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Colorado: Support a Just and Equitable Transition via Securitization

By Julia Prochnik - Natural Resources Defense Council, April 24, 2019

Utility securitization can be a prescription for lowering energy costs and reallocating funds previously committed to expensive fuels and reinvesting them in lower cost clean energy infrastructure. Securitization is also a useful financing tool to help fund a Just and Equitable Transition to clean energy infrastructure.

Securitization is a financing tool that has existed in the financial sector for decades and is a special type of utility bond offering that gets funds from private investors at a very low interest rate. It can be used to replace more expensive capital and costs that utilities pass on to customers.  Securitization provides a lower cost to customers. 

Legislation is needed, in Colorado and elsewhere, to guarantee a regulated dedicated rate and an unavoidable charge with Public Utility Commission oversight to ensure that the bonds are paid in full.  This dedicated rate along with other conditions allow for high credit score on the bonds to get the lowest interest rate from investors and therefore the lowest costs for customers. 

For example, when a utility says they need to securitize something, they are looking into refinancing their costs of raising capital at a secured lower bond rate, just as you would with decreasing interest charged on a credit card. The regulated utility can then repurpose the money raised into a variety of cleaner operations and transition funds. 

A Just and Equitable Transition builds from the indigenous and labor movement to create a just transition.  Adding equity expands the policymaking to include diverse community voices and help make change livable for all impacted.  

A Roadmap to an Equitable Low-Carbon Future: Four Pillars for a Just Transition

By J. Mijin Cha, JD, PhD - Climate Equity Network, April 2019

The signs that the climate crisis is already happening are clear. The most recent Intergovernmental Panel on Climate Change report detailed the evidence from more than 6,000 studies that found that over the past decade, a series of record-breaking storms, forest fires, droughts, coral bleaching, heat waves, and floods have taken place around the world in response to the 1.0 °C of global warming that has taken place since the pre-industrial era. These events, and the losses associated with them, are expected to become substantially worse with 1.5 °C of warming currently targeted by global climate agreements, and far worse if these agreements are not effective. Without major cuts in greenhouse gas (GHG) emissions, this warming threshold could be reached in as little as 11 years, and almost certainly within 20 years. Even if such cuts were to begin immediately, reaching this threshold would not be prevented, only delayed.

Any chance of staving off even worst impacts from climate change depends on significant reductions in GHG emissions and a move from a fossil fuel- based economy to a low-carbon economic future. While this transition is fundamentally necessary, the challenges it poses are great. Every aspect of our economy and our society is dependent upon fossil fuel use – from the reliance on electricity provided by fossil fuel power plants to the tax revenue local communities receive from fossil fuel extraction and facilities to the jobs held by those working in an industry that may keep their incomes high but often puts their communities at risk. The imprint of fossil fuels is so deeply embedded within our way of life that ceasing its use will require a fundamental shift in how we procure and use energy.

The good news is that this shift is possible—and California is already on a path to a low-carbon future. In addition to several ambitious climate targets, in September 2018, then-Governor Jerry Brown signed an executive order pledging the state to achieve carbon neutrality no later than 2045. As the world’s fifth largest economy, the commitment California made to reduce greenhouse gases can provide a pathway to a low-carbon future that could lay the groundwork for others to follow. But to get there, we need to aim even higher than California’s already ambitious goals.

Transitioning away from fossil fuels must be done more quickly and also in a manner that protects workers and communities economically dependent on the fossil fuel industry. Transitioning is also an opportunity to include those who have historically been excluded from the jobs and economic benefits of the extractive economy and expand the populations who have access to future jobs and economic opportunities. As we move to a low-carbon future, environmental justice communities should be prioritized for job creation and renewable energy generation. Without protecting displaced workers and expanding opportunities to other workers, transitioning to a low-carbon future will replicate the mistakes and inequalities of the extractive past and present.

Read the report (PDF).

Steel Arising

By Julian M Allwood, Cyrille F Dunant, Richard C Lupton, and André C H Serrenho - University of Cambridge, April 2019

The global steel industry is transforming from using iron ore to recycling scrap. Global arisings of steel scrap are likely to treble in the next thirty years and we will never need more blast furnaces than we have today. The extent and speed of this global transformation depends on two competing forces: on the one hand, today’s recycling technology cannot currently produce the highest qualities of high-volume steel econonically; on the other, recycling has the critical advantage that it reduces the greenhouse gas emissions released in producing steel to around a third of those from primary production. As the steel industry turns from ore to scrap and action on climate change accelerates, what opportunities does this create for steel in the UK?

UK consumers currently demand around 15 million tonnes per year of steel in final goods. Although the UK’s steel production has fallen to well below this figure, it manufactures goods containing around the same annual total. However, the UK largely exports its steel products and manufactured steel goods at low value, while importing most high-value final goods containing steel. Only one sixth of UK final consumption of steel goods is currently made with steel produced in the UK, and that is mainly lower value components for construction.

Despite this weak current position, the UK has four comparative advantages by which it could profit in the ongoing global transformation of steel production.

