WASHINGTON D.C. (
) -- Many investors might run to buy as many coal and oil stocks as possible at the mere mention of investment advice coming from an environmental non-profit agency.
This knee-jerk reaction denies the fact that the environmental movement and the capital markets are increasingly linked on the issue of climate change.
Case in point: Piper Jaffray's clean tech conference in New York on Tuesday featured the president and CEO of the National Wildlife Federation, Larry Schweiger.
The environmental movement's political pro had an important message for solar and wind investors, too: if you aren't already doing all you can to get carbon legislation passed, you should be.
Solar investors are spending a great deal of time lately worrying about the political changes taking aim at solar support in Europe -- particularly in Germany -- but is the critical legislative event of the moment for solar really the effort to get Washington D.C. to act on the issue of carbon?
The outlook for a comprehensive bill on energy policy linked to climate change has stalled in the Senate. Still, the fight continues, and President Obama's move last week to support nuclear energy and new oil and gas drilling could be a concession that helps overcome the formidable obstacles to legislative change, on climate change.
What's more, President Obama spoke to the Business Roundtable on the issue of energy legislation on Wednesday, and even mentioned solar by name -- something critics felt the President did not mention enough in his State of the Union address.
With this as a backdrop,
reporter Eric Rosenbaum spoke with the National Wildlife Federation's Schweiger about this critical moment in the carbon debate, and the outlook for solar energy. That Q&A follows on the next page....
TheStreet: Why should solar investors be on the front lines of support for the carbon legislation?
Schweiger: Simply put, if we can get this bill passed, it will transform the opportunities for wind and solar, and a new energy grid more generally. If we fail to get a bill passed, it will cast a long shadow over the renewable energies industry for a long time.
After the mid-term elections, it will be a long uphill struggle to get back to where we are now in terms of the legislative opportunity. We've been trying to get a price on carbon and a cap to shrink emissions so the free market can do its work in helping renewable energy industries to get where they need to be.
TheStreet: What have you heard at this clean tech conference from industry sources that has not been part of the typical debate in Washington over carbon legislation?
Schweiger: I've been struck by how many comments I have heard from solar investors and solar companies about how much capital China is putting into solar and crushing the U.S. on this issue. I think there is a general assumption in Washington that China versus the U.S. is a story about cheap labor and that's why they are beating us, and it seems to me that it is just part of the larger story, and China is beating us on providing the capital to get these renewable industries going. This gives us a perspective on how far behind we are in the clean energy race that you don't always hear in Washington.
We are trying to be sensitive to how what we do impacts the capital markets, because we want to move money towards these technologies as we press for the legislative changes that should benefit them. We need to make sure the capital gets to these renewable industries, but that doesn't change the fundamental nature of environmental policy and wildlife as our focus. Our interests just overlap with renewable energy interests.
TheStreet: President Obama came out last week in support of nuclear energy, as well as new oil and gas drilling, as part of the energy solution. Is this a step backwards or a necessary compromise that is a positive for wind and solar?
Schweiger: This is a matter of Capitol Hill mathematics. For the President to get the 20 Democrats who are on the fence he needs to get 5 or 6 Republicans, and to do that, he needs to address the energy issue from a Republican perspective. Bringing more Republicans on board means bringing more Democrats to the table.
If this deal is going to get done, it is going to be a mix of agendas. Everyone has a theory about what is good energy policy and what is bad, but in the end, you need to get 60 votes in the Senate, and in the end, it is only a grand bargain that will result in a deal on carbon, and which will, in turn, release investment for renewable energy.
It's not just about nuclear or solar. It is about energy independence, energy security, job growth and the environment. Anyone who tries to win on one agenda will lose, and it seems to us that there are more sides right now willing to accept a bargain, even one that may not be perfect. We haven't had this opportunity before, and it goes away next year, too.
TheStreet: There has been legislation introduced in California that brings to the fore the distance between the environmental movement and the renewable energy industry over land use. Do you think there is such a thing as "wise use of wild land," or is the concept of "wilderness" a fundamental obstacle for the environmental agenda in providing support for solar and wind farms?
Schweiger: All energy development, whether renewable or conventional, presents the environmental movement with some issues. We know we need to move away from carbon emissions, and so the key is finding space for activities like solar and wind to occur where there is no substantial wildlife or ecological values being destroyed in the process.
We don't want to put solar panels in the Grand Canyon.
There are areas on Bureau of Land Management land in the West that have been destroyed by oil and gas, and those areas already damaged should be considered for renewable energy development.
The important point is that with geographic information systems (GIS) technology today, we can overlay the best places for solar or wind with the important wildlife habitats and ecological systems. We have good data on both, and there are enormous parts of the desert Southwest with top-shelf solar capacity. It's just finding the places with low ecological value, overlaid with high solar value, and targeting projects to those areas.
I think always there will always be a bit of "not in my backyard" politics on any project, but if you do the advance work well, these conflicts can be avoided.
If it's a true wilderness area, any development needs to stay out. Still, the point is that there are ways of doing these deals so both environmental needs and energy needs are met, including the use of land swaps. Ultimately, our message to the renewable energy market is to not just "go anywhere" and assume that the way forward is whatever a developer thinks it should be.
We already have the history of the oil and gas industry, and very few players in that industry going through the land-use process in the right way. Since we are building a new industry with renewable energy, we should aim to get this process right from the outset, and that means the industry coming together with local communities and wildlife agencies. We don't have the luxury of saying no to renewable energy, but there is a way to come to agreement when parties actually work together as opposed to moving preemptively.
TheStreet: There is significant resistance to getting the Senate to act on carbon policy. Lately, there has also been a big campaign questioning climate science and some polls showing a diminishing of support for climate change policy. Are you worried about the recent reports of the public doubting the science behind climate change more than ever before at the exact moment the support is needed for this effort?
Schweiger: Because we're getting close to passing a climate bill, the intensity has increased, and we are seeing a maximum intensity effort to distract the public from and ultimately derail an energy policy solution. I give the conventional energy industries an "A" for being masterful at the media campaign, but they are creating an illusion. They make it appear as if there is a debate on the fundamentals, rather than how bad it will be if we don't act.
We do polling also, and in battleground states, there is not just a majority support for new climate policy, but super-majority support. Americans want a solution on energy that encompasses clean energy jobs, energy independence and protecting the environment. We have that opportunity now, and we think with the range of interests being reflected in the bargaining in Washington, any politician who simply stands against energy reform will get a rude awakening at the polls in the mid-term elections.
-- Reported by Eric Rosenbaum in New York.
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