CERES, a prominent global advocate for actionable solutions toward a more sustainable future, has recently released its 2024 BICEP Network Policy Outlook. Before you picture bulging biceps from preacher curls, know that BICEP stands for Business for Innovative Climate and Energy Policy. Founded as a nonprofit in 1989, Ceres initiated this coalition in 2020 alongside the World Wildlife Fund (WWF) and World Resources Institute (WRI). The BICEP Network had a highly successful year, driving advocacy through the influence of leading corporations dedicated to enabling social change and impact. Ceres’ BICEP network plays a pivotal role by lobbying for clean energy causes. This is achieved by bridging the gap between corporations, investors, and other entities, such as trade groups, with key policymakers in the White House and Congressional committees. Last year, the group brought together 75 stakeholders for 60 meetings with officials from the White House and Congressional committees. The power of the BICEP Network can be understood by its sheer size of its network. It has 88 total members with $1.02 trillion of total revenue and 4.2 million employees globally as of December, 2023.
# Clean Tech Manufacturing
U.S. Bureau of Economic Analysis, Value Added by Industry: Manufacturing as a Percentage of GDP [VAPGDPMA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/VAPGDPMA, January 13, 2024. Data annual, not seasonally adjusted.
Notably, it played a critical role in the passage of the federal Inflation Reduction Act of 2022 and the bipartisan Infrastructure Investment and Jobs Act of 2021. The impact of their work is quantifiable, with new clean energy manufacturing projects worth $99 billion announced by various actors and entities in America. These projects are poised to create approximately 80,000 jobs. The U.S. is undergoing transformative changes in manufacturing, with around 130 new factories set to emerge under the proactive efforts of the BICEP network. These policies give a boost to increase the share of manufacturing sector as percentage of GDP in the US. By January of 2022 the share of manufacturing sector had decreased to 11 percent from that of 13 percent in 2006. The US is predominantly a service driven economy. In 2021, the services sector contributed around 77.6 percent to the GDP of the US. Initiatives that promote clean tech manufacturing could be a major enabler for uplifting the size of manufacturing sector within the American economy.
# Sustainable Infrastructure and Building
According to the report, the federal Inflation Reduction Act of 2022 and the bipartisan Infrastructure Investment and Jobs Act of 2021 have been game-changers in the U.S., encouraging states to adopt 100 percent clean power by 2040. The efforts of the BICEP Network have resulted in implementation of policies that lead to cleaner vehicle emissions and smart infrastructure investments. However, Ceres’ role goes beyond policy guidance and advocacy. Ceres manages and leads a partnership called The Corporate Electric Vehicle Alliance, championing America’s transition to electric vehicles for both passenger and commercial models. The actions taken vary, from the adoption of advanced clean car 2 and clean truck rules to supporting state deployment of federal grants in the transportation sector. The versatility of the roles played by Ceres and the BICEP Network is catalyzing a transformative change in the clean energy landscape within America
Georgia In partnership with Ceres BICEP Network members Microsoft and HASI, and supported by Inflation Reduction Act, global solar manufacturer QCells is building a $2.5 billion factory that will employ nearly 2,000 people. Ceres 2024 Policy Outlook
How can clean buildings and industry be far behind? Sustainable infrastructure like America’s first higher speed intercity rail Brightline is leading the way through public private partnerships. Operating presently between Miami and West Palm Beach and being extended to Orlando, the 125+ mph electric powered train is projected to generate over 10,000 jobs and billions in economic activity while lowering emissions. Both sustainable infrastructure and building are high growth areas especially for emerging markets. Advanced countries have roughly 80 percent urbanization, and as developing countries advance, their urbanization rates will only increase further. This leads to an amazing opportunity to build sustainable infrastructure both for commercial and residential buildings, apart from public goods like ports, highways etc. To learn more about public and private goods, enroll in the Microeconomics online course on The middle Road. This course is currently part of the subscription package. The importance of infrastructure cannot be understated. BlackRock, the largest money manager globally with over $9.4 trillion as of Q2, 2023 in assets, is acquiring infrastructure-focused Global Infrastructure Partners in a $12.5 billion cash and stock deal. BlackRock’s CEO Larry Fink stated in an interview with CNBC that “the future of private markets will be infrastructure.” He noted that most of BlackRock’s clients are retirement funds needing longer-duration, inflation-protected assets with attractive yields. Infrastructure fits that profile perfectly as an alternative asset class. Additionally, as Fink correctly observed, many governments face budget deficits and will need private capital to fund long-duration infrastructure projects. This could spur public-private partnerships, with private investments driving economic infrastructure development typically financed through government spending. Digitalization, decarbonization and energy independence are huge cash outflows and governments would need private capital to fund such colossal projects said Fink.