Read the report (Link).

A Green Growth Program for Colorado: Climate Stabilization, Good Jobs, and Just Transition

By Robert Pollin, Jeannette Wicks-Lim, Shouvik Chakraborty, and Tyler Hansen - Department of Economics and Political Economy Research Institute (PERI), April 2019

This study examines the prospects for a transformative green growth program for Colorado. The centerpiece of the program is clean energy investments—i.e. investments to raise energy efficiency levels and expand the supply of clean renewable energy sources. These investments should be undertaken in combination by the public and private sectors throughout the state. This program can advance two fundamental goals: 1) promoting global climate stabilization by reducing carbon dioxide (CO2) emissions in Colorado without increasing emissions outside of the state; and 2) expanding good job opportunities throughout the state while the state’s economy continues to grow. The program is specifically designed to reduce Colorado’s CO2 emissions by 50 percent as of 2030 and by 90 percent as of 2050 relative to the state’s 2005 emissions level while the economy grows at an average annual rate of 2.4 percent. The consumption of oil, natural gas and coal to generate energy will need to fall sharply in Colorado, since CO2 emissions result through the combustion of fossil fuels.

We estimate that total investments in energy efficiency and renewable energy will need to average about $14.5 billion per year between 2021 – 2030, equal to about 3.5 percent of Colorado’s average annual GDP over those years. These investments will generate about 100,000 jobs per year in the state. New job opportunities will be created in a wide range of areas, including construction, sales, management, production, engineering and office support. At the same time, the contraction of the state’s fossil fuel related industries will generate about 700 job losses per year, of which about 600 will be non-managerial jobs. We develop a Just Transition program for workers impacted by the contraction of the state’s fossil fuel industries. The program includes: pension guarantees for retired workers who are covered by employer-financed pensions; retraining to assist displaced workers to obtain the skills needed for a new job and 100 percent wage replacement while training; re-employment for displaced workers through an employment guarantee, with 100 percent wage insurance; and relocation support as needed. We also propose a broader set of policies to meet the state’s emissions reduction goals. These include a carbon tax; strengthening the state’s existing energy efficiency and renewable portfolio standards; strengthening existing procurement programs for clean energy public investments; increasing financial subsidies for clean energy investments; expanding the state’s worker training programs for clean energy employment opportunities; and channeling a disproportionate share of new clean energy investments into communities that will be significantly impacted by the contraction of the state’s fossil fuel related industries.

Read the text (PDF).

Trading Up Equipping Ontario Trades With the Skills of the Future

By staff - Canada Green Building Council, April 2019

Equipping Canada’s labour force with the skills required for designing, constructing and maintaining low-carbon building infrastructure is critical to achieving a greener economy and to reducing Canada’s emissions by 30% below 2005 levels by 2030. We are pleased to support Canada’s green building industry with a new report, Trading Up: Equipping Ontario Trades with the Skills of the Future, aimed at facilitating a low carbon workforce transition.

This report provides an action plan to close the low-carbon building skills gap in the Ontario construction industry. Green infrastructure investments are expected to create an estimated 147,000 job openings for skilled tradespeople over the next 15 years in the Toronto region alone. The inability to close the skills gap in Ontario is estimated to have an impact of $24.3 billion of Gross Domestic Product (GDP) in foregone company revenues, with an additional $3.7 billion lost in foregone taxation.

The report identifies where shortages in low-carbon skills training currently exist, and highlights the risks to the quality of low-carbon buildings being constructed. It defines specific actions that labour, governments, post-secondary institutions and industry organizations can take to optimize green building skills training.

The “Trading Up” report was compiled by CaGBC with Mohawk College, McCallumSather, The Cora Group, the City of Toronto and the Ontario Building Officials Association (OBOA). The project was funded, in part, by the Government of Ontario. While the report examines the Ontario construction industry, its recommendations can be applied throughout Canada.

Read the text (PDF).

An Ecosocialist Green New Deal: Guiding Principles

By the DSA Ecosocialist Working Group - Democratic Socialists of America - February 28, 2019

The IWW has not endorsed this document; however, individual members of the IWW EUC have helped shape it.

Humankind has reached a moment of existential crisis. Human activity is causing disastrous climate disruption and Earth’s sixth mass extinction event, triggering critical losses of biodiversity. We are already locked in for global warming that will have catastrophic effects, and we are on a slippery path to our own extinction. The 2018 Special Report from the Intergovernmental Panel on Climate Change (IPCC) warns unequivocally that “without societal transformation and rapid implementation of ambitious greenhouse gas reduction measures, pathways to limiting warming to 1.5°C and achieving sustainable development will be exceedingly difficult, if not impossible, to achieve.”

Yet, the crisis we face exceeds ecological breakdown. Deepening inequality, suppressed democracy, precarious jobs, racial and gendered violence, border hostility, and endless wars make up the terrain on which climate destabilization will be unleashed. The most vulnerable members of society will be hit hardest, first, and suffer most.

