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Largest Power Company in U.S. Joins ALEC in Plot Against One State's Solar Revolution
By David Pomerantz
The new hot spot for solar energy in the U.S. is North Carolina. The state was second in the nation in solar growth in 2013, behind only California.
In fact, if U.S. states were considered as countries, North Carolina would have been among the top 10 countries in the world for solar growth last year.
All of that solar growth, driven by policies like the state’s renewable energy portfolio law, has been great for the North Carolina economy, generating $1.7 billion in revenue for the state. At the end of 2012, 137 solar companies employed 1,400 people in North Carolina—a number that increased during solar’s record 2013 year.
But while North Carolina’s solar sector shines brighter, a cloud is approaching on the horizon that places all of the benefits of solar power at risk of disappearing: Duke Energy, the state’s monopoly utility and the largest power company in the country, is about to launch a major attack on solar energy.
On Jan. 7, Duke’s president of North Carolina operations, Paul Newton, fired the first shots of the war. Speaking in front of a joint energy committee of the state’s legislature, Newton attacked net metering, one of the key policies to North Carolina’s solar growth.
Net metering allows customers with rooftop solar panels to get credit for any extra electricity that they send back to the grid, like rollover minutes on a cell phone bill.
Newton argued that solar customers aren’t “paying their fair share” to Duke, and that his company would thus be forced to charge higher rates to all of its other customers in response.
Those allegations are false. A study conducted last year showed that the benefits of rooftop solar in North Carolina—even for customers who don’t have the panels—would outweigh any costs by 30 percent. That’s because as more homes and businesses go solar, Duke wouldn’t have to keep building expensive gas and coal plants and raising rates on its customers to finance them. Those rate benefits are aside from the job creation, climate and public health positives of solar power.
But Duke’s shareholders profit by building those gas and coal plants, which is exactly why rooftop solar is in the crosshairs.
Duke’s key ally in its war on solar: ALEC
Duke isn’t the first utility in the country to attack net metering; utilities in California, Arizona and Colorado began similar campaigns in 2013, and others are forming battle plans now.
In December, The Guardian newspaper revealed that these power companies have been coordinating their efforts under the guise of the American Legislative Exchange Council, (ALEC), a group that lets corporations like Duke ghostwrite laws for right-wing state legislators.
Many utilities are ALEC members, and they have made it ALEC’s top priority to attack net metering laws around the country. Forty percent of North Carolina state lawmakers are ALEC members, and Duke will rely on them to do their bidding.
So far, Duke and ALEC’s communications strategy has been to stigmatize solar energy as being only for the wealthy. Their argument is that we shouldn’t be letting rich families with solar panels get even richer on the backs of non-solar households.
It wouldn’t be surprising if early adopters of solar do have higher incomes, since buying the panels involves an upfront cost. But recent research shows that solar penetration is increasingly happening in middle class neighborhoods. In any case, if ALEC and utilities are so worried about the poor, they should be trying to give more solar access to working and middle class communities, since it will help them save money, not take away their chance to go solar by attacking policies like net metering.
The idea that the nation’s power companies, which have raised rates on customers to pad corporate profits and sited coal plants in the nation’s poorest communities for decades, suddenly want to act as champions for social justice doesn’t pass the smell test.
Duke will eventually learn to bask in the sun.
— Duke Energy (@DukeEnergy) January 16, 2014
It’s not the only public display of support for solar power Duke has shown in recent months. Previous CEO Jim Rogers said that he saw rooftop solar as an opportunity as much as a threat, and in March, Duke bought a stake of a distributed solar power financing company, Clean Power Finance.
Were these moves signs that Duke is embracing the solar revolution, or just greenwashing? Both answers may be true: Duke is feeling its way around the edges of solar opportunities while it mostly stalls for time by attacking net metering. One thing that would hasten Duke’s solar transition is if it loses on net metering, since that would force the company to more quickly come to terms with the inevitability of rooftop solar.
A Duke loss on net metering is far from a given, considering Duke and ALEC’s almost unlimited influence in North Carolina politics. But for all of Duke’s money and political power, it can’t change a simple reality: Rooftop solar is immensely popular. A 2013 poll showed that 88 percent of North Carolinians support solar energy. Last year, when ALEC attacked North Carolina’s renewable energy law, the effort failed because Republicans in the legislature recognized solar power as a job creator. In fact, ALEC’s efforts to attack renewable energy laws failed in every state where it tried in 2013.
Now, solar advocates will gear up to bat away the next attack wave in 2014. The sooner they win, the sooner utilities like Duke will have to face the music and realize that they need to join their customers in the sun.
Visit EcoWatch’s RENEWABLES page for more related news on this topic.
EcoWatch Daily Newsletter
By Randi Spivak
Slashing two national monuments in Utah may have received the most attention, but Trump's Interior Department and U.S. Forest Service have been quietly, systematically ceding control of America's public lands to fossil fuel, mining, timber and livestock interests since the day he took office.
