Meat Alternatives: The New Tesla?

As the CEO of Louis Dreyfus Commodities, one of the world’s largest commodity traders, Gonzalo Ramirez has a unique vantage point to survey the world of food. It was notable, then, when Ramirez recently opined to the Financial Times, that the only way to meet growing demand for protein consumption in emerging markets, while also reducing agriculture’s large carbon and water footprints, is to rely on artificial, lab-grown meat and plant-based protein. Ramirez knows what he’s talking about. A roadmap for rapid decarbonization was recently published in Science, which lays out the carbon emission cuts needed by 2050 to keep global warming below 2 degrees Celsius. In response, the World Resources Institute (WRI) noted that global food consumption patterns would have to change dramatically from 2020 to 2030 for this decarbonization to occur. In particular, WRI suggests that Western consumers cut their meat and dairy consumption in half, and thereby halve their dietary carbon footprint. Beef is particularly resource-intensive, requiring more land and generating more emissions per unit of protein than any other food. Producing one kilogram of beef emits an estimated 26 kilograms of carbon dioxide, which is why beef accounted for approximately 34 percent of Americans’ diet-related greenhouse gas emissions in 2014. But if shifting to plant-based protein sources was simply a question of protecting the environment, Ramirez and his colleagues in the food world might be less interested. The fact is, consumer demand for protein is already shifting. The USDA reported that the planting of chickpeas in the U.S. is expected to climb 53 percent from the prior season, driven by a trend toward “more healthful and varied snacking.” The legumes are quickly gaining popularity as an ingredient in hummus and falafel or as a flavored snack. Investors are starting to take notice as well. Lab-grown meat, produced by companies like Memphis Meats, is still some way from maturity. But plant-based protein companies like Impossible Foods and Beyond Meat have attracted funding from savvy venture capitalists like Bill Gates, Khosla Ventures and Kleiner Perkins in their quest to produce meats and cheeses from plant ingredients. Animal protein companies don’t want to be left out of the trend either: Beyond Meat announced in 2016 that meat producer Tyson Foods had taken a five percent ownership stake. Some critics shrug at the plant-based protein trend, arguing that it’s only a niche, and one that will always be too expensive for mainstream consumers. This criticism doesn’t give due credit to the strategy in place. The founders of Impossible Foods and Beyond Meat both insist that they want their products to taste even better than traditional meat. They also argue that their products will ultimately be cheaper than meat because plant-based protein requires fewer resources. Securing a base of enthusiastic customers will allow the plant-based producers to scale up production, and lower costs. This last argument is more than conjecture. Impossible Burger is currently only served at 10 select restaurants across the country, where hordes of curious patrons wait in line. But a new facility, near Oakland Airport, will be able to produce at least 12 million pounds of Impossible Burger meat a year, 250 times more than today. By the end of the year, Impossible Foods expects to supply 1,000 restaurants at lower cost. If the outline of this strategy sounds familiar, look no further than electric vehicle manufacturer Tesla. Like the plant-based protein companies, Tesla started with a high-end product that owed its appeal to sleek styling and eye-catching performance rather than its environmental benefits. Now it can’t keep up with demand. Investors have endorsed the strategy, affording the company a $50 billion stock market valuation. With Tesla overtaking storied companies like GM and Ford to become the largest U.S. automaker by market capitalization, copying its playbook doesn’t seem like a terrible strategy for plant-based protein.

From the Floor of the New York Stock Exchange to the Pews of Trinity Church, Wall Street is Waking Up to Water

