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The One Thing Obama’s Climate Policy Can’t Leave Out

| Written by John Farrell | 2 Comments | Updated on Jun 20, 2013 The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/obamas-climate-policy/
Cheering over new solar installation

When President Obama unveils his climate policy proposal in the coming days, he should focus on the one key element of successful climate and energy policy.  It’s not about utilities or incentives or numbers, it’s about ownership.

Climate-protecting energy policy succeeds when communities can keep their energy dollars local by directly owning and profiting from investments in renewable energy.

Look at Denmark, with wind power capacity sufficient for 28% of its electricity use.  When the world’s nations descended on Copenhagen in 2009 for the climate conference, attendees could have gleaned their most important lesson by gazing across the water at the Middelgrunden offshore wind farm – 50% owned by over 10,000 Copenhagen residents.  Local ownership like this was the centerpiece of building over 4,000 megawatts of wind power in Denmark, increasing energy independence by letting ordinary citizens collectively own wind farms that brought money right back into their community.  Ownership let Danes focus on their own energy independence and economy.  Concern for the climate was secondary.

Andrew Cumbers of the UN Research Institute for Social Development explains the ongoing strength of the Danish commitment to renewable energy:

The participation of communities in the ownership and development of the technology has been a critical factor in the successful growth of renewable energy capacity.  Surveys suggest around 70 per cent of the population are in favour of wind farms with only around 5 per cent against (Soerensen et al 2003), figures that are far higher than found elsewhere. (emphasis added)

Germany’s roaring success reinforces why ownership should be President Obama’s highest priority.  Over 60% of mid-day electricity demand was met with wind and solar on a recent sunny day, and almost 25% of annual German electricity usage comes from renewable sources.  Once again, it’s a people-powered transition (or as the Germans like to call it, Energiewende, or “energy change”).

Nearly half of all German renewable energy capacity is owned by individuals, not utilities.  These small, quickly built distributed energy projects multiplied quickly under simply policies that made it easy for Germans to own a share in their energy future.

Despite numerous attempts by various political factions to curtail the renewable energy transition (most frequently citing high costs), Germans remain stolidly committed to growing renewable energy, with over 60% willing to pay more to continue its expansion.  A survey of Germans towns suggest that ownership, more than anything else, has built this steadfast political support for a low carbon energy future.

Evidence that ownership holds the key to political success lies closer to home, as well.  After a near-death experience at the polls, Ontario’s Liberal Party revised their renewable energy program to prioritize new wind and solar projects that sport local ownership and public support.  Most U.S. state renewable portfolio standards include language that requires or prefers qualifying projects to be in state,* to link the economic and environmental outcomes.  These statutes have survived an all-out assault by the corporate-funded conservative lobbying group ALEC.  And one should not ignore the power of having the Atlanta Tea Party testifying alongside solar power advocates against monopoly utility Georgia Power, arguing that more people should be able to generate their own energy.

Ownership is good politics not just because of who wins, but how much they win.  A study from the National Renewable Energy Laboratory shows local ownership dramatically multiplies the economic returns of renewable energy for the host community.

No climate proposal from President Obama will sail past Republican opposition (see: Waxman-Markey), but his greatest chance for a climate legacy lies in empowering Americans to take control – with their votes and their dollars – of their own energy future.

 

Photo credit: Black Rock Solar

*Note: a recent court decision struck down this provision in Michigan, jeopardizing the in-state preference for all states that include this policy.

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About John Farrell

John Farrell directs the Energy Self-Reliant States and Communities program at the Institute for Local Self-Reliance and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. More

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  • 44BART44

    This is so true. Since I’ve first invested in my own solar PV system, I have made the big mistake buying shares of large companies related to the manufacturing of renewable energy like solar and wind. Of course I was wrong thinking my investment was for the good and potentially profitable. I wasn’t helping those companies and I lost a lot of my savings. But then I realized I could buy shares of locally owned enterprises that limit the vote of shareholders to ONE, no matter how many shares that person holds. Also, many of those companies put a cap on the number of shares you can buy. They invest only in renewable energy and allow for private persons to invest in state of the art wind and solar technology. The best of all: being a shareholder allows me to buy their electricity. It’s really a win-win-win situation.

  • David Keller

    Buying locally generated renewable power is so important.

    What is the economic model, however, for maximizing distributed power – i.e., rooftop/parking lot solar? Vs. the desire to create profit centers for investors (local, regional or national/industrial) by increasing centralized power generation that can be sold into the wholesale market?

    What is the economic model for maximizing efficiencies and conservation, to reduce demands in the first place? That route, of course, reduces electricity sales, and reduces income for the utilities, whether publicly owned or investor owned.

    Here in Sonoma County CA, the county government is setting up a Community Choice Aggregation new public power agency (“Sonoma Clean Power Authority”) to go into competition with PG&E. But the protections and oversight for ratepayers are weak. Nuclear and coal will still be part of the portfolios of contracts for the bulk of electricity to be purchased – despite a cheerleading campaign to get cities to sign up and join the authority asap ‘to save the planet’ with renewables. Local investors and insiders are lining up to get contracts to build new solar generation. Creation of this new multibillion dollar public enterprise is still without a publicly available business plan and understanding of finances.

    See some of the issues currently on the table at:
    http://www.pressdemocrat.com/article/20130622/OPINION/130629880/1307/opinion05?Title=GUEST-OPINION-Power-plan-not-so-clean-8212-on-governance

    Governance of community-serving power generation is a critical piece of the picture. We need to be able to get to a better environment soon, but we also need to create and support public institutions based on respect, trust and cooperation. That will take yet more work; the same mindsets that got us into trouble using technologies will not get us out of trouble with new technologies – our human relationships are key.