to 2008-2009. (Note to self…we also could just have our head in the sand)

It struck me over the weekend that we are much less likely to publish information/article/etc. on environmental finance in 2011 than in 2009. I think several things are going on:

1) The U. S. economy is in difficulty, and this obviously impacts ecofinance.
2) Ecosystem service market efforts, particularly public initiatives, are having a difficult time.
3) Many of the private deals and corporate planning for environmental impacts on business models do not see much media…so it is hard to guess the activity level.
4) A significant amount of political opposition to well established environmental knowledge and action.
5) The our concentration of wealth leaves only the ‘big deals’ possible. The small ‘support needed from the middle class public’ deals flounder because so is the middle class floundering.

What to expect?

Governmentally, don’t expect much…I notice a lot of reorganization at USDA NRCS…hopefully we just manage to ‘keep our thumb in the dike of natural disaster recovery’.

In terms of private and corporate wealth, there is a ton of capital on the sidelines…and a good bit of it is real (look at the cash in lots of corporate balance sheets…corporations with stable durable product/service and capable management). Google becomes more and more an ‘environmental’ company…so will many others…they will find it a logical decision of creating a durable company.