Walking beneath the iconic columns of the New York Stock Exchange in Lower Manhattan, one only has to glance up Wall Street to spot the spire of Trinity Church. Despite being within one block of each other, these two spheres of influence can seem miles apart. Yet on this year’s World Water Day, these divergent institutions were aligned on the importance of tackling one of our society’s greatest challenges – the water crisis. A renewed sense of urgency for better understanding water risks and doubling down on solutions flowed amongst both the NYSE crowd and the pews of Trinity Church. If water consumption continues without reform or regulation, the stark reality is that by 2030, forty percent of global demand for water will not be met. Closing the gap requires the awareness and innovation of investors, companies and communities. ​ Speaking on different panels at these institutions, what struck me was just how interconnected the opportunities are for solving water challenges.  What investors and companies choose to implement ripples throughout society – from business bottom lines and investment portfolios, to communities affected first-hand on the ground. NYSE forum panelist Emilio Tenuta, Vice President of Corporate Sustainability at Ecolab said “We know that water is an increasingly real risk to communities and a material risk to businesses. Therefore, businesses need to play a critical role in transforming the way we work to help solve this global challenge.” Momentum is indeed building among companies and investors for applying innovative solutions to curb this thirst.  At the NYSE forum, Ecolab, along with partners Trucost and Microsoft, launched the Water Risk Monetizer. This newly refreshed corporate tool provides site-specific data intelligence on water availability and quality designed to help companies conserve water and predict water expenses. The Water Risk Monetizer is just one of the many tools – including WRI’s Aqueduct, Ceres’ Aqua Gauge and WWF’s Water Risk Filter – that both businesses and shareholders can use to map their water related risks, set appropriate goals and put water stewardship actions into place. And investors are increasingly taking notice at which companies are addressing freshwater risks and making smart water management a business imperative. As Reid Steadman, Managing Director of Equity Indices at S&P Dow Jones who also spoke at the NYSE forum put it, “Every company needs to have a water strategy. We would find it odd if major companies aren’t engaged in these types of activities. I would expect in five years’ time you will see billions of dollars tracked to strategies that somehow take water into account.” The thirst for solutions, evident at Ecolab’s World Water Day panel, is echoing across mainstream investors. ACTIAM just announced a goal to achieve a water-neutral investment portfolio by 2030, and here at Ceres, membership in our Investor Network water-focused working group is climbing. Nearly ninety global funds have joined this working group to combat this modern crisis – with members ranging from the largest pension funds, to large asset managers, to foundations and savoy faith-based institutions. ​ It’s heartening that investors and companies are stepping up to address water risks because the impact of water, whether through pollution or scarcity, can be felt tenfold on the ground, according to the speakers at Trinity Institute’s Water Justice conference. Powerful stories were heard from community members in Flint, Michigan and Standing Rock, North Dakota – two cities right here in The States who are grappling with water pollution and contamination issues. And Winston Halapua, Archbishop and Primate of the Diocese of Polynesia and Aotearoa New Zealand, took us across the globe to Fiji, where the effects of climate change have left locals facing sea level rise flooding vital farmlands, impacting local livelihoods and erasing their sense of “home.” Maude Barlow, a former United Nations senior advisor on water, reaffirmed the urgency for a shared search for solutions, “What we do right now matters. We need a new water ethic that puts water protection and justice at the heart of policy and practice. Every policy we create must ask, ‘What is the impact on water?’” Each story underlined the human right to water and the urgent need for action through the convergence of locals and higher institutions. The tools and opportunities presented at Ecolab could prove to have direct, positive effects on the communities currently facing strife and prevent further disruption. So what’s next? One offer is Ceres Investor Network members can begin to navigate the tides by joining the Investor Water Hub working group - where investors meet monthly to share best practices and other innovations for elevating water issues in their decision-making. Collectively, the working group will be launching an Investor Water Toolkit this fall, an online portal filled with resources, best practices and ideas to help investors make sound water analysis part of their portfolios. What we choose to do – or not do – trickles down and has an impact everywhere. But last week in Lower Manhattan, the NYSE’s Closing Bell and the tolling of Trinity Church’s bells resounded in harmony, like flowing waters.

