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HomeMy WebLinkAboutCOUNCIL - COMPLETE AGENDA - 10/10/2017 - COMPLETE AGENDACity of Fort Collins Page 1 Wade Troxell, Mayor Council Information Center (CIC) Gerry Horak, District 6, Mayor Pro Tem City Hall West Bob Overbeck, District 1 300 LaPorte Avenue Ray Martinez, District 2 Fort Collins, Colorado Ken Summers, District 3 Kristin Stephens, District 4 Cablecast on FCTV Channel 14 Ross Cunniff, District 5 and Channel 881 on the Comcast cable system Carrie Daggett Darin Atteberry Delynn Coldiron City Attorney City Manager City Clerk The City of Fort Collins will make reasonable accommodations for access to City services, programs, and activities and will make special communication arrangements for persons with disabilities. Please call 221-6515 (V/TDD: Dial 711 for Relay Colorado) for assistance. City Council Work Session October 10, 2017 6:00 PM  CALL TO ORDER. 1. Business Engagement Action Plan. (staff: Jackie Kozak-Thiel, Josh Birks, SeonAh Kendall; 12 minute staff presentation; 45 minute discussion) The purpose of this item is to provide Council an update in the development and implementation of the Citywide Business Engagement Action Plan. 2. Climate Economy Action Plan Update. (staff: Jackie Kozak-Thiel, Josh Birks, Sean Carpenter; 15 minute staff presentation; 60 minute discussion) The purpose of this item is to provide City Council with an update on the Climate Economy Action Plan and overview steps for the implementation of this plan. 3. Fort Collins and Organized Energy Markets. (staff: Tim McCullough; 10 minute staff presentation; 45 minute discussion) The purpose of this item is to provide an update to Council on the potential of Platte River Power Authority (Platte River) entering an organized energy market. Platte River is actively participating with a group of six other regional utilities, the Mountain West Transmission Group, examining the benefits and risks of forming an organized market in a region that would cover most of Colorado and portions of Arizona, New Mexico, Wyoming, and South Dakota. This potential market would include a common regional transmission tariff and market rules that would facilitate buying and selling electricity across the region. City of Fort Collins Page 2  OTHER BUSINESS.  ADJOURNMENT. DATE: STAFF: October 10, 2017 SeonAh Kendall, Economic Health Manager Josh Birks, Economic Health Director Jackie Kozak-Thiel, Chief Sustainability Officer WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Business Engagement Action Plan. EXECUTIVE SUMMARY The purpose of this item is to provide Council an update in the development and implementation of the Citywide Business Engagement Action Plan. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Are we addressing the concerns that Council is hearing from the business community? 2. Does the Business Engagement Action Plan support and complement Council priorities? BACKGROUND / DISCUSSION The Economic Health Office (EHO) was formed in 2009 and joined the newly created Sustainability Service Area (SSA) in 2012 to reflect the triple bottom line approach. The City’s economic health vision is “a healthy, sustainable economy reflecting community values.” The City is intentional in using the term “economic health” vs “economic development” in keeping with the community’s value of a sustainable economy that looks to long-term vitality versus the short-term or individualized gain. Most of the local economy’s stabilization and growth come from the retention of existing businesses. Business Case for Action Why does the City need a Citywide business engagement action plan? The City has two primary customer groups: residents and businesses. The City has always had a healthy relationship with the business community; however, as part of the continuous improvement process staff has heard from external and internal groups and identified several opportunities for improvement (OFI). OFIs identified include a need for a systematic approach to listen, assess and engage with business customers and evaluating and responding to information collected to 1 Packet Pg. 3 October 10, 2017 Page 2 improve services. NOTE: Systematic in this context means consistency of approach as well as organizational continuity. Objectives of the Business Engagement Action Plan 1. Improved customer satisfaction with business customers 2. Enhanced relationship between the City and the Business community 3. Increased efficiency and utilization of City resources and staff through a coordinated Citywide business engagement strategy. Business Engagement Action Plan The Citywide Business Engagement Action Plan is a four-stage process. (Attachment 1) Every service area within the City organization connects with the business customer. Phase One - Analysis (May 2017-present) Before developing an engagement strategy, internal analysis must be completed to create a baseline understanding of business engagement within the organization. Phase 1 involves a current state assessment of the organization’s historic and present engagement with businesses. (Attachment 2) The current state assessment aids in identifying issues and gaps before the development of strategy. The Business Engagement Action Plan is not an end in itself, but a means to continuous process improvement and continuous dialogue with our business customer. The journey to economic health is best done in the company of diverse stakeholders with various backgrounds and experiences. The Plan team has convened an industry stakeholder group with a goal of sharing and exchanging information (i.e., be a liaison to the business community and the City). Deliverables include assisting staff in identifying key metrics and to assist in the development of a business engagement spectrum (similar to the citizen engagement spectrum).The two-way communication with the industry stakeholder group will inform and assist in the development of the business engagement spectrum. (Attachment 5) Industry stakeholder group will carry on throughout all four phases of the business engagement action plan. Additionally, the Economic Advisory Commission will be engaged throughout all phases of the plan. NEXT STEPS Remaining Phases and Timeline: Phase Two - Design (October 2017-February 2018)  Develop business engagement strategy  Define metrics o Short-term: utilization of industry stakeholder group for real-time feedback; launch of the National Business Survey to gauge satisfaction and create a baseline for data collection; Business Appreciation Breakfast Feedback Form (Attachment 3) o Long-term: National Business Survey will create a baseline that allows benchmarking with other communities and year-to-year comparison; Small Business Survey to determine the needs specific to small businesses; Performance measurements is a combination of collecting the right data, and understanding how the variables interact to provide insight.  