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Index > Environment > United States of America > Boosting Investment in Renewable Energy Projects

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Halliburton Loophole

"Father of Fracking"
George Mitchell
concerns over environmental
impacts of fracking

History of Fracking
Only a new technology

USA Fracking Stories

A Texan tragedy

Gas injection may have triggered earthquakes in Texas

California Lags in Fracking Regulations

All In for California Water

Fracking in Michigan

Fracking in Michigan Potential Impact on Health, Environment, Economy

Hydraulic fracturing of Marcellus Shale

Methane Gas from Marcellus Shale Drilling

Marcellus Shale Gas Economics

Health impacts of Marcellus shale gas drilling

Pennsylvania Fracking

Fracking in Virginia

Lesson From Wyoming Fracking

Water Pollution from Fracking

Hydraulic Fracturing Poses Substantial Water Pollution Risks

Methane in drinking water wells

Abandoned gas wells leak

Natural Gas Leaks Discovered in Boston

Methane Leaks Under Streets of Boston

Methane leaks make fracking dirty

Fracking effects real estate values

Fracking stimulates earthquakes

Protecting Gas Pipelines From Earthquakes

Gas Pipeline Earthquake - Simulations

America's crumbling pipelines

Averting Pipeline Failures

Dangers to Underground Pipelines

Gas Pipelines Could Serve as Wireless Links

Government Action needed on a National Energy Policy

EPA Releases Update on Ongoing Hydraulic Fracturing Study

Solar Booster Shot for Natural Gas Power Plants

Natural Gas Pricing Reform to Facilitate Carbon Tax Policy

Investing in fracking

What Oil Prices Have in Store?

Methane Out, Carbon Dioxide In

Health impacts of Marcellus shale gas drilling

Professor Ingraffea

Anti-Fracking Billboard

Natural Gas Drilling

Threats to Biodiversity

Pronghorn Migration
hindered by gas development

Microbes in a Fracking Site

Protozoa May Hold Key to World Water Safety

Shale Gas Production

Research into the Fracking Controversy

Convert Methane Into Useful Chemicals

Methane Natural Gas Into Diesel

'Natural Gas' at the molecular level

Arctic Methane risks

Arctic Methane Seeps

Great Gas Hydrate Escape

Undersea Methane Seep Ecosystem

Methane in the Atmosphere of Early Earth

Methane Natural Gas Linked to Climate Change

Cutting Methane Pollutants Would Slow Sea Level Rise

California | Colorado | Dakota | Marcellus | Massachusetts | Michigan | New York |
Ohio | Pennsylvania | Texas | Utah | Virginia | Wyoming

Shale Gas


Natural Gas Transition to Renewables

Investors: Extend Oil, Gas, and Real Estate Benefits to Clean Energy to Unlock Investment

Passage of Master Limited Partnerships Parity Act and Updated Real Estate Tax Terms Would Boost Investment in Renewable Energy Projects, Investors Say

Jul 01, 2013 Less than a week after President Obama unveiled an ambitious climate change action plan, major U.S. investors are encouraging policymakers to extend benefits available to oil, gas and real estate projects to spur investment in renewable energy developments.

Specifically, investors are calling for the passage of the Master Limited Partnerships (MLP) Parity Act, introduced by Sen. Chris Coons (D-Del.), as well as tax code adjustments that would enable renewable energy projects to be classified as Real Estate Investment Trusts (REITs), an investment vehicle currently used to develop cell phone towers, billboards and many other projects.

Investors in Ceres’ Investor Network on Climate Risk (INCR) have released a new fact sheet that spells out the clean energy investment opportunity in MLPs and REITs and why members of the Network are calling for these changes.

“There is no apparent logic to the current exclusion of renewable energy companies from the ability to form publicly traded partnerships,” said Lowell Miller, Founder, President/CIO, Miller/Howard Investments Inc.

“A large part of the intent in permitting energy companies to become MLPs was to encourage the development of domestic energy resources and infrastructure.

To fail to include renewable energy is, in effect, to say that the government and its tax system wants to implicitly encourage carbon-based energy development and to discourage—or not encourage—renewable energy development.”

MLP and REIT parity for renewable energy would help to unlock a large source of capital for renewable energy developments.

U.S. pension funds manage more than $16 trillion in assets, roughly 75 percent of which they invest in stocks and bonds in the public capital markets.

Unfortunately, this asset allocation limits institutional investment opportunities in renewable power, as clean energy developers generate only a small fraction of their financing from the public markets.

Since MLPs and REITs trade like stocks in the public markets, institutional investors could use them to invest in clean energy projects while also maintaining their preferred asset allocations.

“Master Limited Partnerships and Real Estate Investment Trusts have for decades provided an effective vehicle to enable a wide range of investors to fund America’s infrastructure,” said Jack Ehnes, CEO, California State Teachers Retirement System (CalSTRS).

“We should diversify these tools to connect today’s investors to tomorrow’s renewable energy and energy efficiency infrastructure.”

“We’re looking for exposure to clean energy opportunities throughout our $2.9 billion portfolio. The ability to invest in clean energy infrastructure is particularly interesting.

However, like many investors, we invest through the capital markets and are thus not in a position to finance individual renewable energy and energy efficiency projects,” said Joe Keefe, President & CEO, Pax World Mutual Funds.

“Smart changes, like those proposed for Real Estate Investment Trusts and Master Limited Partnerships, could provide opportunities for investment by firms like Pax as well as individual investors.”

Current Internal Revenue Service rules are unclear on whether solar and wind power projects can qualify as REITs. Clarifying these rules to include renewable energy has gained bipartisan support, along with MLP reform, even in a radically divided Congress.

Late last year, a bipartisan group of 29 U.S. lawmakers sent a letter to the President calling for changes to both MLPs and REITs.

“The client demand for renewable energy is abundantly clear and the REIT structure is one that would enable exposure to a diverse set of these assets,” said Matt Patsky, CEO, Trillium Asset Management.

“For investors avoiding fossil fuels, solar REITs are particularly attractive, as the long-term nature of developer contracts and stable cash flows makes them a strong proxy for utility sector exposure."

“Common-sense policy fixes related to MLPs and REITs can help to get some institutional capital off the sidelines and into play, but it is important to note that these measures alone will not open the floodgates to renewable energy investment,” said Mindy Lubber, president of Ceres and director of INCR.

“The Production Tax Credit and Investment Tax Credit remain essential tools within the renewable energy industry. MLPs and REITs will provide complementary benefits as the industry matures, and most important, the proposed changes will help to level the playing field.”

The Investor Network on Climate Risk is a network of 100 institutional investors representing more than $11 trillion in assets committed to addressing the risks and seizing the opportunities resulting from climate change and other sustainability challenges.

Last month, 22 INCR members signed the Climate Declaration, asserting, “tackling climate change is one of America’s greatest economic opportunities of the 21st century.”

For more information on INCR, visit www.incr.com.

About Ceres

Ceres is an advocate for sustainability leadership. 

Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy.

Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $11 trillion. For more information, visit http://www.ceres.org.

 


 
 

 

 

 

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