How California Legislators Can Create a Path to Water Sustainability

What a difference a year makes, I’m thinking as I head to Sacramento for meetings with legislators and company members of Ceres Connect the Drops, a campaign my organization spearheaded to drive smart water use in California. Last year, more than 90 percent of the state was experiencing some level of drought – today, just 8 percent is. This winter, our state was inundated by rain and snow, with precipitation beating records going back to before 1895, when they started keeping track. And the Oroville Dam has been the big story of late, replacing last year’s headlines about fallow fields. It would be nice to think that our water worries are over. Unfortunately, it’s not that simple. This cycle of extremes is our new normal. The whiplash from drought to inundation is one more result of climate change, and we need our legislators to remain committed to solving the state’s water issues for the long term. The business leaders joining me in Sacramento understand that tackling water issues is a long-term play. No company or industry can thrive without a stable, reliable supply of good quality water. Legislators have to help prepare California so the state is resilient under both extremes – water scarcity and excess. And in fact, there are some very promising concepts aimed at keeping us on the right track, and bill proposals to turn those concepts into reality. Front and center is the work around conserving and maximizing our local water supplies. Increasing water efficiency is one of the best ways to address California’s water challenges, and it saves companies money. For instance, conserving water and recycling water are typically much more cost-effective than importing water or developing desalinization facilities. ​ California lawmakers gather for Gov. Jerry Brown’s annual State of the State address on January 24, 2017, in Sacramento, California. New bills proposed by state legislators tackle the state’s issues with water sustainability.(Rich Pedroncelli, AP) Two bills under consideration right now – one in the California State Assembly, the other in the California Senate – could make real strides in conserving local water. The first is AB 1667– introduced by assembly member Laura Friedman – which would require the installation of dedicated landscape meters on existing commercial, industrial and institutional properties over a specified size threshold by January 1, 2020. The logic behind this bill is straightforward: You can’t manage what you don’t measure. Dedicated landscape meters would help companies better manage water use by helping to find irrigation system leaks and inform landscaping decisions, for example. Its two companion bills, AB 1668 and AB 1669, will work in tandem to make conservation a way of life in California. The second bill is SB 740 – introduced by state Sen. Scott Wiener – which takes a different tack. It directs the State Water Resources Control Board to offer local governments a framework for regulating the treatment of alternate water sources, such as gray water and stormwater, to be consistent with public health standards. Many companies are trying to do the right thing and implement these systems at their facilities but are facing regulatory barriers. These systems can be managed in a safe way, and we need our state to pave that path. Investing in smart water infrastructure is another key building block to a robust water future. California needs an infrastructure system that is effective in times of drought and in times of excess. Too much precipitation has washed into the sea because the state does not have the right infrastructure to capture the deluges we’ve experienced this winter. Several legislative proposals, including the California Drought, Water, Parks, Climate, Coastal Protection and Outdoor Access for All Act of 2018 (SB 5 and AB 18), outline funding for drought preparedness, flood protection, clean drinking water and climate adaption, among other projects. But legislators have to ensure that bond dollars are spent on projects that truly improve California’s water security and consider sufficient funding in the long term. We all know budget resources are tight and that the state regularly underfunds water infrastructure projects. To make the most of limited dollars, we must be laser-focused on investing public money on cost-effective local water projects, such as stormwater capture and recharge and water recycling. On-farm recharge of floodwater, for example, can be very cost-effective, with costs running between $63 and $168 per acre-foot of water compared to surface storage projects that can cost $1,900 or more per acre-foot. Finally, we must recognize that our groundwater basins are still severely overdrafted despite the recent rains. We have to take a step back and plan out thoughtful, long-term sustainable groundwater management. Our legislators must ensure that the Sustainable Groundwater Management Act of 2014 is implemented and that appropriate fiscal and administrative support is provided to enable local agencies in high-risk, fast-depleting groundwater basins to develop their sustainability plans. But legislators also need to take immediate steps to protect water sources that are vulnerable right now. Some 21 groundwater basins throughout California are deemed “critically overdrafted,” even with all the torrential rains and snow. That’s causing wells to dry up, land to subside and saltwater to intrude from the sea. Because the groundwater law won’t be fully implemented for several years, groundwater from these overdrafted basins is in jeopardy. That’s where SB 252, introduced by state Sen. Bill Dodd, comes in. The bill calls for greater transparency in providing existing pumpers and landowners in critically overdrafted basins with important information about the use of shared groundwater resources, specifically regarding applications for new well permits. Connect the Drops’ partners are doing their part on water stewardship, but no single sector in society can help prepare us for the impact of climate change. We all are in this together. Today, we’ll be calling upon our state leaders to help get the state on a sustainable path – in times of excess and in times of drought. Join more than 500 investors, companies and sustainability leaders to talk about business solutions to key sustainability issues including water scarcity, climate change and clean energy at the Ceres Conference 2017 in San Francisco on April 26 and 27. Learn more and register at www.ceresconference.org. Read the post at Water Deeply