Rollout Citywide strategy for engaging business customer Phase Three - Implementation (March 2018-August 2018)  Implement strategies that can be offered within existing resources  Submit 2019-2020 Budget for Outcomes offers for strategies that require additional financial resources  Develop period status reporting 1 Packet Pg. 4 October 10, 2017 Page 3 Phase Four - Review and Modify  Regular review of approach  Modify and improve, as identified The four-phase approach allows the City to connect with businesses to understand the “voice of the customer”, measure customer satisfaction to recognize current and anticipated business issues/challenges to enhance and adjust service delivery. ATTACHMENTS 1. Business Engagement Public Engagement Plan (PDF) 2. Current State Assessment-Phase 1 (PDF) 3. Business Appreciation Breakfast Questionnaire Recap 2017 (PDF) 4. Biz Engagment Charter (PDF) 5. Project Plan Industry Action Group (PDF) 6. Powerpoint presentation (PDF) 1 Packet Pg. 5 PUBLIC ENGAGEMENT SUMMARY PROJECT TITLE: Business Engagement Action Plan OVERALL PUBLIC INVOLVEMENT LEVEL: Engage BOTTOM LINE QUESTION: How can the City improve its communications strategy to more effectively and consistently engage with business customers so they are satisfied with the City and our services? Key Messages:  Our business customers deserve the same level of engagement opportunities we give our residents.  We want to partner with stakeholders to develop alternatives and identify solutions.  We want lines of communication with businesses to be open and transparent.  We must be consistent in our relationship with businesses and how we approach them.  We must finesse our relationships with the business customer because of the varying needs of businesses.  Our mission includes a commitment to continuous improvement, which includes our relationships with stakeholders. KEY STAKEHOLDERS: External Employers Chamber of Commerce Board of Realtors Downtown Business Association SFCBA NFCBA Larimer SBDC Innosphere Visit Fort Collins CSU Economic Advisory Council Internal City Council Utilities, PDT, Finance Police Services, Poudre Fire DDA TIMELINE: Phase 1: Analysis Timeframe: May 2017 - present  Conduct assessment of current practices ATTACHMENT 1 1.1 Packet Pg. 6 Attachment: Business Engagement Public Engagement Plan (5989 : Business Engagement Action Plan)  Identify issues and gaps Tools and Techniques:  Internal municipal department listening sessions  City employee questionnaire  Create shared glossary (small business vs. primary employer, etc.)  Enabled businesses reporting on Access Fort Collins self-select vs. residents PHASE 2: Design strategy Timeframe: October 2017 – February 2018 Tools and Techniques:  Create external stakeholder team  Develop internal citywide strategy for engaging the business customer  Create annual survey for businesses similar to citizen survey  Define metrics PHASE 3: Implementation Timeframe: March 2018 – August 2018 Potential Tools and Techniques:  Kitchen cabinets  Host Meetups  Industry roundtables  Small business listening sessions with EHO, Utilities, Sales tax, etc.  Business tours for entrepreneurs  Sponsorships  CCTW NOCO events  Women and minority owned listening sessions 1.1 Packet Pg. 7 Attachment: Business Engagement Public Engagement Plan (5989 : Business Engagement Action Plan) BUSINESS ENGAGEMENT ACTION PLAN (BEAP) CURRENT STATE ASSESSMENT | Phase 1 Introduction PURPOSE The purpose of this report is to present the findings of the listening sessions, surveys, and research conducted to make recommendations that will help in the creation of a comprehensive Business Engagement Action Plan (BEAP) for the City of Fort Collins. Many departments work with our local business community and may see some overlap in contacts, outreach, and communication which needs a more streamlined approach within our organization. Ultimately, this report will help to:  Lay out a comprehensive Business Engagement Plan  Define a universal segmentation analysis for our business stakeholders  Determine the appropriate level of business engagement (generally) for each segmentation  Identify engagement methods with businesses  Declare roles and responsibilities of each department BACKGROUND The City of Fort Collins and Council have determined that there is a need for a more consistent and measurable system to track its interaction and satisfaction within the business community. The Baldrige process has identified a significant discrepancy between the understanding of customer needs and level of service provided to the City’s business customers compared to its other major customer – residents or citizens. The City needs an effective way of gathering information from its business customers and evaluating and responding to that information. The proposed business engagement action plan will address two major outcomes: 1) Business satisfaction and 2) Improved economic health in the community. METHODS Listening Sessions The departmental listening sessions were chosen based on a vote from the Business Engagement Action Plan Team (BEAP). The BEAP prioritized seven departments as having high business engagement. Departments Involved 1. City Manager’s Office (CMO) 2. Community Development and Neighborhood Services (CDNS) 3. Police Services 4. Poudre Fire Authority (PFA) 5. Sales Tax 6. Utilities – Customer Accounts 7. Utilities - Community Engagement Current Engagement Methods  How are you currently engaging with your customers?  How does your team track customer communication?  