Since most of these projects are public goods, they are driven by government purchases. Private capital is expected to drive out government purchases and this would further increase ethe share of private markets as percentage of GDP going forward. There concepts are covered by The middle Road under the online course on Macroeconomics. Register for the free Macroeconomics online course to learn more concepts like multipliers that define global macroeconomics.
In the US, buildings contribute 30 percent of the nation’s emissions – presenting a major opportunity. Although decarbonizing this sector poses challenges, the US is blessed with abundant natural resources and space to construct new sustainable infrastructure. The Inflation Reduction Act facilitates efficient programs and rebates, enabling more active collaboration between state and federal levels. In 2024, Ceres will play an active role as businesses promote effective capital deployment through proactive, inventive policies. For example, one key priority is supporting the Better Buildings Act to mandate energy-efficient design standards for new construction in Massachusetts and beyond. The other is to support legislations that better building standards in Minnesota.
Minnesota gained popularity as the backdrop for the critically acclaimed movie Fargo. Directed by Joel and Ethan Coen of Big Lebowski and Raising Arizona fame, Fargo is a dark comedy/crime thriller shot across various iconic Minnesota locations. The movie won two Academy Awards – Best Actress (Frances McDormand) and Best Original Screenplay. Over the years, Fargo has gained a strong cult following and even inspired a TV series of the same name, though not directly related to the film. Today Minnesota is fast gaining traction as one of the startup states in the US. The middle Road recommends all the movies written herein.
The report highlights the active role played by Ceres and its partners in enforcing responsible business and investment policies. One critical area is opposing proposals to limit responsible business and investment policies across multiple states in the US. Recognizing the abundant natural resources in America, Ceres emphasizes that smart agriculture and the restoration and preservation of natural resources constitute the most crucial aspects of climate action for Congress. Agriculture, forestry, fishing, and hunting has a sizeable share in dollar as it contributes about 1.1 percent of the GDP (Q1, 2023).
Check out the read on Biodiversity from The middle Road.
Forests absorb approximately net 7.6 billion tonnes of carbon dioxide every year according to a study conducted by Nature Climate Change (reference World Resources Institute), which is more than the annual fossil fuel emissions from highly industrialized nations like the United Kingdom. According to the UN World Heritage Forest report, 190 million tonnes are absorbed from its world heritage forest sites. There are over 200 designated world heritage forest sites, spanning 69 million hectares globally. Every remaining intact forest area must be safeguarded – not only for climate change mitigation, but also to allow unique ecosystems and biodiversity to flourish, supporting indigenous communities that depend on them.
# Emission Reduction
The US and many states support a net zero emissions goal by 2050. The BICEP network wants to leverage the economic might of US trade policy to further this mission globally. Since pollution is a negative externality, one way of reducing carbon emissions is by imposing a tax. To learn more, check out the lesson on externalities in the Microeconomics online course on The middle Road. BICEP plans to impose a fee on foreign actors and entities if they are unable to match US emission standards, especially targeting carbon intensive polluters operating in America. Ceres BICEP Network is doing admirable work catalyzing social change through policy advocacy, lobbying, and bridging the gap between policymakers, global entities and actors in furthering its sustainable mission. In promoting progress domestically and abroad, both directly and indirectly via positive externalities, it is helping transform the landscape for environmental priorities and shared global development goals alike. We all should contribute value to this impactful network in our own ways – accelerating collaborative action for social and environmental good.
References
- Ceres BICEP Network 2024 Policy Outlook
- CNBC Television BlackRock CEO Larry Fink on GIP deal: The future in private markets will be infrastructure
- UN World Heritage Forest report
- Forests Absorb Twice As Much Carbon As They Emit Each Year- WRI
- Brightline High-Speed Rail Project, Florida, US http://www.railway-technology.com