World Water Day: Six Trends for Optimism

More than half a billion people today lack access to clean water, and with climate change, water pollution and booming population growth, pressures on limited water supplies are ratcheting up. ​ Tackling the water crisis can feel like an uphill battle in the United States, with one environmental roll back after another proposed by the Trump administration. But all is not doom and gloom. Companies and investors are moving forward, taking steps to value water for its true worth and working with suppliers, farmers and local communities to preserve water supplies. Innovation is also happening at the municipal level. On World Water Day 2017, here are six positive trends that give me hope: 1) Global Companies are Embracing Sustainable Development Goals Launched by the United Nations in 2015, the Sustainable Development Goals (SDGs) include a target to ensure everyone has access to safe water by 2030. Big companies that use a lot of water around the world, such as BASF, Coca-Cola, Diageo, Novozymes and Unilever are integrating these water goals into their sustainability plans. Diageo, the company that brings you Guinness, for example, released an ambitious plan that includes a 50 percent improvement in water use efficiency and 100 percent recycling of wastewater. It’s also developing community projects in water stressed areas where its production sites are located and has thus far provided 600,000 more people with access to safe drinking water. These companies are recognizing that to ensure long-term water supplies for their business, they must give water back to the communities where they operate. 2) The World’s Biggest Water User is Making Strides That’s agriculture, of course. From farm to factory, producing food is the most water intensive business on earth. More than 70 percent of the world’s freshwater is in fact used to irrigate crops and raise livestock. Through their massive purchasing power, the companies that buy, process and sell the food we eat have the power to raise the bar for sustainable water use in farming. And more of the largest food companies – from PepsiCo to Campbell’s Soup to Driscoll’s are starting to do just that, by evaluating their growing regions most at risk for water scarcity, and developing plans and targets for working with farmers to conserve water resources. ​ Last fall, in fact, a number of food companies – including Hain Celestial, Hormel Foods, PepsiCo and WhiteWave Foods – worked with Ceres and the World Wildlife Fund to set new commitments to address water risks as part of the AgWater Challenge. Among the commitments, PepsiCo is working with its agricultural suppliers to improve the water efficiency of its direct agricultural supply chain by 15 percent by 2025 (compared to 2015) in high water risk sourcing areas, including India and Mexico. And Hormel Foods is developing a the first comprehensive water stewardship policy for a meat company, setting water management expectations that go beyond regulatory compliance for its major suppliers, contract animal growers and feed suppliers. 3) Companies in the West are ‘Walking their Talk’ on Water Conservation Increasingly, companies operating in water-stressed regions are proactively taking action to conserve and protect water sources. Kellogg’s, Gap, and Genentech are among a growing cadre of companies engaging with California policymakers on the urgency for stronger water management policies in this drought-prone state. Even in the era of Trump, companies are seeing it in their collective interest to help get water policy right. Many of these same companies are also using innovation to reduce their water consumption, such as by adopting large-scale water reuse practices. Or some, like General Mills and Sierra Nevada, are collaborating with stakeholders at the local, watershed level on the development of groundwater management plans, helping to implement California’s new groundwater law. These companies understand that staying in business over the long-term will require a fundamental shift in how they use water. 4) Cities are Driving Innovation The tragedy in Flint, Michigan and widespread concerns about lead contamination in drinking water are grabbing news headlines, and rightfully so. Aging infrastructure leaves many around the U. S. vulnerable to tap water with high lead levels. It is an urgent problem that needs to be addressed by government leaders. Yet at the same time, many cities are deploying innovative solutions to protect and preserve water resources. The San Francisco Public Utilities Commission, one of the first public agencies to remove lead pipes from its water infrastructure decades ago, remains on the cutting edge, implementing numerous water reuse and reclamation projects as well as innovative wastewater and storm water management projects. In Philadelphia and Syracuse, New York, local water officials are implementing storm water management programs that use green infrastructure to help capture runoff and protect their water supply. Big Spring and Wichita Falls in Texas have developed potable reuse -- “toilet to tap” -- facilities that clean wastewater to drinking water quality. In Washington, D.C., local officials are producing renewable power from its wastewater by "pressure cooking" the solids left over at the end of the wastewater treatment process. 5) Wall Street is Becoming Water Aware Devastating droughts in California, Brazil, South Africa and elsewhere, coupled with global trends of groundwater depletion and water quality degradation are motivating investors to become more water aware. Many are increasingly recognizing that the global water crisis is not only a social, but an economic, concern, and they’re moving their money to help tackle the crisis. ​ In little more than one year, for example, Ceres’ network of institutional investors focused on water has grown eight-fold, from a group of 10 investors managing $1 trillion in assets, to 80 investors with some $19 trillion in assets. Today’s announcement by Ceres partner ACTIAM, a European asset manager with approximately $56 billion in assets, is an example of what investors are doing to lift all boats on water issues. ACTIAM has pledged to achieve a water neutral portfolio by 2030, meaning that it expects the companies in its investment portfolio to develop plans to consume no more water than nature can replenish and cause no more pollution than is acceptable for the health of humans and ecosystems. 6) Science-Based Water Reduction Targets are Picking Up Steam If you’re curious whether companies’ water neutrality goals can actually result in meaningful water conservation, a consortium of NGOs, including the World Resources Institute (WRI), CDP and WWF have been working with companies on that score. They’re taking companies’ water neutrality, or balance goals, and helping them set science-based water reduction targets that reduce business risks while serving communities’ water needs. It’s the next wave of science-based targets for companies, following the campaign for science-based GHG emissions targets. The World Resources Institute, for example, has been working with Mars Inc. to develop an approach for setting water targets informed by science, and measuring impacts and tracking performance over time. These targets take into account the latest science on the global carbon budget, water stress and other ecological limits.   Read the post at National Geographic

