By Eric Berman, Co-Chair, Element 8
The November Element 8 member meeting featured a panel discussion with Element 8 advisory board members Ross Macfarlane, Kirk Washington, Kiki Tidwell and Ned Harvey. Susan Preston, board member and Element 8 Fund manager, moderated the panel. Coming only nine days after the election, it was no surprise that the panel focused on potential policy changes and how such policies would affect the clean-tech industry in the coming years.
Ross Macfarlane, a former senior advisor at Climate Solutions, started off by painting a bleak picture, noting that the incoming administration considers climate change a ‘hoax,’ has called clean energy a ‘joke,’ and has appointed Myron Ebell, who has long lobbied against environmental regulations, to lead the EPA transition.
Yet, counter to much of the dialogue surrounding clean energy and the environment in the immediate aftermath of the election, panelists largely shared a more positive view of what the future might hold for the industry. Kirk Washington of Washington Associates noted that market forces and technology are driving emissions reductions regardless of policy: coal use is down from 55% to around 30%, and he says the country’s natural gas revolution is driving down emissions from power generation and increasing U.S. energy independence. Kaufman Fellow Kiki Tidwell, meanwhile, whose own state of Idaho has had a governor who was as skeptical of clean energy as the incoming president, noted that jobs are a universal persuader. “Follow the money,” she said. “When people see that there is money to be made and that it’s mainstream Wall-street finance, it’s much easier.” Ned Harvey, managing director at Rocky Mountain Institute, looked on the bright side as well, highlighting industry trends that will continue regardless of policy decisions—notably the decarbonization efforts of the shipping and aviation industries.
There is also a reason to be optimistic with regards to policy itself. The consensus among the advisory council was that the two main tax credits affecting wind and solar (the Investment Tax Credit (ITC) and the Production Tax Credit (PTC)), which were extended last year with bipartisan support and have a multi-year phase-out, are likely to stay in place, providing market certainty. Panelists also pointed out that utilities like the idea of a long-term fuel—something that they can rely on when locking in a power purchase agreement (PPA). Coal is not currently a popular choice as a long-term fuel. Renewables, in contrast, are valued as clean and affordable resources that provide a long-term hedge against fuel price volatility.
Given all of the change at the federal level, the conversation naturally turned to the state and local level. Macfarlane saw significant opportunities at the state level, but also highlighted the importance of progress outside of the U.S. by other Paris accord signatories. Washington, however, took a different view, observing that the diversity of state policies are an obstacle for small companies with fewer resources to navigate them. The panel also offered some thoughts about why Washington state’s first-in-the-nation carbon tax ballot initiative (I-732) failed to pass, suggesting that there is still strong support for taking action, but that people need to know that the revenue will be used wisely for things like community resilience and towards mitigating climate change.
In conclusion, while the absence of federal energy policy certainly is not desirable, panelists took comfort in the expectation that market forces, and corporate and local government commitments, will propel clean tech through this administration. The future of clean tech still looks bright, and we here at Element 8 look forward to continuing to contribute our piece to support it—federal policy or no.