How do you share this information with your team? Roles and Responsibilities  Who does what?  When does interaction need to be moved up to the executive/director level? Metrics  What are you measuring and tracking?  How do you determine customer satisfaction? Follow-up  How does your team follow-up when needed and how do you track follow- up?  Is there a time limit requirement on when follow-up must happen? Employee Questionnaire Departments Represented 1. Planning 2. Patrol/Fire 3. Utilities Customer Service 4. City Clerk’s Office 5. Finance, Purchasing, Sales Tax 6. CDNS 7. Sustainability 8. CPIO 9. Cultural Services Questions  How often do you engage with businesses?  How satisfied are you with your overall level of engagement with businesses?  In your opinion, what would help you or your department be more effective when engaging with businesses?  What is your biggest obstacle when it comes to business engagement?  What is your biggest win when it comes to business engagement?  How do you define successful business engagement?  How do you resolve an issue with a business?  How do you provide feedback or intelligence from a business interaction to your colleagues?  What is one thing you think the business community wishes your department did/provide? Case Studies Projects Reviewed  Anheuser Busch Expansion  Downtown Plan  Capital Expansion Fees DEPARTMENT & STAFF RESPONSES Employee Questionnaire Employee questionnaire responses: 41 Responses How satisfied are you with your overall l level of engagement with businesses? Satisfaction level with engagement (Scale of 1-5, 5 being the most satisfied)  5 – 5%  4 – 45%  3 – 42.5%  2 – 7.5%  1 – 0% How often do you engage with businesses? Frequency of business engagement  Hourly - 19.5%  Daily - 39%  Weekly - 22%  Monthly - 19.5% Long questionnaire responses  Large demand for a city-wide Customer Relationship Management (CRM) system  Requests for more coordination in communication between departments to negate duplicated business outreach  A desire to increase consistency, improved messaging in how to start a business, transparency in development review, more communication between City staff and business community Case Studies WHAT WORKED  Projects are most successful when public/community engagement is launched well in advance  Strong partner relationships outside of the organization provide key stakeholders to future projects  High levels of public engagement on the front-end can allow for buy-in from Council  Meeting the businesses where they are. Engagement and conversations most often happened at their business.  Phase summaries helped formalize the message, show progress to the community and provided elegance to each document. These also helped keep the momentum moving. 1.2 Packet Pg. 10 Attachment: Current State Assessment-Phase 1 (5989 : Business Engagement Action Plan) WHAT DIDN’T  Hired consultants may not perform their scope to the level of expectations the City demands or have the full skill- set LESSONS LEARNED  Conduct project debriefs with team upon completion  Roles and expectations should be established on the front end of all projects with all levels of the team, both internal and external OUR OBSERVATIONS 1. The introduction of “Baldrige” sets a negative tone and connotation among some of the departments 2. Lack a centralized location for engagement notes and data 3. No common language or consistent segmentation guidelines 4. Departments don’t realize how often they currently engage with businesses. Business interaction or segmentation is not top of mind. 5. Customer service and relationships are built and maintained differently across departments 6. Need a common tool to manage business “touches” 7. Large demand for a city-wide Customer Relationship Management (CRM) system 8. Requests for more coordination in communication 9. A desire to increase consistency, improved communication, prevent duplication 10. We do not have raw data to support our current or past engagement efforts PRELIMINARY RECOMMENDATIONS  “Segmentation” may be jargon within department conversations. Keep the language simple and refer to segmentation as “groups”.  Customer service training and CRM should be prioritized into the Lean training to avoid duplication and create efficiencies across the organization.  Messaging can be tweaked when introducing business engagement to the departments to not put such a focus on Baldrige.  Develop a Code of Conduct or Rules of Engagement with the purpose of presenting to groups and associations to improve dialogue and reduce personal attacks.  Produce a Business Engagement Spectrum to compliment the Public organizations and employers to offer this benefit.  Institute an educational component between Sales Tax and the SBDC to support businesses when they are having trouble paying their sales and use tax  Convene an ongoing Business Engagement team (outside of the BEAP/stem of the BEAP) from various departments to share information, ideas, provide more recommendations. For example, use this as a way to highlight small business visibility, share site visit stories, share strategies, etc.  Add an option in ACCESS Fort Collins for users to identify as a citizen or business, giving us more data to explore what people are asking/inquiring about.  Utilize the Speakers Bureau form on the fcgov.com website to interact with business requests when it goes live  Explore the possibility of adding an Engagement liaison much like the CSU liaison or Special Events position  Explore the possibility of adding an EHO position that would be housed in Planning. APPENDIX  Listening Session Responses  Stakeholder Map  Business Engagement Glossary of Terms  Business Engagement SWOT Analysis  Business Community Participants (?Name?)  