Commentary: Virginia Should Take Advantage of Vast Clean Energy Opportunities

With dozens of Fortune 500 companies looking to run their facilities on renewable energy, Virginia has a golden opportunity to ensure that these investments — and the jobs that come with them — are being made in the Old Dominion State. In late February, a Nestlé USA executive met with Governor McAuliffe’s ‘Executive Order 57 Workgroup’ to call for greater access to renewable energy and energy efficiency for large energy users. Nestlé has long-running manufacturing facilities in Danville and King William and recently announced it is relocating its headquarters from California to Arlington, Virginia. The ‘EO 57 Workgroup’ is exploring ways the Commonwealth can reduce carbon pollution and utilize clean energy in the electricity sector. Unfortunately, businesses are currently unable to access cost-competitive clean energy in Virginia. In November 2016, eighteen major businesses—including Nestlé, Microsoft, Walmart, Equinix, and IKEA—asked state lawmakers for more cost-effective options for sourcing renewable energy. Companies wishing to procure clean energy through third-party financing, cost-competitive renewable energy tariffs, direct arrangements, or community solar have a difficult time doing so because of wide-ranging barriers. The General Assembly, State Corporation Commission and Governor’s office all have key roles to play in removing these barriers so that forward-looking companies like Nestlé can procure as much renewable energy they’d like. Nestlé has set ambitious clean energy goals because of the cost savings and stability these low-carbon energy resources provide; fossil fuels, by contrast, are prone to volatile price swings. Nestlé has committed to sourcing 100 percent of its global electricity use from renewable energy. For a company with operations in 85 countries grossing over $92 billion in sales, this will be no easy feat. However, the company is already achieving 100 percent renewable energy use in the U.K. and Ireland, while Nestlé Mexico is meeting 80 percent of its electricity need with wind power. We would expect that the company plans to move in the same direction with its U.S. operations, which includes 87 factories spanning 47 U.S. states. Utilities like Dominion Resources should be taking notice, too. Virginia is a key data center hub in the U.S., and many of the companies building those data centers—LinkedIn, Akamai, and Salesforce among them—want to use green energy to power them. Virginia also has a major opportunity to reap cost-savings benefits from greater investments in energy efficiency. According to Ceres’ Benchmarking Utility Clean Energy Deployment: 2016 report, Virginia’s largest electric utility, Dominion Resources, ranks dead last among 30 of the largest U.S. electric utilities in annual incremental energy efficiency investments. Energy efficiency is low-hanging fruit, and utilities in other states are investing in solutions that provide major cost savings to consumers and businesses. Governor McAuliffe has demonstrated strong leadership by setting an eight percent renewable energy target for state agencies and by issuing Executive Order 57, which directs a workgroup to issue carbon reduction recommendations to the Governor by May 31st. The key question is what will come out of the E0 57 workgroup. Environmental advocates have proposed to cap and reduce carbon emissions by a rate of 2 percent annually. This proposal appears to be well within the bounds of existing executive authority and would provide policy certainty for businesses and investors who are looking to increase clean energy. It is encouraging that the General Assembly appears to be open to broadening access to renewable energy—the formation of the ‘Rubin Workgroup’ being one such positive sign. The Assembly recently passed a bill (SB 1393) that would launch a utility-administered community solar-like program for smaller-scale electricity customers. While this program wouldn’t be viable for large corporate energy purchasers, it shows that lawmakers are willing to come to the table to try to identify solutions. Virginia is moving in the right direction, but the Commonwealth can still make far greater progress to spur clean energy. Doing so will benefit both the Commonwealth’s business community and its economy.

Are House Republicans the Climate’s Best Hope?

Given the Trump administration’s hostile stance on climate change and attack on crucial Obama era climate regulations you would be excused for thinking that bipartisan climate action in Washington is a far off fantasy. And yet, quietly, the foundation is being laid for long-term solutions. Last week, 17 Republican members of the House of Representative’s, hailing from Florida, Utah and eight other states, introduced a Republican Climate Change Resolution, declaring their commitment, “ to create and support economically viable, and broadly supported private and public solutions to study and address the causes and effects of measured changes to our global and regional climates.” This is clearly not the party line that we’re hearing from the White House, but it echoes other announcements from Republican groups regarding climate change that are becoming both stronger and more frequent. Recently, the Climate Solutions Caucus, a group in the House created to explore policy options that address climate change, and comprised of equal numbers of Democrats and Republicans, announced their 30th member. Representative Carlos Curbelo (R-FL), co-chair of the caucus, characterized new EPA Administrator Scott Pruitt’s recent remarks on carbon dioxide emissions not being a primary contributor to climate change as “reckless and unacceptable.” Several weeks earlier, a group of well-respected former Republican administration officials pitched a national carbon tax to the White House. Meanwhile, a bipartisan coalition of governors from Kansas, Arkansas and a 18 other states sent a letter to President Trump urging him to promote and expand the development of wind and solar energy. These actions illustrate an encouraging trend that Republicans recognize the problem climate change presents, and understand that if they aren’t at the table on the issue, they’ll eventually pay the price. The facts on the ground are undeniable, and voters want answers and action from their elected officials, as shown in poll after poll. Increasing pressure from both the public and private sector – 1,000 companies took out a full-page ad in Politico last week calling for climate action - is forcing Republicans, especially those in districts seeing the devastating effects of climate change firsthand, to confront the issue. The 17 Republicans who introduced the resolution split dramatically with many members of their party on climate change, and they have shown bold leadership for recognizing the consequences of inaction in this divided political landscape. While we don’t expect immediate action from this group in terms of legislation, it sends the message that building long term support for climate policy is a priority for a significant subset of House Republicans. Seventeen may not sound like much, but, for reference, perhaps the most well know group in the House, the Freedom Caucus, has just 30 members and has the votes to negate the Republican majority.  If the resolution continues to grow, as we expect it will, it presents the possibility of bipartisan resistance to the Trump assault on environmental regulations that will damage local districts just as a warming climate and more volatile weather are already doing. We’ve seen Republicans speak out on climate change, now we expect that they will back those words up with their votes in Congress. That will be the true test of this resolution.

