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Why tackling carbon emissions is good for the economy

Tim Brennan

As the treasurer and chief financial officer of the Unitarian Universalist Association (UUA), I have a long-term fiduciary responsibility to manage the assets of our religious denomination and congregations with particular attention to any potential risks in our portfolio. The UUA is an active shareowner of over 500 companies, and we have found that companies that are actively cutting emissions of carbon dioxide and other greenhouse gases and preparing for the uncertainties of climate change are companies that perform well too. That’s why we support policies that help the markets factor in the costs of pollution and the risks of a warming climate.

In July, the Minnesota Public Utilities Commission (PUC) made the prudent decision to require our public utility companies to factor in the cost of carbon pollution to our state. This is called the “social cost of carbon calculation.” Put simply, this is a dollar estimate of the future damages from droughts, sea level rise, heat waves and other climate impacts wrought by each ton of carbon dioxide released to the atmosphere. 

Now, with much greater scientific knowledge at hand, the PUC has wisely decided to revise the state’s social cost of carbon calculation to better reflect the true cost of climate change and ensure that utilities are continuing to invest in clean energy solutions that provide a number of financial benefits for society. This was a smart decision that will help the state mitigate the risks of climate change and account for the real costs of carbon pollution — including health impacts, drought and sea level rise.

On the cutting edge since ’93

Minnesota has been on the cutting edge of addressing climate change since 1993. Since then, lawmakers have required utilities and regulators to factor in the environmental and health costs of carbon pollution when making decisions on utility resources. As an organization with 24 Minnesota congregations, this law is important to us.

Prior to the PUC decision, Xcel Energy, Minnesota’s largest utility, said that a higher social cost of carbon would give utilities certainty as they plan for the future, and empower them to reduce carbon emissions. This is the kind of action the state and our country desperately need to continue the transition to a cleaner economy.

While this new cost is shy of the initial proposals supported by the Minnesota Pollution Control Agency, Minnesota Department of Commerce, Xcel Energy and environmental and renewable energy groups, it an important shift that better reflects the economic impact of carbon in our atmosphere.

Vital information for making decisions

Many in the business community believe that efficient allocation of capital requires an accurate accounting of all of the costs of production — including the costs of pollution. Companies such as Walmart, Tennant, and Microsoft factor the costs of carbon pollution and the future costs of climate change into their own decision-making processes — helping companies more accurately forecast and evaluate investments. When making investment decisions for the long term, this kind of information is vital.

Minnesota is a leader but not alone in this effort. Despite a lack of leadership at the federal level, lawmakers and regulators in several states — including New York, Illinois and Colorado — are using a social cost of carbon to measure and reduce carbon impacts from their power grids. We encourage other states to follow suit and adopt, update and strengthen their social cost of carbon measures.

Tim Brennan is the treasurer and chief financial officer of the Unitarian Universalist Association, a religious denomination and institutional investor with over $500 million in assets under management. Unitarian Universalist Association is a member of the Ceres Investor Network on Climate Risk and Sustainability. 


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Comments (4)

  1. Submitted by Ron Gotzman on 10/16/2017 - 01:21 pm.

    An alternative view….

    For an alternative viewpoint concerning the massive cost of green energy and the lack of results please google – “Energy Policy in Minnesota: the High Cost of Failure,”

    If you choose not to read an alternative view – just read the MinnPost article and feel good about yourself.

    • Submitted by Bill Willy on 10/17/2017 - 11:48 am.

      Yes yes yes

      Another fine contribution to the community from the Center of the American Experiment, the Minnesota think tank that is working hard every day pursuing the cause of prosperity via a “free and thriving Minnesota whose cultural and intellectual center of gravity is grounded in free enterprise, limited government, individual freedom, and other time-tested American virtues.”

      You could have just provided the link ( and saved everyone a step or two (their web site provides yet another link to a 24-page .pdf file entitled “Energy Policy in Minnesota: The High Cost of Failure”) but I guess that’s just another example of the way today’s conservative efficiency works.

