The Need for State and Local Initiative

October 21, 2020

Print This Article Share it With Friends

by Russ Freeman (Biofuels Digest) ... The private sector can provide capital and expertise to:

(1) plan;

(2) finance;

(3) obtain regulatory approvals;

(4) mitigate and insure against risk; and then

(5) design, build and operate works necessary for accomplishing community goals.

Thus, with minimal investment and minimal risk, State and local governments can gain significant value through adoption of community goals and related policies which create investment opportunities for groups like pension funds. If properly executed, capture of such value can:

(1) provide an accelerated path to economic recovery; and

(2) transform ordinary citizens into stakeholders for whom their equity stake in the socio-economic system earns for them a sustainable basic income.

Why Local Leadership?

State and local governments are closest to citizens and are being urgently petitioned for help. However, business closure and loss of income seriously impact revenue, forcing them to seek federal help. Federal assistance comes with red tape and increasing federalism tied to conditions on fund availability. Feds also face a rapidly increasing budget deficit as well as polarization grid lock. Such a situation creates urgent need for independent state and local leadership.

What Can be Done?

Pursue a State supported local initiative based on the proven logic behind California’s Carbon Capture Initiative which generated $2.29 billion for the State economy while adding some 10,500 jobs in Fiscal Year 2019, with a cumulative contribution of $14.5 billion in economic upside over the life of the program. The author has also suggested capturing potential value from water by change from Western State “use or loose it” based rights to limited property-based, tradable rights.

...

As another example, the following section will consider repurposing municipal solid wastes into a carbon neutral feedstock. Waste repurposing could create value, address critical local needs, provide jobs, and reduce present budget outlays. This could also help address social unrest by making every citizen an equity stakeholder in the national economic engine.

Suggested Approach

Employ a Smart-Community formula:

(1) adopt a vision;

(2) transform the “vision” into a set of desired outcomes;

(3) use a request for information (RFI), followed by a request for proposal (RFP) to find and engage a private partner to lead pursuit of each outcome or set of related outcomes;

(4) work with the partner to develop an action plan with milestones, budget and schedule for outcome realization;

(5) upon joint adoption of the action plan, authorize the partner to proceed with implementation and

(6) utilize a change management protocol to jointly monitor progress as compared to expectations. Then plan and implement corrective action as necessary to keep the process on track toward intended outcomes.

...

Also note: The Chicago futures exchange recently began trading water futures contracts linked to water prices in California. Rostin Behnam, a Commissioner with the Commodity Futures Trading Commission, indicated that water and similar futures will become essential in helping businesses and investors manage increasingly dramatic risks of climate change.

Goals: Begin with a Community Vision translated into goals and action plans. Much emphasis has been on switching transportation fuels from fossil to recycled carbon due to the large impact on atmospheric carbon. However, as opposed to fixing historic systems, to meet future needs and gain ESG certification, this process needs to carefully consider what future transportation needs will be. For example: “Will virtual communications dimmish business travel?” “Will work from home diminish commuting?” “Will consumers rapidly adopt electric vehicles?” “Will shipping move through regional distribution centers, with goods flowing directly from them to consumers?” Another set of questions are those such as: “If water prices rise toward $1,000 per acre foot, will irrigated carbon-to-fuel feedstocks remain viable?” Planned initiatives need to consider such questions. Then, should hindsight demonstrate that we have guessed wrong on some of those answers, we must stand ready to adjust our plans and investments accordingly.

Technology: Demonstrated systems are available for repurposing various fractions of municipal solid wastes (MSW) into energy, building materials, food, and products including plastic, paint additives, filter material, fertilizer, soil additives and other valuable products. In major metropolitan areas, clusters of such processes could economically repurpose the entire waste stream. With total repurposing, landfills could also then be transformed into valuable commercial, industrial, or public-use sites with an upside in value and greater acceptability as a local asset.

Proponents of such repurposing technologies have demonstrated adequate returns for investment in accordance with ESG certification criteria as well as compliance with applicable regulatory requirements. The value of this concept is that it allows small-scale installations to be fitted to situations in which local supply meets proximate demand. This optimizes market value by minimizing transportation and distribution issues. READ MORE