Baldrige community winners snapshots – Irving, Texas and Coral Springs, Florida 1.2 Packet Pg. 12 Attachment: Current State Assessment-Phase 1 (5989 : Business Engagement Action Plan) Business Appreciation Breakfast 2017 Survey Results How satisfied were you with the following aspects of the event? Highly Satisfied Satisfied Neutral Dissastisfied Highly Dissatisfied Responses Location 34 10 3 0 0 47 72.30% 21.30% 6.40% 0.00% 0.00% Breakfast 22 17 8 2 1 50 44.00% 34.00% 16.00% 4.00% 2.00% Business Panel 36 10 3 1 0 50 72.00% 20.00% 6.00% 2.00% 0.00% Event Flow 30 13 4 3 0 50 60.00% 26.00% 8.00% 6.00% 0.00% Keynote 43 5 2 0 0 50 86.00% 10.00% 4.00% 0.00% 0.00% Total Responses 50 Overall, the event Percent Responses Exceed my expectations 73.5 36 Met my expectations 2635 13 Total Responses 49 ATTACHMENT 3 1.3 Packet Pg. 13 Attachment: Business Appreciation Breakfast Questionnaire Recap 2017 (5989 : Business Engagement Would you recommend this event to colleagues? Percent Responses Yes 96.00% 48 No 2.00% 1 Other write ‐in 2.00% 1 Total Responses 50 What are you grateful for in terms of business? A city that maintains contact and positively reinforces the value of business to the success of a community A vibrant, vital and involved community A collaborative community. City of FOCO, Larimer County Workforce, United Way, the great citizens of NOCO! Community of support and caring leaders! That business in Fort Collins considers gratitude an important theme. The support the City offices provide businesses in areas such as ClimateWise What other comments do you have? Hickenlooper is a fantastic speaker. I have been to all 5 Business Breakfasts ‐ and this was the very best one! Really glad to see a local panel with a diverse business background. T he event was flawless. Congrats to the team that planned and executed it! While it's a great event ‐ there isn't really time/space to connect with other business people at the event I'm grateful for an innovative and supportive community that values investing in the community in tangible ways. The number of small and Independent (as opposed to large franchises or national chain) businesses in Fort Collins, the spirit of enterprise and entrepreneurship here, and the commitment to collaboration among businesses, the City, and the University. Great event! Continue to focus on a healthy economy and publicly celebrate the importance of our local business community. I was inspired by the panel and the vision for growth from Hickenlooper. Thank you for putting on such a meaningful event. 1.3 Packet Pg. 14 Attachment: Business Appreciation Breakfast Questionnaire Recap 2017 (5989 : Business Engagement Business Retention & Expansion 2017 Survey Results from BAB Survey Is your company growth (head count or sales): Percent Responses Up 81.5% 22 Netural 18.5% 5 Down 0.0% 0 Total Responses 27 Are your feelings about the Northern Colorado economy: Percent Responses Up 85.2% 23 Netural 15.8% 4 Down 0.0% 0 Total Responses 27 Would you consider relocating outside of Northern Colorado: Percent Responses Yes 11.1% 3 No 70.4% 19 Maybe 18.5% 5 Total Responses 27 1.3 Packet Pg. 15 Attachment: Business Appreciation Breakfast Questionnaire Recap 2017 (5989 : Business Engagement What is the greatest opportunity facing your business? A vibrant downtown for my development business. Growth and changing workforce Responsible, local growth and development T he educated engaged workforce in NOCO is a definite plus. What is the greatest threat facing your business? Construction costs and land costs are going up more than rents. Is your company any of the following? Percent Responses Women‐owned 29.6% 8 T he National builders coming here hurt the smaller custom builders. T hey are buying up all the ground and there does not appear to be any developers able to develop ground for the local custom builders A growing educated population which is constantly pushing to make this a more progressive and inclusive community. A significant economic downturn. Fort Collins cost of living Shifting public perceptions Complacency (particularly if elected officials take business/economy for granted), cost of housing Irresponsible growth and development. Uninformed opposition, restriction and unnecessary and/or unfair fees/costs. Not enough skilled employees who can afford to live in the area and get around via alternative transportation. Overwhelmed with the amount of high‐quality people and difficult to know which ones to say, "No" to. 1.3 Packet Pg. 16 Attachment: Business Appreciation Breakfast Questionnaire Recap 2017 (5989 : Business Engagement Minority‐owned 3.7% 1 Employee‐owned 14.8% 4 None 63.0% 17 Total Responses 30 1.3 Packet Pg. 17 Attachment: Business Appreciation Breakfast Questionnaire Recap 2017 (5989 : Business Engagement Economic Health Office Project Plan Page 1 10/3/2017 Project Team Charter Enterprise-wide Business Engagement Action Plan Project Team Name: Enterprise-wide Business Engagement Action Plan Strategic Goal: Economic Health & High Performing Government Project Lead: Josh Birks Date: March 24, 2017 Project Statement: The City of Fort Collins has defined two primary customer groups through its Baldridge application process, citizens and businesses. Through the same process, the 2016 Baldridge Feedback Report described a number of Opportunities for Improvement (OFI) specifically related to the City’s interaction and understanding of the business customer. These OFIs include: 1. City does not have a systematic approach to listen to businesses or obtain actionable feedback from them (Category 3.1 – Voice of Customer); 2. City does not have a systematic process for assessing the satisfaction, dissatisfaction, and engagement of its business customers (Category 3.1 – Voice of Customer); 3. City does not have a systematic approach to determine its business customer segments to emphasize and pursue for business growth (Category 3.2 – Customer Engagement); and 4. The City provides no similar or alternative satisfaction results data for business customers’ to the Citizen Survey (Category 7.2 – Customer-Focused Results). NOTE: Systematic in this context means consistency of approach as well as organizational continuity. Business Case: The Baldridge process has identified a discrepancy between the understanding of customer need and level of service provided to the City’s business customers compared to its other major customer – residents or citizens. The City needs an effective way of gathering information from its business customers and evaluating and responding to that information. The proposed business engagement action plan will address two major outcomes: 1. Business Satisfaction – with specific services, the City in general, and the community – the same measure used to