Why Pruitt's 'Cooperative Federalism' Spells Trouble for Clean Water Protection

A majority of Americans value strong federal protections for clean air and water, which provide both environmental and economic benefits. But they should be very worried that the basic human expectations of healthy air and safe water will quickly turn cloudy if the new U.S. Environmental Protection Agency (EPA) administrator's pledge to regulate through "cooperative federalism" becomes a reality. Cooperative federalism, at its most benign, is about allowing each state to tailor its own approach to enforcing environmental rules. At its worst, it's about the federal government turning a blind eye to states that shirk the nation's environmental laws or that simply don't have the coffers to pay for monitoring and enforcement. "Process, rule of law and cooperative federalism, that is going to be the heart of how we do business at the EPA," said EPA Administrator Scott Pruitt, who has promised to follow the Trumpadministration's will to slash EPA's budget and soften its rules. To see how cooperative federalism erodes environmental protection, look no further than the 2015 Waters of the United States rule. President Trump issued an executive order last week announcing plans to undo the rule, which clarifies the federal government's authority to limit pollution in bodies of water not explicitly covered by the Clean Water Act. Those smaller bodies of water—typically streams, wetlands and rivers, which account for more than half of the nation's freshwater resources—feed into larger water bodies that provide key drinking water and recreational opportunities for the public, as well as water supplies for business. Keeping them clean is vital for the nation's health and economic prosperity. The executive order, coupled with the administration's penchant for cooperative federalism, send a strong message that if states choose not to protect smaller streams and wetlands, they won't get pushback from the federal government. And as state environmental budgets shrink, many simply don't have the resources to ensure healthy streams and clean drinking water on their own, even if they wanted to. Forty state environmental agencies have reduced staff in recent years, with the biggest cuts being in North Carolina, Florida, Michigan, New York, Illinois and Arizona, according to a fall 2016 report by the Center for Public Integrity.   Pruitt's home state, Oklahoma, for example, spends a paltry $13 million on environmental protection. Compare that to Connecticut, which has an environmental budget twice the size of Oklahoma's but less than one-tenth the land mass or with neighboring Arkansas, with a budget nearly triple the size of Oklahoma's. Water pollution from industrial-sized poultry farms operating in the northeast corner of Oklahoma and in neighboring Arkansas, has been a source of huge controversy, health concerns and lawsuits for more than 25 years. Phosphorus, the primary pollutant in poultry manure, can trigger toxic algae blooms, threatening rivers, lakes and other waterways that feed into the Illinois River. Cooperative federalism gives Oklahoma and Arkansas more opportunity to turn a blind eye to manure runoff and other untreated pollution in waterways covered by the Waters of the United States rule. Similarly, though the U.S. Geological Survey has linked oil and gas hydraulic fracturing drilling to groundwater and surface water pollution, Oklahoma has yet to identify whether its surface waters face pollution threats from fracking activity. J.D. Strong, executive director of the Oklahoma Water Resources Board said that Oklahoma does not have the budget for widespread testing in the state. These same challenges can be found in states across the country. North Carolina has a long history of water pollution from coal ash spills and manure lagoons—a legacy that gained national prominence last fall when Hurricane Matthew triggered massive flooding and pollution overflows from thousands of hog farms. At the same time, contentious political battles in that state have contributed to a dramatic decrease in its environmental budget, from $126 million in 2011 to just $81 million in 2015. Even states with larger environmental budgets may struggle to protect smaller waterways under cooperative federalism because of political fights that play out at the state level. In Kentucky, regulators and utilities are pushing to loosen regulations on the state's coal ash ponds and landfills. Yet over the past six years, arsenic and selenium have been found to be leaching from a coal ash pond at a major power station into groundwater and directly into Herrington Lake. Despite remedial measures taken by Louisville Gas & Electric and Kentucky Utilities, the pollution persists and is poisoning fish in the lake. In Florida, Gov. Rick Scott has gutted the state environmental agency—earning him a scathing "environmental disaster" editorial in the Tampa Bay Tribune. In addition to cutting support for clean water and conservation programs, state-driven enforcement has disappeared nearly altogether—enforcement cases fell by 81 percent from 2010 to 2015. Pruitt's cooperative federalism mantra, where states should see us as "partners, not adversaries," sends us down a perilous path of continued diminishment of precious natural resources across the country. Leaving states on their own to protect the nation's vital water resources, without holding them to minimum standards or supporting them financially, is a slippery slope indeed towards a dirtier America—an America that the vast majority does not want. Read the post at EcoWatch