We must solve the climate crisis and the inequality crisis together. Climate remedies in the context of austerity will produce a popular backlash, as we see in the yellow vest protests against a fuel tax. Corporations profiting from fossil extraction have long worked to turn workers against environmentalists, claiming that clean energy would be a job killer. But working class and poor people’s quality of life, gravely threatened by climate disruption, would greatly improve in a just transition. Because corporate capitalism rewards extraction to concentrate wealth, it must be replaced by a sustainable economy. A Green New Deal can begin the transition from exploitative capitalism to democratic ecological socialism.

The urgency and scale of the crisis we face demand solutions that meet the magnitude of this moment. The ineffectual gradualism and corporate obedience demonstrated by the U.S. government’s climate response has proven to be a dead-end for humanity. We need rapid, systemic transformation that heals the stratification of wealth and power while putting decarbonization and justice at the forefront.

We need a Green New Deal. We demand a Green New Deal, and we demand that it serve people and planet—not profit.

Read the report (PDF).

Towards a just transition: coal, cars and the world of work

By Béla Galgóczi - European Trade Union Institute, 2019

The role of trade unions and social dialogue is key in demonstrating the major differences between coal-based energy generation and the automobile industry. This book presents two faces of a just transition towards a net-zero carbon economy by drawing lessons from these two carbon-intensive sectors. The authors regard just transition not as an abstract concept, but as a real practice in real workplaces. While decarbonisation itself is a common objective, particular transitions take place in work environments that are themselves determined by the state of the capital-labour relationship, with inherent conflicts of interest, during the transition process.

The case studies presented in this book highlight the major differences between these two sectors in the nature and magnitude of the challenge, how transition practices are applied and what role the actors play.

Read the report (Link).

A New Horizon: Innovative Reclamation for a Just Transition

By various - Reclaiming Appalachia Coalition, 2019

The certainty of an Appalachian transition has become self-evident. The questions that remain are “What shape will that transition take?” and “Will our region seize the opportunity to establish just and sustainable economic models that invest in our strengths and set the region up for meaningful and healthy participation in the new economy?” Foundational to our coalition’s work is the understanding that specific, targeted intervention is necessary to ensure that an equitable vision becomes reality.

Appalachia is at the threshold of a paradigm shift into the new economy, ushered in by communities that are taking their futures into their own hands like never before and implementing innovative ways to address long-standing economic issues with degraded lands. The table on page 6 shows funded projects illustrating this shift that have been supported by our coalition, ranging from ecotourism, renewable energy, arts and culture, and creative waste recycling.

This report highlights the successes achieved in 2019 from previously submitted projects and showcases a brand new round of innovative projects. We’re very excited about both the successes that have already been funded and implemented, as well as the new opportunities that are currently being considered for Abandoned Mine Lands (AML) Pilot funding.

Read the report (Link).

Equitable Building Electrification: A Framework for Powering Resilient Communities

By Carmelita Miller, Stephanie Chen, Lisa Hu, and Isaac Sevier - Greenlining Institute, 2019

Building electrification is gaining traction as California’s most affordable and effective tool to reduce greenhouse gas emissions from homes and buildings—responsible for roughly a quarter of the state’s emissions—while improving air quality and helping the state meet its climate goals, including a net-zero carbon economy and 100 percent clean electricity by 2045.

While building electrification has promising benefits for residents and for the state, it must be pursued equitably— ensuring that environmental and social justice communities can benefit, rather than being left with polluting and increasingly expensive gas appliances. It will require intentional policymaking and a planned transition for environmental and social justice communities to gain access to the major benefits of electrification, including cleaner air, healthier homes, good jobs and empowered workers, and greater access to affordable clean energy and energy efficiency to reduce monthly energy bills.

This Equitable Building Electrification Framework explains the steps the state must take to ensure that electrification helps close the clean energy gap in California and provides relief to millions of residents facing energy insecurity in the current system.

Read the report (PDF).

A Vision for a Sustainable Battery Value Chain in 2030: Unlocking the Full Potential to Power Sustainable Development and Climate Change Mitigation

By staff - World Economic Forum, 2019

The need for urgent and more intensive actions against climate change is broadly recognized. In support of this agenda, this report presents a simple yet profound vision: a circular, responsible and just battery value chain is one of the major near- term drivers to realize the 2°C Paris Agreement goal in the transport and power sectors, setting course towards achieving the 1.5°C goal if complemented with other technologies and collaborative efforts.

With the right conditions in place, batteries are a systemic enabler of a major shift to bring transportation and power to greenhouse gas neutrality by coupling both sectors for the first time in history and transforming renewable energy from an alternative source to a reliable base. According to this report, batteries could enable 30% of the required reductions in carbon emissions in the transport and power sectors, provide access to electricity to 600 million people who currently have no access, and create 10 million safe and sustainable jobs around the world.

This report provides a quantified foundation for a vision about how batteries can contribute to sustainable development and climate change mitigation over the coming decade. The analysis underscores that this opportunity can only be achieved sustainably through a systemic approach across social, environmental and economic dimensions. It outlines key conditions and presents recommendations to realize this potential.

Read the report (Link).

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