September 7, 2017 Read More →

Moody’s: Markets Will Continue to Drive Electricity-Generation Shift Across U.S.

Moody’s Investors Services:

US greenhouse gas emissions will likely continue to decline, driven by trends in the economics of renewable energy and gas-fired power generation, as well as efforts by private and sub-national entities, such as states and cities, to step in to compensate for the lack of federal carbon regulations. Low gas prices and the presence of tax credits for renewable energy through 2020 for wind and 2022 for solar, along with coal plant shutdowns, will maintain the pace of decarbonization for the next 3-5 years.

“Looking ahead, state and local governments and private sector entities will continue to drive the growth of renewables,” says Swami Venkataraman, a senior vice president at Moody’s and the co-author of the report. “Several large corporations have 100% renewable energy goals and several states and cities have together pledged that they would help fulfill America’s Paris Agreement commitments.”

In the absence of a nationwide emissions trading scheme, a number of states have set up cap-and-trade programs, either as a collective, such as the Regional Greenhouse Gas Initiative which is made up largely of northeastern states, or individually, such as California (Aa3 stable).

Eight states, including large load centers such as California, New York (Aa1 stable) and Massachusetts (Aa1 stable), are moving toward legislating that renewables constitute 80-100% of supply by 2050. Some of these states, such as California, New York, Minnesota (Aa1 stable) and Connecticut (A1 stable), have an intermediate 50% target by 2030.

Investor and shareholder preferences for greater corporate focus on sustainability also supports the decarbonization trend. Over the past five years, assets managed under sustainable, responsible and impact investing (SRI) strategies have more than doubled to $8.7 trillion.

More: Moody’s: US exit from Paris Agreement would not stop decline in its carbon emissions

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