Bill Clinton: Business is the key to climate change

LAGUNA NIGUEL, Calif.--Absent having a vote in Congress, the best way for people to tackle climate change is to make clean energy cheap, said President Bill Clinton at a green business conference here on Wednesday.

Speaking at the Fortune Brainstorm Green event, Clinton said through the Clinton Climate Initiative philanthropy, he is involved in a number of projects which show how environmental awareness makes sense for business.

Successful sustainability efforts help provide the political leverage for passing climate change regulations in the U.S., and internationally, Clinton argued.

The House this week is having hearings on a energy and climate bill that could pass this year, but faces a less certain path in the Senate. Next year, international negotiations on climate change are set to resume in Copenhagen with the purpose of crafting a successor to the Kyoto Protocol.

"The most important thing you can do, unless you have a vote in the U.S. Congress or a seat at the table in the Copenhagen conference is to prove the transformation we are all committed to undertaking is or can be made good economics," Clinton said.

Clinton is involved in projects that touch health and the environment, such as investments in making building more energy efficient or getting energy from landfills. The Empire State Building, for example, earlier this month announced a $33 million energy-efficiency retrofit that will save the owners $4.5 million a year on electricity and pay back the initial investment in under eight years.

Doing this sort of working in developing countries would have a significant impact both on greenhouse gas emissions and on the global economy, he said.

"If I could do just one thing and had the money to do it, I'd do this, I'd do this energy work in countries at middle- and low-income level," Clinton said.

"I am convinced if we do this energy thing right, it will generate not only an enormous number of new jobs and economic prosperity for countries of every income level, it will cause people to re-imagine how they do everything and therefore, the funds will flow to health care and education," he said.

The financing challenge
Even with his confidence in green businesses, Clinton said the details of carbon regulations are still very important. The debate among staffers right now seems to be over how pollution permits will be allocated in a cap-and-trade system--either by giving them to large businesses or by auctioning them off.

His policy recommendations were in line with many of the proposals being discussed in Washington, including a national renewable energy mandate and construction of more transmission lines to move wind and solar energy to demand centers. Changing the federal auto fleet to plug-in electric and hybrid vehicles and mandating energy efficient lighting would help establish those industries.

He said if states resist "decoupling" regulations that give utilities an incentive to be energy efficient, the federal government should mandate it.

Apart from a climate change policy that puts a price on carbon emissions, the biggest barrier to wide adoption of existing green technologies is financing.

The C40 Cities project, working with the Clinton Climate Initiative, sought to secure money from banks for energy service companies to weatherize large numbers of buildings. The energy savings from these retrofits help deliver a return on investments but the economic crisis has derailed some of those projects.

Clinton argued that new financing models need to be developed for environmental projects. Investment banks secure 20- or 25-year financing for construction of coal power plants. Yet cities that want to tap the methane gases coming off landfills to make electricity don't have the same options, he said.

The initiative is involved in a number of projects, including methane-to-energy or smaller scale projects like one in India where people scavenge organic material to make compost fertilizer for farms.

"I'll make you a prediction. I think people in our business will spend more and more time on what to do about urban waste over the next five years because it's a terrific source of new energy and energy efficiency and advances against climate change. It's like so many of these things, it requires the cash up-front," he said.

In addition to solving global problems like climate change, environmental sustainability projects are powerful symbols, Clinton said. Places with lots of sun resources like Arizona and Nevada, which were hit hard by the real estate crisis, could be "virtually energy independent," but people need to see real examples before making bold moves.

"I think symbols are important. The evidence of success spurs people to take new risks and make new investments," he said.

Updated at 8:15 a.m. PDT to change references to the Clinton Climate Initiative rather than the Clinton Global Initiative.