determine the ultimate success of the City’s services at addressing the resident/citizen customer; and 2. City Product Offering Refinement – with a focus on business customer need and a goal of improving individual and collective business success in our community – by increasing the efficiency and effectiveness of existing or new City Programs (services and incentives) with the long-term goal of improving economic health in the community. The action plan is further linked to the City’s strategic plan through a number of Strategic Objectives (SO), including but not limited to SO 3.2, 3.4, 3.6, 4.5, 4.6, 4.7, 7.1, 7.5, & 7.6. ATTACHMENT 4 1.4 Packet Pg. 18 Attachment: Biz Engagment Charter (5989 : Business Engagement Action Plan) Economic Health Office Project Plan Page 2 10/3/2017 Measureable Objectives 1. Improved customer satisfaction with business customers 2. Increased efficiency and utilization of business oriented City services 3. Increased return on City efforts to support business retention, expansion, incubation and attraction Other objectives 1. Understand the voice of the business customer: a. Measure business customer satisfaction (in general and for specific City services); b. Understanding of current/anticipated business issues (market conditions, opportunities, regulatory barriers, etc.) that effect the community’s economic health; 2. Identify the types of services to provide and how to provide them effectively to meet business customer needs with the long-term goal of improving economic health in the community; and 3. Understand business customer segments and clarify methods of engagement. Scope - Major Deliverables Engagement System 1. Revised Baldridge Application – likely for 2018 application and 2017 follow-up 2. Current state assessment to include business segmentation, business customer engagement methods, and product offerings 3. Improved coordination across departments in terms of engaging with business customers, including: a. Developing a system for tracking and response/follow-up of business issues; and b. Training for key staff engaging with businesses based on norms established during this plan, or as part of the functional area’s operational processes Business Feedback & Intelligence 1. Centralization of business feedback and intelligence a. Through implementation of a Customer Relationship Management system (linked to the Utilities on-going efforts to identify and pilot such a tool); and b. Development of a “Citizen Survey” style Survey of Business Climate & Satisfaction c. Clear definition of “trigger points” within feedback mechanism to alert a specific department or division to a potential opportunity to engage or intervene to help a business (e.g., falling behind on sales tax may trigger non-payment of utility bills and present an opportunity for EHO to meet with the business and share available resources) 2. Optimized Program Offerings and Processes to Businesses a. Evaluation of which services to provide and how to deliver them well 1.4 Packet Pg. 19 Attachment: Biz Engagment Charter (5989 : Business Engagement Action Plan) Economic Health Office Project Plan Page 3 10/3/2017 Members and Key Stakeholders (by department): EXECUTIVE SPONSOR Jackie Kozak-Thiel PROJECT TEAM (Internal Working Group) Josh Birks (EHO - Project Director) Blaine (Finance – Sales Tax) SeonAh Kendal (EHO - Project Manager) Emily Wilmsen/David Young (CPIO) Shannon Hein (EHO - Key Business Analyst) Tyler Marr (CMO) Tom Leeson (PDT) Lucas Mouttet (Utilities) TBD (Police Department) TBD (Poudre Fire Authority) ADVISORY TEAM (External Working Group) - TBD KEY INTERNAL STAKEHOLDERS (Regular Progress Updates) * Utilities PDT Kevin Gertig Laurie Kadrich Lisa Rosintoski IES John Phelan Kelly DiMartino Travis Paige Terri Runyan Dan Coldiron Finance Sustainability Services Mike Beckstead Lucinda Smith Beth Sowder CMO Police Services Jeff Mihelich Kevin Cronin *NOTE: The work plan will indicate when and how the Advisory Team will engage in the project, as well as general milestones and check-in points for reporting out to Key Stakeholders. It is anticipated that the Advisory Team will function very similarly to the broadband citizen group. Time Frames/Major Milestones Identified timeline is April 2017 through 4th quarter 2017. Major Milestones are:  Kick-off Meeting (Scheduled for early May)  Develop Work Plan (In Progress)  Current State Assessment Summary (In Progress)  Best Practices and Peer City Learning  Baldridge Application Updates  Identification of Process Improvements & New Systems, to include but not limited to: o CRM; and o Customer Service Training  Implementation NOTE: After each milestone there will be a review with core team and Executive Sponsor for continuation to next milestone. High Level Risks:  Limited availability of Project Team  No funding currently identified for specific implementation steps  Buy-in organization-wide on the importance of addressing this customer base  Sense of urgency 1.4 Packet Pg. 20 Attachment: Biz Engagment Charter (5989 : Business Engagement Action Plan) Economic Health Office Project Plan Page 4 10/3/2017 Constraints:  Need to continue to provide high level of service while processes are changed and improved  Need to work within existing timelines of BFO, Baldridge application, Strategic Planning, etc.  Wide array of services provided to business customer with potentially varying approaches to engagement  Multiple competing organization wide objectives all demanding time and attention from staff Assets/Opportunities:  Existing EHO full-time vacant position re-tooled to focus on business engagement  Significant external partner interest and willingness to contribute  Senior leadership alignment around the need to act Project Manager Assigned and Authority Level SeonAh Kendall shall be the project manager and has the authority to request team members and will work with Management to secure any necessary resources to complete the project. Cost/Budget/Financial Assumptions: Key cost identification at this time is labor of project team participation and input from key stakeholders. Project Sponsor Authorization: _________________________________________ Josh Birks, Economic Health & Redevelopment Director ________________________________________ Jackie Kozak-Thiel, Chief Sustainability Officer 1.4 Packet Pg. 21 Attachment: Biz Engagment Charter (5989 : Business Engagement Action Plan) Project Plan Draft 2 8/21/17 Project title: Industry Action Group Project Leader: SeonAh Kendall Team Members: Lucas Mouttet, Shannon Hein Description: Similar to the Broadband Citizen Group, the Industry Action Group is brought together to share and exchange insight. Additionally, this group will be able to provide honest feedback on the City’s Business Engagement Action Plan and share this information and insight with their colleagues, networks and associations that they participate in. Objective: Share and exchange information in regard to the City’s Business Engagement Action Plan.  