The intersection between public finance and environmental sustainability is a complex and often challenging space. However, where there are challenges, there are also opportunities. Projects and initiatives that link together public finance and environmental sustainability can be found at any scale – at the organizational, local, regional, state, or national level – and in any environmental context; water, sewer, energy, land conservation, solid waste management, etc. Increased focus on environmental sustainability has led to dramatic transformations at all levels of private sector, institutional, and governmental operations that have important finance implications. Facilities are being built that use far less resources. Distributed renewable energy is becoming a viable alternative energy option. Private businesses, universities, local governments, and state governments are making investments that reduce the environmental impact of their operations.
New financial instruments, for example green bonds, are providing borrowers and investors with new choices. These developments often have significant financial implications related to who pays, how much they pay, and how they pay for essential services and products.
This September, the School of Government Environmental Finance Center is partnering with the Southern Municipal Finance Society (a chapter of the National Federation of Municipal Analysts) to host a Public Finance and Environmental Sustainability Conference at the UNC School of Government in Chapel Hill. This conference will bring together experts and key stakeholders to discuss current trends and the innovative strategies and new technologies that are emerging in this field, and it will feature panel discussions on the following topics:
Navigating the Impacts of EPA Consent Decrees
The US Environmental Protection Agency (EPA) often utilizes Consent Decrees to resolve litigation against a public utility when serious violations of the Clean Water Act (CWA) are at issue. Consent Decrees typically focus on the implementation of a capital spending program by a public utility with the goal of materially reducing or eliminating future CWA violations. Depending on the size of the utility, the costs of Consent Decrees can reach into the billions of dollars, and impact the credit quality of the utility. The conference will offer a panel to explore the impact of Consent Decrees from a standpoint of a Utility Credit Analyst, a Utility Department Head, and a Utility Regulatory Body.
The market for Green Bonds took off in 2014 with issuance of nearly $40 billion for the year – three times the amount issued in 2013 and an eightfold increase over 2012. This panel will provide an overview of the burgeoning Green / ESG space as it relates to the municipal market. The panelists will address many of the questions that are being raised in the sector including the benefits, the distinction between Green Bonds and other bonds more broadly suited to the Impact Investing label, and “Green Washing.”
Changing Market Perceptions of Utility Credits
Analysts from all segments of the industry are rethinking their approach to credit assessment of utility systems. Rating agencies have recently updated municipal environment enterprise methodologies and investors have revised their evaluations of the sector. In the wake of prominent municipal bankruptcies, which have caused a greater focus on federal Chapter 9 provisions, are municipal utility credits a safer investment have previously thought? What is the relationship to the parent government? Are new technologies, management styles, and sustainability efforts transforming the perception of utilities? This panel will provide varying opinions from a mix of municipal market participants.
The Political and Capital Costs of a Sustainable Water Supply
Viable water resources are essential to public health, and managing the supply and availability of water is a complex and costly endeavor for public utilities. Economic expansion, population growth, land use change, and shifting climate patterns strain water supply on a national scale. Supply solutions, however, are typically engineered at the local level, where competing fiscal, political, legal, and environmental priorities are prevalent and often difficult to navigate. This panel will explore the lessons learned from various water supply case studies in the southeastern U.S., including the dynamics of conflicting inter-jurisdictional interests, the price of more innovative solutions, and the role of regional and national governing bodies in the allocation of this critical natural resource.
Public Utility Systems ‘Walk the Tightrope’: Legislative Framework, Power Generation, and Utility Affordability
Public utility systems are constantly tasked with performing a balancing act. These systems must adhere to legislative mandates, all while attempting to maintain infrastructure and offer the public affordability rates. Panelists, who happen to be well-versed in this ‘balancing act’, will take a closer look at a few public power hot topics as the U.S. Environmental Protection Agency’s Clean Power Plan, distributed generation, and utility rate affordability.
To learn more and to register for the conference, please visit http://www.efc.sog.unc.edu/event/public-finance-and-environmental-sustainability-conference