      Anyway . . . Besides going on at length about what a miserable failure MN’s renewable energy push has been because MN has ONLY reduced it’s CO2 emissions by 6.6% in the past 12 years (they say), they explain the ways in which it has cost a ton of money and driven electric rates through the roof (for Minnesotans who don’t live where I do, I guess — my rates have been pretty steady and non-outrageous for the past couple of decades).

      And that’s not all! The report says this:

      “Based on industry cost estimates for building new generating capacity, ratepayers are committed to covering an estimated $10 billion for constructing these wind farms and billions more for the transmission needed to move this new power to market. On top of these upfront costs, ratepayers are on the hook for ongoing wind energy maintenance costs, property taxes, and replacement power needed when the wind doesn’t blow.”

      Ratepayers on the hook for “an estimated” $10 billion (?) for:

      A) Constructing wind farms;

      B) “billions more” for transmission (because no one can figure out how to tap into existing transmission lines?); and

      C) maintenance costs, property taxes (ouch!) and “replacement power” (which, of course, would cost a lot less if there were no wind turbines or solar panels because there would be no need to “replace” the energy they generate, right? It would just sort of be there — or something — I guess).

      But tell me, what gigantic and ongoing cost item is missing from that list?

      Power companies don’t invest in power generation for the fun of it. Correct me if I’m wrong, but I think they do it to “meet demand.” And what do power companies do when they need to do that? I’m not sure, but I think they:

      A) Construct additional power plants;

      B) Construct transmission systems (or tap into existing systems);

      C) Maintain those plants and transmission lines, pay property taxes and, instead of paying for “replacement power,” use their power plants to generate it.

      If ratepayers are committed to paying “an estimated $10 billion” for the construction of wind farms, what makes anyone think ratepayers wouldn’t be committed to paying an estimated $10 billion for the construction of additional fossil-fueled capacity? Or that they wouldn’t have to pay “billions more” for additional transmission lines, maintenance and “non-replacement” power as demand grows and expansion becomes necessary?

      But never mind that stuff . . . Basic point is it doesn’t cost any more to build or maintain wind farms than it does to build and maintain new fossil fuel plants, so items A, B and C on that list are probably close to a wash (whatever the actual and respective upfront costs are).

      Which brings us back to my question: What gigantic and ongoing cost item is missing from that renewable energy list?

      Figured it out yet? . . . If not, here’s a hint:

      D) FUEL

      I don’t know where you get your electricity, but the place I get mine from owns the biggest coal-fired power plant in North Dakota and, last I heard, it takes one (100 car) trainload of coal per day to keep it running.

      How much do you think a trainload of coal costs? Do a quick search on that and multiply what you find out by 365 and see what the rough cost of item D) is for one year for just one (large) coal-fired plant.

      As you’ve probably figured out by now, there is no item D) on the renewable energy cost list . . . There’s construction, transmission, maintenance and miscellaneous (just like the fossil fuel list) but there isn’t any fuel cost.

      I mean, forget about reducing pollution and CO2 emissions and just focus on the money . . . Which is less expensive over time? A trainload of coal or pipeline full of natural gas per day, or an unlimited supply of wind, sunlight and moving water?

      Which strikes you as the more cost-effective or — dare I use the word? — conservative?

      And by the way, in case you’re interested in what people are doing in the real world (outside of think tanks like the Center of the American Experiment), you might want to click this link and see what the power company I get my electricity from is think tanking and doing with that largest coal plant in North Dakota:

      And, while you’re at it, you might get a kick out of yet another hair-brained approach some poultry farmers are taking to cut their energy cost in half . . . Wait ’til the Center of the American Experiment gets wind of THAT one! . . . (Can’t wait to read their scathing report that proves what a dumb idea and financial catastrophe for poultry farmers and consumers it really is):

      I’d love to sit here and keep doing this, but I’ve got to start calling around to make arrangements to get my emergency-backup whale oil tank refilled before winter . . . It gets harder to find at a decent price every year . . . Sad.

  2. Submitted by Nick Foreman on 10/16/2017 - 02:05 pm.

    Yeah Gotzman

    Invest instead in coal

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