Be a liaison to the business community regarding the current process, engagement opportunities and share questions/insight back to the BEAP core team  Assist staff design communications for the broader business community Deliverables:  Identify a suite of communication tools to reach businesses of all sizes and industries  Develop marketing/communication plan to assist City employees in identifying the right communication tool for their engagement needs Key Actions / milestones Deadline  Hold a kick-off meeting inviting businesses to participate in the Industry Action Group o Agenda:  Group expectations – what it is and what it is note  Hear from the group on who is missing and where we should do additional outreach  Brainstorm groups we should be talking to/involving  Start crafting messaging and anticipating community questions  Outline future meeting time and schedule (every 6 – 8 weeks) 8/31/17   ATTACHMENT 5 1.5 Packet Pg. 22 Attachment: Project Plan Industry Action Group (5989 : Business Engagement Action Plan) Resources:  Budget: $1,500 (food, materials)  Estimated hours: 2 hours prep per meeting X 2 hour mtg. Meet more often at the beginning, estimate 20 hours in 2017  Location of files / resources:  Staffing this project: 1.5 Packet Pg. 23 Attachment: Project Plan Industry Action Group (5989 : Business Engagement Action Plan) 10-10-2017 Business Engagement Action Plan Jackie Kozak-Thiel, Josh Birks, SeonAh Kendall ATTACHMENT 6 1.6 Packet Pg. 24 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Question Business Engagement 1. Are we addressing what Council is hearing from the business community? 2. Does the Business Engagement Action Plan support and complement Council priorities? 2 1.6 Packet Pg. 25 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Council Priorities 3 Strategic Outcome Area Policy – Project EHO Lead/Support Economic Health • Small Business Visibility Ø Lead • Economic Health Focus Ø Business Retention and Expansion Ø Workforce Development Efficiencies Ø Strategic Alignment on Fees Ø Continued Focus on 1-25 Ultimate Design Ø Lead Ø Support Ø Support Ø Support • Connected Smart City Ø Innovation/City as a Platform Ø Broadband Ø Smart City Technology and Infrastructure Ø Lead Ø Support Ø Support 1.6 Packet Pg. 26 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Economic Health - Our Vision 4 A healthy, sustainable economy reflecting community values. 1.6 Packet Pg. 27 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) EHO History 5 2004 Economic Vitality & Sustainability Assessment Group 2005 Economic Action Plan 2006 Industry Cluster Analysis 2009 Economic Health Office (EHO) 2010 Urban Renewal Authority added 2012 EHO Joins Sustainability Service Area 2015 Updated Economic Health Strategic Plan 2016 Added Climate Economy 2017 Launched Business Engagement Action Plan 1.6 Packet Pg. 28 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Role of Economic Health 6 1.6 Packet Pg. 29 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) EHO Focus 7 Business Support • SeonAh Kendall (Lead) • Shannon Hein (SME) • Vacant (Policy/Metrics) Redevelopment • Patrick Rowe (Lead) Innovation & Climate Economy • Sean Carpenter (Lead) • Jackson Brockway (Innovation) Jackie Kozak Thiel (Chief Sustainability Officer); Josh Birks (Director); Rebecca Hicklin (Support); Emily Wilmsen (Communication) 1.6 Packet Pg. 30 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Baldrige Feedback 8 Opportunities for Improvement: Ø Systematic approach to: ü Identify business customer segments ü Listen to businesses ü Assess satisfaction and engagement ü Collect and evaluate information to improve services 1.6 Packet Pg. 31 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Business Engagement Vision 9 External Ø Improved business customer satisfaction Ø Enhanced relationship between the City and business community Internal Ø Coordinated City-wide business engagement strategy 1.6 Packet Pg. 32 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Business Engagement Action Plan Timeline 10 • Current State Assessment • Stakeholder Convening • Identify Issues & Gaps • Develop Strategy • Define Metrics • Council Engagement • City-wide Strategy for Engaging Business Customer • Implement non BFO items • Budget for Outcomes • Periodic Status Reports (2x/Year) • Regular Review of Approach • Improvements as identified Phase 1: Analysis Phase 2: Design Phase 3: Implementation Phase 4: Review & Modify 1.6 Packet Pg. 33 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Business Engagement Assessment 11 Ø A desire to increase consistency, improved communication, prevent duplication ü Demand for a city-wide Customer Relationship Management (CRM) System Ø No common language or consistent segmentation guidelines Ø Customer service and relationships are built and maintained differently City-wide Observations – Listening Sessions & Employee Survey 1.6 Packet Pg. 34 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Quick Wins 12 • ACCESS Fort Collins business identification Survey/Data • Pilot CRM • National Business Survey • Small Business Survey Mid-Cycle Offers Business listening session with Mayor and City Manager Business Appreciation Breakfast 1.6 Packet Pg. 35 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Business Engagement 13 1.6 Packet Pg. 36 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Council Engagement How Can Council Engage with Businesses? Meet the businesses where they are at. • Coffee talks • Site visits • Listening sessions • Tours • Events 14 1.6 Packet Pg. 37 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Next Steps 15 • Stakeholder Convening o October 2017 • Business Survey o October 2017 • Strategy Development o October 2017 – February 2018 1.6 Packet Pg. 38 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Questions Business Engagement 1. Are we addressing what Council is hearing from the business community? 