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by Katia Dmitrieva and Emily Chasan (Bloomberg BusinessWeek) Investing in the environment is already a $12 trillion market. Now markets are just looking for guidance from Congress. — … But those worried about where the rest of the money will come from are forgetting one major, surprisingly enthusiastic player: Wall Street.
Investors are more than willing to put up the capital to fund GND goals—which include switching to 100 percent renewable or clean power in 10 years, building a nationwide energy grid, and renovating existing buildings for energy efficiency—provided they get clarity from Congress, says Jon Powers, president of financial technology company CleanCapital and former federal chief sustainability officer under President Obama. “The thing that holds up capital the most is uncertainty,” he says. “Once you have certainty in that policy, then that capital will know where to go.”
Sustainable investing is already a $12 trillion market in the U.S., according to the Forum for Sustainable and Responsible Investment; data from BloombergNEF show that global issuance of green bonds rose to $600 billion last year. While investment funds and big banks are anathema to Ocasio-Cortez, a Democratic Socialist who eschews corporate donations, they certainly are interested in how far she’s pushing the conversation on green initiatives.
“Wall Street would take this seriously,” says Stephen Liberatore, a managing director at asset manager Nuveen, who oversees $9 billion in fixed income tied to an environmental, social, and governance strategy. “There are more and more investors who are interested in having exposure to green projects and green debt.”
…
Government-corporate coordination on such a scale has worked before—during the original New Deal, but also during World War II, when Franklin D. Roosevelt created a national production board to direct factories into war-goods mode. “We’re imagining a lot of different funding methods,” including grants, direct loans, public-private partnerships, joint ventures, or creating new bond markets, says Robert Hockett, a Cornell Law School professor and senior policy adviser to Ocasio-Cortez. “As in the case of the original New Deal, we do envisage existing firms playing a really big role.”
…
During the Great Depression, the federal government created the Reconstruction Finance Corp., a government entity that doled out loans to companies and states to encourage investment and economic stability. The GND resolution proposes creating public banks along similar lines to give citizens part-ownership of infrastructure projects and investment returns.
Other funding avenues include public investment in green bonds and asset-backed securities, which are securitized leases tied to low- or no-carbon assets such as solar panels or loans made to landlords to finance building upgrades. The government already works closely with the asset-backed industry via Fannie Mae and Freddie Mac and at the state level with programs like the clean-energy loan-financing system, known as PACE.
…
Private-sector investment isn’t enough to address the threat of climate change, says Saikat Chakrabarti, Ocasio-Cortez’s chief of staff. “What we think we need to do additionally—and what’s not happening on the scale it needs to—is federal investment,” he says. “The private sector alone cannot solve the climate crisis.”
…
BOTTOM LINE – Wall Street is more than willing to put up the financing for a green overhaul. It’s just looking for guidance from Congress, which the Green New Deal is intended to provide. READ MORE
