Does Wall Street understand Green, an interview with Peter Fusaro
Photo Credit: Nora McDevitt
Peter Fusaro is a long-time veteran to the world of green technology, alternative energy and financial markets. He has written over 700 published articles on topics that explain and explore how energy, the environment and capital need to work together to create change. His 2002 book entitled, What Went Wrong at Enron: Everyone's Guide to the Largest Bankruptcy in U.S. History, became a New York Times best seller. This year marks the 10th anniversary of his world-renowned annual conference called Wall Streen Green Summit which brings together the best and greatest minds together to talk about how markets can work to save the planet. I had a chance to speak with Fusaro - and find out if Wall Street gets that going green is good for the bottom line. Fusaro has always been a visionary with making things happen. In 1976, he was involved with the US EPA to get lead out of gasoline. In the mid-1980's, he was assisting in the creation of the first demand side management (energy efficiency) programs in New York and in 1997 he was consulting with the Toyota development team responsible for creating the Prius. There are few people that know more about climate change than he does, and probably no one that has written more books on the topic (he is at 16 books and counting).
Photo Credit: Urban/creative commons
Treehugger: You've been in the green sector for decades, how has wall street's understanding of green business and technology changed over, say, the last ten years?
Fusaro: There has been more interest but it was definitely damaged by the financial crisis. Interest began to regenerate in the middle of 2010. We are starting to see a bit of a solar power boom in small scale projects in places like New Jersey. Funds have moved in where bankers failed to tread. Banks don't look at too many small scale (2 to 20 MW) projects but fund managers are deploying capital. They want the environmental attributes and tax credits, and they want to create sustainable investment portfolios. Monetizing carbon credits are still several years out.
Photo Credit: david.nikonvscanon/creative commons
TH: Are there areas within the market that investment sees as more important than other areas?
PF: There are areas that aren't getting enough attention because federal legislation on climate change doesn't exist. The first is energy efficiency particularly with greening buildings. More than 950,000 existing structures are in New York, but only 40 of them are green. The era of cheap energy is ending as prices rise for fossil fuels. Both buildings and transportation have a big opportunity with efficiency. The second opportunity that I see is renewable energy, particularly true for solar. It is also is manifesting itself in combined heat and power, waste heat recovery, brownfields to greenfields, and small scale biomass. We are beginning to see nation wide deployment of small scale renewable technologies. Large scale utility projects can still get financing from the big banks but funds and regional banks are now interested in this sector which is continuing to ramp up.
TH: What does Wall Street still need to learn about sustainability and the future of green?
PF: It needs to hire bright, young people with the intellectual rigor and curiosity to get out of the investment banking stranglehold focusing on biofuels and large-scale wind and solar and start looking at other technologies within cleantech. The myopia of Wall Street is that the investment banks and investors follow the crowd. This is a more contrarian play in these times. Innovators are starting to bring in more technologies, though small, can have impacts in the aggregate.
Graphic Credit: Peter Fusaro
TH: This is the tenth year of the Wall Street Green Summit. Are you seeing more interest from the finance sector for each new conference?
PF: Until 2008 that was certainly true, but to be honest we are seeing more entrepreneurs and foreign nationals at this year's event as brokers and fund managers. Some are coming from Latin America to learn. Others are here to do deals. We still see more green hedge funds each year and try to profile these new alternative finance strategies.
TH: Where are green businesses and cleantech getting it wrong? Are they making the best case possible to get the attention of the general public and Wall Street?
PF: The dependency on federal government money is not a good investment strategy. I am very worried that government can pick technology winners better than the market. But the federal largesse for many technologies will be short lived. This is not a good thing. It would have made better sense for government to fund more incubators like NYSERDA has done in New York. They now have 70 startups in their incubators. Small companies can make a big difference. I sit on the board of eight different cleantech startups. That may make me a little biased but I see entrepreneurs having something extra to change the world for the better. Unfortunately, these small companies are barely noticed by the big boys of the capital world. I'd say that more research and training in this sector is needed. That said, young people are already green and will be gaining access to both economic and political power in the coming decades. That outcome is what I am focused on and that outcome is where we are heading. The only downside is that we are headed there slowly.
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