2. Does the Business Engagement Action Plan support and complement Council priorities? 16 1.6 Packet Pg. 39 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) 17 1.6 Packet Pg. 40 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Objectives/Agenda • EHO History • Where we came from • Current State Assessment • Council Priorities • Where we are • Business Engagement is a team sport • Where we are headed • How we measure success • How Council can be involved 18 1.6 Packet Pg. 41 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) Opportunities for Improvements 19 • Visibility of economic health • Consistent business engagement • Housing attainability • In-town mobility • The right balance between the triple bottom line approach 1.6 Packet Pg. 42 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) What’s Working 20 • Business assistance packages • Redevelopment • Innosphere partnership • Talent – Labor Force Study; Talent 2.0 • Sector partnerships • Business Appreciation Breakfast • Business site visits 1.6 Packet Pg. 43 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) It’s a Team Sport 21 1.6 Packet Pg. 44 Attachment: Powerpoint presentation (5989 : Business Engagement Action Plan) DATE: STAFF: October 10, 2017 Sean Carpenter, Climate Economy Advisor Josh Birks, Economic Health Director Jackie Kozak-Thiel, Chief Sustainability Officer WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Climate Economy Action Plan Update. EXECUTIVE SUMMARY The purpose of this item is to provide City Council with an update on the Climate Economy Action Plan and overview steps for the implementation of this plan. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. What overall feedback does Council have regarding the systems-based approach of the Climate Economy Action Plan? 2. What direction would Council give regarding the tactic of developing strategies while we also seek “quick wins”? BACKGROUND / DISCUSSION Overview In 2014 the World Bank created the Global Commission on the Economy and Climate, a group composed of 24 former heads of state, finance ministers, leaders of businesses, cities, international organizations and research institutions, to identify and define the linkages between the Economy and Climate. The Commission’s report, “Better Growth - Better Climate, The New Climate Economy Report” (Attachment 1) focuses on the relationship between climate change and global economic drivers, concluding that “Economic growth and climate mitigation can be achieved together. We do not need to choose one or the other”. The World Bank report argues that the expected $90 trillion in global infrastructure investments projected to be made over the next fifteen years will essentially define the world’s future climate system. These investments can either pursue low-carbon/resilient infrastructure approaches, or they can follow traditional status quo designs. Low-carbon infrastructure is anticipated to have a slightly higher first cost versus status quo “grey infrastructure”, but those additional costs will be more than offset by much lower energy and fuel costs over their full lifecycle. Choosing the wrong investment approach is likely to have significant negative economic and social repercussions. Delayed action on financing of low-carbon infrastructure will result in increased adaptation costs and increased losses from stranded (high-carbon) assets. In a 2014 report entitled “The Cost of Delaying Action to Stem Climate Change” (Attachment 2), the U.S. Council of Economic Advisers concluded that each decade of delay will increase the costs of mitigation by 40 percent on average, with higher costs for more ambitious climate goals. In short, the time to act is now, concludes the World Bank Commission, the Council of Economic Advisers and numerous other national and international institutions evaluating the relationship between the Economy and Climate. The World Bank report recommends ten transformative actions: 1. Integrate climate risk into strategic decisions; 2. Secure a strong international climate agreement; 3. End perverse subsidies; 2 Packet Pg. 45 October 10, 2017 Page 2 4. Price carbon to send a clear market signal; 5. Scale-up low-carbon innovation; 6. Reduce the cost of capital for low-carbon investment; 7. Move toward connected and compact cities; 8. End deforestation; 9. Restore degraded lands; 10. Phase out unabated coal quickly; Figure 1 - Key Drivers of Growth and Climate Performance As Figure 1 suggests, cities-especially those like Fort Collins that control the energy systems supporting their citizens-are ideally suited to implement a majority of the actions called for in the New Climate Economy Report. In particular, Fort Collins is well positioned to locally implement three of the ten global “transformative actions” (above), including numbers: (5) Scale-up low-carbon innovation; (6) Reduce the cost of capital for low-carbon investment and; (7) Move toward connected and compact cities. In the United States, the transition to a clean energy economy is underway. All available research and data indicates that this shift is irreversible. Innovative lower-carbon energy, transportation, heating/cooling systems and other technologies will continue to be developed and deployed in the coming years. New tools, approaches and financing will also be required to help households and businesses make their homes, buildings, transportation, appliances and manufacturing assets more energy efficient and resilient. The recent Bloomberg report “From Risk to Return” (Attachment 3) forecasts 460,000 clean energy jobs in the United States by 2030, and 800,000 clean energy jobs by 2050. In Colorado, companies and employment in this space are growing rapidly. As of January 2017 there were more than 62,071 clean energy jobs in the State, with