Posted by Christopher Kelly
The transition of power between our previous and current presidential administration was, in that great national tradition, peaceful. Yet, major differences in policy are roiling many parts of our economy and regulatory environment.
Much has changed already, and certainly, more will change at the federal level that will cascade to nearly every industry. Among the largest changes is around environmental policy, an area of acute interest to the energy and infrastructure industries we serve here at Clearion.
The major headline of last week was the US decision to withdraw from the 2016 UN climate framework. So it seems that despite the smooth assurance of Humphry Bogart in Casablanca, maybe we won’t always have Paris. But, because Paris did not bind the US to any specific targets for emission reduction, and because the Trump administration could just as easily change targets (or simply decide to disregard targets altogether), it’s likely that withdrawing from the Convention was little more than a symbolic statement.
In other words, it’s quite possible that this decision will have little practical effect on the posture and actions of government agencies and private corporations that own and operate our energy networks and infrastructure. Within hours of the administration announcement and in the days since, countless leaders from government and industry said they would maintain their commitments to sustainability goals.
One way to view this is as a statement of protest against the decision to withdraw, but another plausible explanation is that these organizations are guided by forces already set in motion and unaffected by this month’s change in federal policy.
The first force is the market momentum created by investments over the past 5–10 years in renewable and “cleaner” technologies, as we saw in electricity generation. The production boom in domestic natural gas eased the decision by many utilities to move away from coal in favor of gas generation. Subsidies and other incentives accelerated the development of wind and solar generation, creating sufficient scale to bring down the input costs to build these facilities.
Second, organizations have issued policies and built strategies around a vision for the future that embraced sustainability—and their commitment is unlikely to waver.
Third, there is widespread public support for sustainability initiatives, despite our official national position on the Paris Agreement. This public makes up a large swath of the constituents and customers of the very organizations that are making decisions that have a real impact on emissions and other sustainability targets.
So momentum in the market at large and within individual organizations, combined with the gravitational pull of the preferences of an increasingly vocal and demanding public are the forces that will guide energy and infrastructure industries through the course of this and likely future administrations.
In support of this point, the CEO of American Electric Power (AEP) this week said coal will continue to decline within the mix of generation sources in the US. He predicted we would reach 25%, which is down from a peak of nearly 60%. Closer to home for Clearion, one of our large utility customers commented that federal defunding of the EPA will not streamline construction projects. Instead, understaffing at the federal regulatory level will push more of the approval and enforcement burden onto smaller state agencies whose regulations remain intact despite changes at the federal level.
So, don’t expect to see a pull-back by boards or CEOs from the sustainability trends enacted over the past several years. In fact, it’s possible that the public will turn their focus more to utilities and other infrastructure organizations as avenues to achieve sustainability goals because they cannot rely on government policy to enforce their preferences.
Today and always, Clearion will continue to support our customers with solutions that advance their sustainability objectives. We are committed to deepening our work on right-of-way sustainability, advancing our herbicide tracking solutions both for manual backpack crews and for systems with sophisticated sensor technology to better manage environmental compliance, and connecting our customers with aligned organizations.
Working together for the common good isn’t federally mandated; it’s simply the right thing to do.