Issue link: https://resources.tangoanalytics.com/i/1523348
Sustainability & Energy Management Simplified DECARBONIZATION IS CRITICAL TO INVESTORS If asset managers continue to follow trends in embedding climate risk into investment decision-making and do so with greater conviction following the clear signs of climate change, corporations would be wise to consider their potential liabilities from climate-related damages and have plans in place to reduce or adapt to those risks in response. ENERGY SAVINGS AND EFFICIENCY GAINS The payback period on green building investments and upgrades is shortening exponentially as the cost of new technologies is driven down by wide-scale adoption. Additionally, energy efficiency measures are proven to significantly lower utility bills and increase property values. AFFORDABILITY FACTOR Renewables generated a record 30% of global electricity in 2023, driven by growth in solar and wind. With record construction of solar and wind in 2023, a new era of falling fossil generation is imminent, with ever-cheaper solar dominating electricity markets purely because of market forces. 2023 was likely the pivot point, marking peak emissions in the power sector. The transition to cleaner energy is now solidified in unstoppable market forces and undoubtedly becoming a global cornerstone for affordable energy in all economic sectors. Companies adapting to the new realities of increasing energy demand and pricing with excess strain on the grid growing by the year may finally find themselves amenable to onsite or offsite renewable procurement in 2024. Sweeping government incentives like the Inflation Reduction Act will only further compound the financial viability of renewables for small to medium-sized enterprises in all states. ACCESS TO SUBSIDIES, GRANTS, AND TAX BENEFITS The Inflation Reduction Act passed in 2022, marks the single largest commitment of public dollars to address climate change. The IRA provided $369 billion in meaningful incentives for clean energy technologies such as wind, solar, storage, hydrogen, nuclear, carbon capture, and biofuels that will drive energy sector transformation and emissions reduction efforts. The act is set to provide unprecedented long-term viability for wind and solar PV projects through important provisions in the form of "uncapped" tax credits that include incentives for electric vehicles and zero-carbon electricity. Instead of a structure built on carbon trading and pricing, the IRA looks to leverage federal funding and tax policy to drive private sector clean energy investment.