A new report by Greenpeace International pinpointed the world's worst sources of sulfur dioxide pollution, an irritant gas that harms human health. India has seized the top spot from Russia and China, contributing nearly 15 percent of global sulfur dioxide emissions.
By Sue Branford and Thais Borges
Ola Elvestrun, Norway's environment minister, announced Thursday that it is freezing its contributions to the Amazon Fund, and will no longer be transferring €300 million ($33.2 million) to Brazil. In a press release, the Norwegian embassy in Brazil stated:
Given the present circumstances, Norway does not have either the legal or the technical basis for making its annual contribution to the Amazon Fund.
Brazilian President Jair Bolsonaro reacted with sarcasm to Norway's decision, which had been widely expected. After an official event, he commented: "Isn't Norway the country that kills whales at the North Pole? Doesn't it also produce oil? It has no basis for telling us what to do. It should give the money to Angela Merkel [the German Chancellor] to reforest Germany."
According to its website, the Amazon Fund is a "REDD+ mechanism created to raise donations for non-reimbursable investments in efforts to prevent, monitor and combat deforestation, as well as to promote the preservation and sustainable use in the Brazilian Amazon." The bulk of funding comes from Norway and Germany.
The annual transfer of funds from developed world donors to the Amazon Fund depends on a report from the Fund's technical committee. This committee meets after the National Institute of Space Research, which gathers official Amazon deforestation data, publishes its annual report with the definitive figures for deforestation in the previous year.
But this year the Amazon Fund's technical committee, along with its steering committee, COFA, were abolished by the Bolsonaro government on 11 April as part of a sweeping move to dissolve some 600 bodies, most of which had NGO involvement. The Bolsonaro government views NGO work in Brazil as a conspiracy to undermine Brazil's sovereignty.
The Brazilian government then demanded far-reaching changes in the way the fund is managed, as documented in a previous article. As a result, the Amazon Fund's technical committee has been unable to meet; Norway says it therefore cannot continue making donations without a favorable report from the committee.
Archer Daniels Midland soy silos in Mato Grosso along the BR-163 highway, where Amazon rainforest has largely been replaced by soy destined for the EU, UK, China and other international markets.
An Uncertain Future
The Amazon Fund was announced during the 2007 United Nations Climate Change Conference in Bali, during a period when environmentalists were alarmed at the rocketing rate of deforestation in the Brazilian Amazon. It was created as a way of encouraging Brazil to continue bringing down the rate of forest conversion to pastures and croplands.
Government agencies, such as IBAMA, Brazil's environmental agency, and NGOs shared Amazon Fund donations. IBAMA used the money primarily to enforce deforestation laws, while the NGOs oversaw projects to support sustainable communities and livelihoods in the Amazon.
There has been some controversy as to whether the Fund has actually achieved its goals: in the three years before the deal, the rate of deforestation fell dramatically but, after money from the Fund started pouring into the Amazon, the rate remained fairly stationary until 2014, when it began to rise once again. But, in general, the international donors have been pleased with the Fund's performance, and until the Bolsonaro government came to office, the program was expected to continue indefinitely.
Norway has been the main donor (94 percent) to the Amazon Fund, followed by Germany (5 percent), and Brazil's state-owned oil company, Petrobrás (1 percent). Over the past 11 years, the Norwegians have made, by far, the biggest contribution: R$3.2 billion ($855 million) out of the total of R$3.4 billion ($903 million).
Up till now the Fund has approved 103 projects, with the dispersal of R$1.8 billion ($478 million). These projects will not be affected by Norway's funding freeze because the donors have already provided the funding and the Brazilian Development Bank is contractually obliged to disburse the money until the end of the projects. But there are another 54 projects, currently being analyzed, whose future is far less secure.
One of the projects left stranded by the dissolution of the Fund's committees is Projeto Frutificar, which should be a three-year project, with a budget of R$29 million ($7.3 million), for the production of açai and cacao by 1,000 small-scale farmers in the states of Amapá and Pará. The project was drawn up by the Brazilian NGO IPAM (Institute of Environmental research in Amazonia).
Paulo Moutinho, an IPAM researcher, told Globo newspaper: "Our program was ready to go when the [Brazilian] government asked for changes in the Fund. It's now stuck in the BNDES. Without funding from Norway, we don't know what will happen to it."
Norway is not the only European nation to be reconsidering the way it funds environmental projects in Brazil. Germany has many environmental projects in the Latin American country, apart from its small contribution to the Amazon Fund, and is deeply concerned about the way the rate of deforestation has been soaring this year.
The German environment ministry told Mongabay that its minister, Svenja Schulze, had decided to put financial support for forest and biodiversity projects in Brazil on hold, with €35 million ($39 million) for various projects now frozen.
The ministry explained why: "The Brazilian government's policy in the Amazon raises doubts whether a consistent reduction in deforestation rates is still being pursued. Only when clarity is restored, can project collaboration be continued."