How Food Companies Can Help Drive Agricultural Water Conservation

Last week I was a guest on an “inspection” trip of the Colorado River Aqueduct, the engineering marvel that delivers up to 1 billion gallons (3.8billion liters) of water daily to Southern California from the Colorado River hundreds of miles to the east. Organized by the Metropolitan Water District (MWD) of Southern California, these inspections are a relic of an old piece of administrative code. Today they’ve become a well-choreographed public relations effort – right down to the framed MWD mission statement on the walls of the bedrooms provided to guests. All of the history and statistics thrown at us over the two-day trip tell an incredible story of the aqueduct as the backbone of Los Angeles’ and Southern California’s tremendous growth. Without it, Southern California would not be the population hub and economic center that it is today. But the story is also about a 1930s engineering feat that pumps water from the intake at Lake Havasu 242 miles (390km) west to Lake Mathews, up a total elevation of 1,617ft (493m) to approximately 19 million urban customers. And it’s a story that’s been ripe with controversy since the project’s inception in 1927.   When I placed my hand on the aqueduct and felt the vibration of the water rushing at 1,605 cubic ft (45 cubic meters) per second beside me, the magnitude of this engineering accomplishment sank in. But a short stop with the Palo Verde Irrigation District (PVID) near Blythe, California, was what really captured my attention, because the challenges I saw there are a microcosm of our state’s larger water woes. An agricultural region of 131,000 acres (53,000 hectares) growing alfalfa, wheat and cotton, PVID has a “number one priority” Colorado River water right for 104,500 acres (42,300 hectares). That means PVID can take as much Colorado River water as it wants before holders of lesser rights such as MWD can have their “share.” And it pays nothing for this water. Some growers in the district utilize flood irrigation practices, and water-intensive alfalfa, grown as feed for cattle, is the most prevalent crop. Needless to say, Palo Verde landowners don’t have much, if any, incentive to conserve water because their taps will continue to flow – drought or no drought. That also means that PVID, although most have never heard of it, has become a big player in California’s water debate. In 2004, MWD entered into a 35-year agreement with PVID to develop a land-fallowing program. Fallowing land allows farmers to transfer water to MWD for a payment; close to 30 percent of the acreage in the valley is currently fallowed. In addition, MWD purchased approximately 30 percent of the land in the valley to obtain the water rights and is now the majority landowner. MWDcan direct the fallowing of some of this land and also work with tenant farmers to reduce consumptive water use. Others also have their sights on PVID’s coveted senior water rights. In 2016, a Saudi Arabian dairy paid $31.8 million for 1,790 acres (720 hectares) of land near Blythe to grow alfalfa to ship back for feed for its cattle. With an ironclad water right that allows for limitless water use, how can we encourage water efficiencies so that enough remains for the environment and other beneficial uses such as drinking water for MWD customers? One way is for the food companies that source from the Palo Verde Valley and other water-stressed areas to engage more directly with their suppliers to strengthen farming practices that conserve water and protect watersheds. In 2015 Ceres released a report, “Feeding Ourselves Thirsty,” which ranked 37 major food companies on the quality of their corporate water management. The report found that some are taking wide-ranging actions to manage water risks across their operations and supply chains, but most have a long way to go. Notably, meat, dairy and agricultural product companies – those most likely to source crops such as alfalfa – scored most poorly. An update of the report will be released later this year. Food companies ought to be working on water efficiency with farmers in their supply chains because as water supplies tighten in California and other major growing regions across the world, traditional approaches to managing commodity shortages and high crop prices – such as price hedging and geographic diversification – will become less effective. Key strategies that food companies could employ include setting sustainable agriculture policies and time-bound sourcing goals, and collecting data from farmers on their practices while providing assistance and incentives for improvement. In addition, companies can engage in water policy discussions to ensure California’s rules and regulations promote maximizing the water we already have. That’s why Ceres formed Connect the Drops, a 28-member business-led coalition that includes companies such as General Mills and WhiteWave, which have operations and supply chains in California. The group works with our state’s decision-makers on water policy reforms to ensure a sustainable supply. This year may be a “bumper crop year,” according to MWD, thanks to all the rain we’ve received. While that’s welcome news for the region, many believe that a Colorado River shortage declaration is inevitable in the very near future for the states that form the Colorado River Compact. Such a declaration could eventually curtail California’s water allotment, which is why we must figure out how to live under a scenario with less Colorado River water. Companies engaging directly with farmers – whether in the Palo Verde Valley or elsewhere in the Colorado River Basin – are central in helping us achieve a sustainable water future. Image courtesy of Kirsten James Read the post at Water Deeply

