Invest in the Future...Invest in Renewable Energy!
Invest in the Future...Invest in Renewable Energy!
From rising sea levels to shrinking icebergs, increasing temperatures to receding shorelines, the topic of global climate change is constantly buzzing. NASA states that, “Ninety-seven percent of climate scientists agree that climate-warming trends over the past century are very likely due to human activities, and most of the leading scientific organizations worldwide have issued public statements endorsing this position.” NASA also acknowledges that, “Most of the warming occurred in the past 35 years, with 15 of the 16 warmest years on record occurring since 2001.”
Aside from preserving the earth for our children and our children’s children, there are also significant economic reasons to focus on renewable energy. For the purposes of this article, it should be noted that renewable energy excludes nuclear. Instead, the topic of renewables, also known as clean technology, includes sources such as wind, solar, and hydropower. In other words, our focus is on sources that are found in nature and can be used again.
Chambers of commerce are the perfect advocate to initiate this shift. One such chamber who has started this forward thinking is the Austin Chamber of Commerce in Texas. Callie Turley, Economic Development Director for Cleantech, a division of the chamber, states that, “ ... I think it’s important to have a focus on renewable energy in a chamber.” Turley elaborates that, “actually the Austin area has a pretty large clean tech community. … Business and civic leaders … have been trying to promote cleantech in the region for about 25 years now.” In fact, there are several economic benefits at every level already in place. We’ll take a look at climate change on a federal, state, and local level, how the Austin Chamber addresses these concerns, and how your chamber can do the same.
Starting from the top, we’re in the midst of a national initiative to spearhead climate change. According to an article published in December by the Office of Energy Efficiency and Renewable Energy, “The U.S. Department of Energy (DOE) ... announced $3 million in funding for three projects to speed the adoption of energy efficiency and renewable energy technologies at facilities across the federal government.” This impact is significant because “in practice, government policies will determine where we go from here,” as the International Energy Agency’s (IEA) executive director, Dr. Fatih Birol, states in a November issue.
Through this funding program, the Department of Agriculture (U.S. Forest Service), General Service Administration (Public Building Service), and Department of Defense (U.S. Air Force) will each receive $1 million dollars “so agencies can achieve 30 percent of their electricity from renewable energy sources by 2025.” The Office of Energy Efficiency & Renewable Energy states that, “As the nation’s largest single user of energy, the federal government is leading by example.”
This funding is among a trending effort in the past several years. In fact, the Institute for Energy Research states, “from fiscal year 2010 through fiscal year 2013 … The largest increases in federal energy subsidies were in electricity-related renewable energy, which increased 54 percent.” During the same time period, “Total fossil fuel subsidies declined by 15 percent.” Federal focus on renewable energy is continuing to expand while fossil fuel investment diminishes. Further, we’re certainly not the only nation making the transition; there’s currently a global trend to reduce investment in coal energy sources. As illustrated in a Bloomberg article, “Coal phases out in wealthier countries first.” For example, “the world's first coal superpower, the U.K., now produces less power from coal than it has since at least 1850.”
Investing in renewable energy versus fossil fuels will have major economic benefits in terms of healthcare. According to the National Wildlife Federation, “Coal-fired power plants are the single largest source of mercury contamination in the U.S.” In terms of what that means for human health, there’s a long list of ill effects. Most notably, however, are the severely negative effects on cognitive development. As cited in an article from the U.S. National Library of Medicine National Institutes of Health, “The resulting loss of intelligence causes diminished economic productivity that persists over the entire lifetime … ” The economic damage “ amounts to $8.7 billion annually.”
This is because “health effects linked to prenatal and childhood methylmercury exposure include problems with language, memory, attention, visual skills, and lower IQs” as stated in the National Wildlife Federation’s article pertaining to Mercury Pollution from Coal-fired Power Plants.
Additionally, the U.S. Energy Information Administration describes renewable energy as, “Unlike fossil fuels, which are finite, renewable energy sources regenerate.” As a result, not only do the costs of producing, maintaining, and replenishing renewable energy sources weigh significantly less in comparison to fossil fuels, the energy is also replenishable, and thus, more sustainable.
The transition from fossil fuels to renewable energy is not shocking from an economic standpoint. As highlighted in a Bloomberg article published in August of 2015, “The cost of producing electricity from renewable sources such as solar and wind has dropped significantly over the past five years, narrowing the gap with power generated from fossil fuels and nuclear reactors, according to the International Energy Agency.” Additionally, energyinnovation.org states that, “solar and wind installations are now competitive with conventional coal- and gas-fired power plants.”
Lowered costs for renewable energy create an easier transition for state level governments to offer their own types of incentives. While every state will have unique economic programs for businesses to participate in, let’s focus on Texas. Turley states that, “Well, for Texas and Austin, there are several.”
According to the State Energy Conservation Office, “ ... the state does not have a tax exemption program at this time that provides funding of renewable energy equipment on an individual basis, [however] there are a few allowable tax exemptions and deductions.” For example, the Solar and Wind-Powered Energy Devices Property Tax Exemption “ … allows residents to take an exemption from taxation of the amount of the appraised value of the property that arises from the installation or construction of a solar or wind-powered energy device.” This is important for businesses of any size when considering solar or wind. They can invest in renewables without being taxed for the additional property.