Bauxite mines in Paragominas, Brazil. The Bolsonaro administration is urging new laws that would allow large-scale mining within Brazil's indigenous reserves.
Hydro / Halvor Molland / Flickr
Alternative Amazon Funding
Although there will certainly be disruption in the short-term as a result of the paralysis in the Amazon Fund, the governors of Brazil's Amazon states, which rely on international funding for their environmental projects, are already scrambling to create alternative channels.
In a press release issued yesterday Helder Barbalho, the governor of Pará, the state with the highest number of projects financed by the Fund, said that he will do all he can to maintain and increase his state partnership with Norway.
Barbalho had announced earlier that his state would be receiving €12.5 million ($11.1 million) to run deforestation monitoring centers in five regions of Pará. Barbalho said: "The state governments' monitoring systems are recording a high level of deforestation in Pará, as in the other Amazon states. The money will be made available to those who want to help [the Pará government reduce deforestation] without this being seen as international intervention."
Amazonas state has funding partnerships with Germany and is negotiating deals with France. "I am talking with countries, mainly European, that are interested in investing in projects in the Amazon," said Amazonas governor Wilson Miranda Lima. "It is important to look at Amazônia, not only from the point of view of conservation, but also — and this is even more important — from the point of view of its citizens. It's impossible to preserve Amazônia if its inhabitants are poor."
Signing of the EU-Mercusor Latin American trading agreement earlier this year. The pact still needs to be ratified.
Council of Hemispheric Affairs
Looming International Difficulties
The Bolsonaro government's perceived reluctance to take effective measures to curb deforestation may in the longer-term lead to a far more serious problem than the paralysis of the Amazon Fund.
In June, the European Union and Mercosur, the South American trade bloc, reached an agreement to create the largest trading bloc in the world. If all goes ahead as planned, the pact would account for a quarter of the world's economy, involving 780 million people, and remove import tariffs on 90 percent of the goods traded between the two blocs. The Brazilian government has predicted that the deal will lead to an increase of almost $100 billion in Brazilian exports, particularly agricultural products, by 2035.
But the huge surge this year in Amazon deforestation is leading some European countries to think twice about ratifying the deal. In an interview with Mongabay, the German environment ministry made it very clear that Germany is very worried about events in the Amazon: "We are deeply concerned given the pace of destruction in Brazil … The Amazon Forest is vital for the atmospheric circulation and considered as one of the tipping points of the climate system."
The ministry stated that, for the trade deal to go ahead, Brazil must carry out its commitment under the Paris Climate agreement to reduce its greenhouse gas emissions by 43 percent below the 2005 level by 2030. The German environment ministry said: If the trade deal is to go ahead, "It is necessary that Brazil is effectively implementing its climate change objectives adopted under the [Paris] Agreement. It is precisely this commitment that is expressly confirmed in the text of the EU-Mercosur Free Trade Agreement."
Blairo Maggi, Brazil agriculture minister under the Temer administration, and a major shareholder in Amaggi, the largest Brazilian-owned commodities trading company, has said very little in public since Bolsonaro came to power; he's been "in a voluntary retreat," as he puts it. But Maggi is so concerned about the damage Bolsonaro's off the cuff remarks and policies are doing to international relationships he decided to speak out earlier this week.
Former Brazil Agriculture Minister Blairo Maggi, who has broken a self-imposed silence to criticize the Bolsonaro government, saying that its rhetoric and policies could threaten Brazil's international commodities trade.
Senado Federal / Visualhunt / CC BY
Maggi, a ruralista who strongly supports agribusiness, told the newspaper, Valor Econômico, that, even if the European Union doesn't get to the point of tearing up a deal that has taken 20 years to negotiate, there could be long delays. "These environmental confusions could create a situation in which the EU says that Brazil isn't sticking to the rules." Maggi speculated. "France doesn't want the deal and perhaps it is taking advantage of the situation to tear it up. Or the deal could take much longer to ratify — three, five years."
Such a delay could have severe repercussions for Brazil's struggling economy which relies heavily on its commodities trade with the EU. Analysists say that Bolsonaro's fears over such an outcome could be one reason for his recently announced October meeting with Chinese President Xi Jinping, another key trading partner.
Maggi is worried about another, even more alarming, potential consequence of Bolsonaro's failure to stem illegal deforestation — Brazil could be hit by a boycott by its foreign customers. "I don't buy this idea that the world needs Brazil … We are only a player and, worse still, replaceable." Maggi warns, "As an exporter, I'm telling you: things are getting very difficult. Brazil has been saying for years that it is possible to produce and preserve, but with this [Bolsonaro administration] rhetoric, we are going back to square one … We could find markets closed to us."
- Brazil's New President Could Spell Catastrophe for the Amazon ... ›
- Amazon Deforestation Increase Prompts Germany to Cut $39.5M in ... ›
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