Carbon Tax Proposal Deserves Attention, But Big Questions Remain

A group of prominent conservative political and thought leaders, under the newly-formed Climate Leadership Council (CLC), recently released a proposal for a carbon fee and dividend model for the U.S. economy that seeks to set the stage for future conservative and bipartisan discussions on tackling climate change. The authors of this proposal are highly respected Republicans, and it is clear that they are taking this initiative seriously. Calling for a “limited government, free market approach” to reduce carbon pollution that is causing climate warming, the group is led by former Secretary of State James Baker, former Treasury Secretary Hank Paulson and former Secretary of State George Shultz. They have already met with White House officials on the proposal and it also got an endorsement yesterday from Exxon’s new CEO. Their idea of a carbon tax is not new, nor is it particularly partisan. For experts concerned about ensuring ample pollution reductions, however, its plan to eliminate some or all of EPA’s authority to regulate greenhouse gas pollution is highly concerning, and is likely a non-starter for environmental advocates and many others who value regulatory stability. On its face, the proposal is simple: a carbon pollution tax levied on upstream carbon sources that would increase over time (a standard, but crucial, design mechanism). The revenue raised from the tax would be evenly distributed back to the American people. However, the proposal only applies to carbon pollution – not to other greenhouse gas pollutants such as common refrigerants. At the same time, some or all of the federal regulatory authority to deal with carbon pollution (not other greenhouse gases) would be phased out in an unspecified fashion. In recognition of the need to achieve actual carbon pollution reductions and in a nod to the need to bring environmentalists along, the level of the tax must be strong enough to generate more pollution reductions than all Obama-era regulations would have produced.  The CLC calculates that starting at $40 a ton is sufficient (for reference, that is quite similar to the Obama administration’s calculation of the social cost of carbon, though it’s still far lower than figures proposed by many leading economists). Reaction to this new proposal has ranged from enthusiastic to tempered support. Democratic U.S. Senators and climate advocates Sheldon Whitehouse (Rhode Island) and Brian Schatz (Hawaii) both released statements praising the overall intent of the proposal without commenting on specific details (they have introduced legislation with many similarities). The Natural Resources Defense Council’s reaction was quite simple: “carbon tax-yes, removing EPA authority-no.” Most conservative think tanks, such as the Heritage Foundation, which generally question the science behind climate change, have come out in strong opposition to the proposal, but libertarian think tanks R Street Institute and the Niskanen Center have put forward decidedly more favorable and nuanced perspectives. For the past year, Ceres has been working with our company partners in Business for Innovative Climate and Energy Policy, our investor partners in the Investor Network on Climate Risk and Sustainability, and others to understand and evaluate various carbon pricing proposals. Whether it is support for carbon pricing or the EPA’s Clean Power Plan (which – despite being a regulatory mechanism – is structured as a market-based solution), we have seen sustained and broad private sector interest in market-based solutions for climate change. Companies and investors also want solutions that provide long-term regulatory certainty and sufficient ambition to effectively reduce pollution at levels needed to avoid potentially catastrophic climate warming. Despite the current political landscape, business and investor interest in carbon pricing is not flagging – if anything, it’s growing stronger. As for our take, we are encouraged to see prominent and respected conservative voices taking the threat of climate change seriously and putting forth a thoughtful proposal to address the problem and ensure that America is a leader in creating and capitalizing on innovative, effective global solutions. But we also have concerns that trading a carbon price for EPA authority on carbon pollution is likely to have significant unintended consequences. For example, what if such a trade occurred, but then the carbon price that was used was insufficient for reducing pollution at levels needed? Or, even worse, what if a future Congress decided to repeal the carbon fee altogether? And what about the greenhouse gases that would not be addressed by the proposal? Without some sort of “snapback” EPA authority or environmental integrity mechanism for sectors of the economy that don’t respond well to a carbon tax (such as transportation or agriculture), it will be increasingly difficult to build political consensus and support for such a trade. In addition, even with a strong carbon price in place, there will continue to be a critical need for complementary policies that can help reinforce the effect of the carbon price and continue to spur innovation and emissions reductions across the economy – especially, as the need for broad national deep decarbonization becomes ever more apparent and urgent. The authority to regulate carbon pollution is an essential backstop to ensure that a carbon tax achieves its intended results over time. That is why we appreciate that this proposal is not discussing removing all of the EPA’s regulatory authority over greenhouse gases. We are hopeful this proposal will generate more discussion among conservative policymakers about the urgent need to address climate change. Hundreds of American companies and investors who are already committed to tackling the climate threat will surely need to be part of these conversations, too.

Commentary: Michigan Businesses Thank Lawmakers for Strengthening Clean Energy Standards

Last December, after two years of thoughtful debate, Michigan lawmakers passed a bipartisan energy package that will foster a clean energy future for businesses and ratepayers across the state. As the new legislative session gets underway, businesses continue the call for clean energy and thank lawmakers for their leadership last year. This week, a dozen businesses and trade associations sent a letter to Michigan lawmakers thanking them for increasing the state’s Renewable Portfolio Standard and strengthening the Energy Optimization Standard. “Strengthening Michigan’s Renewable Portfolio Standard ensures energy is generated in Michigan — encouraging new investments, innovation, and jobs here at home,” wrote the businesses, including Nestlé, JLL, Eileen Fisher, Worthen Industries, Veolia, and Brewery Vivant. Lawmakers will work to implement these improved standards in the coming months, creating additional economic development opportunities for the state. Last year’s energy package increases Michigan’s renewable energy standard from 10 percent in 2015 to 15 percent in 2021. It also strengthens the state’s commitment to energy waste reduction by removing artificial caps on efficiency investments – ultimately helping utilities do more to help customers and businesses save money on their electricity bills. As the legislature begins a new two-year session, lawmakers should heed the advice of the business community and protect the improved standards. Earlier this month, the Michigan Public Service Commission reported that electricity providers met or exceeded their 10 percent renewable energy target for 2015. The standards have been successful in holding utilities accountable and ensuring they invest in a diversified energy portfolio. Another benefit: for every dollar spent on energy waste reduction, customers are expected to see $4.35 in benefits. Conservative groups and businesses supported the energy package for one simple reason: energy standards ensure policy certainty for companies and investors. Renewable energy is now cost-competitive with coal. The Michigan Public Service Commission also reports that wind energy is now the cheapest form of new energygeneration. By strengthening Michigan’s clean energy standards, the state will be better prepared to compete in today’s global economy and attract future investment. For all of these reasons, we hope lawmakers will continue to stand up for clean energy standards, for businesses and ratepayers alike. Photo by Pat Kight / Creative Commons Read the post at Midwest Energy News