Similarly, the Solar Energy Devices Franchise Tax Deduction “allows a corporation to deduct the cost of a solar energy device from the franchise tax in one of two ways: (1) the total cost of the system may be deducted from the company's taxable capital; or, (2) 10% of the system's cost may be deducted from the company's income.”
Additionally, Texas offers the Solar Energy Devices Business Franchise Tax Exemption. A company is eligible to apply for this incentive if it is “an entity that is solely engaged in the business of manufacturing, selling, or installing qualifying solar (wind) energy devices … ” This encourages businesses in the industry to relocate to Texas because they are automatically tax exempt.
These statewide incentives provided by Texas encourage businesses to come to their area and also invest in renewable energy sources for their company. Turley states that in addition to these incentives, Austin has a variety of services to help both big and startup renewable companies. “The Austin Technology Incubator, which is out of the University of Texas … is where startups can go to grow and they help walk them through the funding stages and then they graduate and send them on their way.” There’s also an innovation team through their five chamber Opportunity Austin team “ ... to show them what the innovation scene … in Austin is like to keep them investing in [their] local startups.” Additionally, renewable energy is a great field for job creation. As it’s a technology driven industry, there’s always new technology and opportunity for fresh ideas. According to the International Renewable Energy Agency’s Annual Review of Renewable Energy and Jobs, “global renewable energy employment increased by 5% in 2015 to reach 8.1 million.” The review also states that, “the total number of jobs in renewables worldwide continued to rise, in stark contrast with depressed labour markets in the broader energy sector.” The United States was even listed among the top job producing nations in the world.
And, last but not least, your local level has the power to initiate the shift from fossil fuels to renewable energy. Your local community and chamber of commerce are powerful vehicles to inspire change. The reason why such a focus on renewables was initiated in Austin was, in fact, because “There was an interest there from both the business community and the utility [company] as well as the city in renewables. And there was a decision to push that,” Turley explains.
While the sheer size of Austin’s chamber isn’t a factor to be overlooked, Turley states that smaller chambers also have the momentum and resources to spark change, “Because if you talk to your industry base and find out what’s important for them … then the chamber could really focus on trying to help them get that relationship started.”
One of the key factors for Austin was using the resources at their local university. Turley states that local startup businesses often seek the Austin Technology Incubator. Within this sector “ … there’s a part of ATI that is actually CEI … the Clean Energy Incubator … [that help] grow through their startup phase and get going.” Through their “team of full-time professionals … students and faculty at UT-Austin … [and] network of mentors, advisors, and investors … ATI focuses on helping startups compete successfully in the capital markets.”
Another facet of Austin’s success is the support of their surrounding chambers. This network of support is especially advantageous for smaller communities. “Opportunity Austin is a regional economic development initiative aimed at fostering job-creating investment in Central Texas' five-county region.” For example, Georgetown is a , “ … community to the north of [them] and they are 100% renewable.” Austin can always refer to a community who has demonstrated success in implementing these shared goals. Turley also states that, “Being able to work with … all of the different communities and having such a strong bond with them is really important.”
Austin Energy is the community’s utility company and also shares common sustainability goals. Serving as “the nation’s 8th largest publicly owned electric utility … Austin Energy’s commitment to renewable power began in the 1990s, when [they] blazed a trail by purchasing power from the state’s first commercial wind plant. Since then, [they] have continued to responsibly build [their] renewable portfolio, with plans to continue well into the future.”
Many chambers of commerce also have an advocacy team that will act as a liaison between the local community and state and local governments. Turley states that their advocacy team, “can help work with them to see what’s important to [the] local business, so that those businesses can then get involved if there’s something that they feel really strongly about and they would like to take a stance, politically, on policy.”
Turley passionately states, “So you’ve got the University, you’ve got the city, you’ve got the Chamber, and you’ve got the energy company, as well as the other local clean energy companies all coming together to try and make this work.” Ultimately, with a common goal, chambers of any size can also collaborate to make a more sustainable future.
So, are you ready to (quite literally) save the world but feeling unsure where to begin?
First, take a deep breath: Rome wasn’t built in a day. You can start with a simple survey. What might work for Austin, Texas may not be the best answer for a community’s needs in rural Pennsylvania. Find out what your local entrepreneurs are interested in. Are there shared goals amongst your business community? If so, it’s your job as the business’ representative to answer their concerns.
And, don’t forget about your Millennials! The term almost seems like a buzz word at this point. But, according to the Pew Research Center in 2015, “Millennials surpass Gen Xers as the largest generation in [the] U.S. labor force.” This data is significant as employers are considering what’s important to the majority of their workers.
Also, known as the Cause Generation, Millennials have a mission to feel like they’ve made a difference. In fact, there’s been so much conversation about this motivation that the Millennial Impact Report was initiated. “The Millennial Impact Project is the most comprehensive and trusted study of the Millennial generation (born 1980-2000) and their involvement with causes.”
The study conducted in 2015 found that a “ … group of employees are most inspired to get actively involved when the company’s program evokes their passion for a cause.” Just like a Millennial will stay loyal to a company if they share similar passions, so, too, will a Millennial be drawn to a community that demonstrates a passion for a cause like sustainability.
It’s the energy of the future: And, it starts now! Considering the economic health impacts, job creation, and significantly lesser costs of renewable energy in comparison to fossil fuels on all levels of government, chambers of commerce across the nation should invest in cleantech. Not only will these investments benefit their local community, but will also have the merit to ignite change further up the governmental food chain, eventually creating a global impact.