BY LOWELL G. MILLER
The Environmental Protection Agency”™s upcoming carbon pollution standards provide an opportunity for New York to accelerate its investments in a clean energy future and combat climate change. We must continue to support common-sense legislation and standards that can help us innovate and grow the clean energy sector.
In March, an unusual thing happened in Washington, D.C. A member of Congress stood strong in the face of political pressure and defended good public policy. In casting a vote against a bill to curb the EPA”™s ability to set carbon emission limits for power plants, Republican Congressman Chris Gibson did what was right for New York. Despite Gibson”™s vote, the bill passed the House, but it is unlikely to pass the Democratic-controlled Senate.
In early June, EPA officials will release standards that will set limits on the amount of carbon dioxide that existing power plants ”“ the largest source of greenhouse gas pollution in the U.S. ”“ can produce. The standards will be the first national comprehensive effort to combat one of the key causes of climate change.
Climate change creates additional risk for investors. This risk comes from extreme weather events like Superstorm Sandy and the sea level rise that threatens parts of New York City, but it also comes from challenges like disruption to corporate supply chains. For example, during Sandy, businesses lost $246 million due to lost revenue and increased operating costs. Carbon pollution standards help to reduce these risks on a comprehensive basis by facilitating our nation”™s transition to a cleaner-energy economy.
At Miller/Howard Investments, we strive to help our clients achieve their financial goals by investing in high-quality companies. We hold our socially screened portfolios, which include our investments in global utilities and infrastructure, to a high standard for performance on financial, environmental, social and governance metrics not just because it”™s the right thing to do, but also because it”™s an investment strategy that adds an extra layer of due diligence.
That”™s why we support carbon pollution standards, and we”™re not alone in this belief. When the EPA announced its proposed standard for new power plants in October, we joined nearly 50 other investors who collectively manage over $900 billion in assets to commend them for their action and encourage them to also set a standard for existing power plants soon.
Some cast these standards as “job killers,” but we have a different experience here in New York. A recent study by the state Department of Labor found more than 180,000 people are employed in green jobs statewide. Moreover, this sector has added more than 60,000 jobs between 2003 and 2010 ”“ about 50 percent growth. Proposals like the carbon pollution standards are exactly the type of policies we need to continue to spur innovation and investment in clean energy.
New York also has experience participating in the Regional Greenhouse Gas Initiative, a market-based program aimed at reducing greenhouse gas emissions across the Northeast and Mid-Atlantic. States involved in the initiative have seen nearly $2 billion in lifetime energy bill savings accruing to households and businesses in the region while reducing carbon emissions by 8 million short tons ”“ the same as taking 1.4 million cars off the road.
Businesses, too, are calling for action on climate. Large and small businesses from across the country have signed the Climate Declaration, including New York-based Fortune 500 companies like Avon Products and CA Technologies as well as smaller businesses like Catamount Ski Area in Hillsdale and JSA Financial Group in Rhinebeck ”“ both in Gibson”™s district. As the declaration states, these companies believe “tackling climate change is one of America”™s greatest economic opportunities of the 21st century.”
The carbon pollution standards provide us an opportunity to help reduce investor risk, grow our state”™s economy and address climate change. I hope you”™ll do what you can ”“ including contacting your legislators as well as the EPA ”“ to support this important step toward a cleaner-energy future.
Lowell G. Miller is founder and chief investment officer of Miller/Howard Investments Inc. in Woodstock. For more information, email esg@mhinvest.com.