more than 2,365 of these positions located in Larimer County alone. (Attachment 4) What is the Climate Economy? The premise behind the concept of the “Climate Economy” is that by taking the lead in deploying innovative clean energy solutions, cities can foster broad-based economic prosperity AND climate action objectives. In other words, sustainable economic health and lower carbon emissions are not mutually exclusive. By providing increased access to capital, collaboration and financing mechanisms that incent private-sector investment, Fort Collins can foster a thriving, “future-proof” business environment and decrease our greenhouse gas emissions. The City of Fort Collins is developing a Climate Economy Action Plan (CEAP) in order to advance community objects and positively contribute to the quality of life for citizens and businesses 2 Packet Pg. 46 October 10, 2017 Page 3 Expected Impacts of the Climate Economy  Foundation for a “future-proof” clean energy-driven economy in Northern Colorado;  Strengthens Triple-Helix partnerships with residents, businesses and CSU;  Advances social equity objectives by improving health and safety of buildings;  Fosters new good-paying entry-level and advanced jobs in Fort Collins;  Enhances existing innovation ecosystem by leveraging emerging Smart Cities technologies and City as a Platform opportunities. Staff Approach Staff has pursued a two-fold methodology to the Climate Economy Action Plan: (1) develop strategic approach and; (2) seek quick wins. Strategic Approach Staff is developing a comprehensive strategic effort, the Climate Economy Action Plan (CEAP) that not only supports CAP objectives, but also will materially contribute to improved economic health and well-being for residents, businesses and other stakeholders. Informed by local triple-helix stakeholders, as well as state, regional and global expertise, the CEAP seeks to address the greatest areas for carbon footprint reduction, while supporting City of Fort Collins Utilities, PRPA, CSU, business and other key partners to engage in Public-Private Partnerships (P3s) to leverage our collective assets and advance common objectives. By deploying systems- based, data driven methodologies the CEAP will also help improve community and business resiliency and reduce economic risks from a changing climate. Quick Wins C-PACE Colorado Commercial Property Accessed Clean Energy (C-PACE) is a new no-out of pocket financing tool that allows commercial and multifamily property owners in Colorado to obtain loans for qualifying energy efficiency, water conservation, and other clean energy improvements on existing and newly constructed properties. Repayment of the financing is achieved through a voluntary assessment on their property tax bill, and loan balances convey with the building. Research indicates that buildings with PACE energy upgrades increase in value on average by 15-40 percent. Because businesses can finance 100% of energy efficiency upgrades with no out of pock expense, over up to 20 years, many efficiency investments that previously did not meet internal “hurdle rates” for investment become immediately economically feasible. All or nearly all C-PACE projects in Colorado to date have “cash flow positive”, meaning that monthly savings from energy efficiency upgrades more than cover the loan payments, and in most cases actually put money back in the pockets of participating businesses. To date, fifteen Colorado Counties have approved local PACE financing, covering more than 50% of the commercial business stock in the state. Larimer County has not yet approved C-PACE, and EHO is working to support County leadership to become educated on this opportunity. Despite the fact that C-PACE is not yet approved in Larimer County, several area businesses have applied for PACE project assessment and approval, including:  Retail (2) - Estimated Life Cycle savings = $398,528 (Mid-size brewery in Fort Collins, mid-sized multi- tenant retail - Loveland,)  Office (2) - Estimated Life Cycle savings = $769,901 (Large multi-tenant office in Fort Collins, large insurance company Fort Collins, large multi-family housing in Fort Collins)  Healthcare / Rehab Facility (1) - Estimated Life Cycle savings = $840,465 (Large outpatient health facility, Loveland)  Healthcare / Hospital (2 buildings) - Estimated Life Cycle Savings = $2,284,642 Other Fort Collins and Larimer County-based businesses have already expressed strong interest in C-PACE, including: 2 Packet Pg. 47 October 10, 2017 Page 4  McWhinney  Brinkman  AB  Positive Energy  Sandbox Solar  U.S. Bank  First Bank  Citywide Bank Staff research indicates that C-PACE approval could incent millions of dollars of private sector energy efficiency investment in new and existing building stock in Fort Collins, and likely several hundred new jobs by 2030. Colorado Smart Cities Alliance The Denver South Economic Development Partnership founded the Colorado Smart Cities Alliance to provide an open, collaborative and active platform where local business and citizen leaders, public officials and community stakeholders could come together in their efforts to continually improve the region’s economic foundations for future generations. Founding members of the alliance include: Arvada, Aurora, Boulder, Centennial, Colorado Springs, Denver, Fort Collins, Greenwood Village, Littleton, Lone Tree, Longmont and Westminster “The Colorado Smart Cities Alliance is advancing policies and technologies that will better equip Colorado residents to live, work and play in a future that is increasingly being shaped by the complex challenges of urban growth,” said Jake Rishavy, vice president of innovation at the Denver South Economic Development Partnership. “We’re working to create a 21st-century technology infrastructure right here in Colorado that will help to enhance everyone’s quality of life, particularly as our communities continue to grow. With our citizen-centered approach to design and public policy, this alliance is going to put Colorado on the map as a smart cities leader.” Global technology-solutions provider Arrow Electronics is serving as a technology advisor to the alliance, helping member cities design and pilot projects. Arrow is also building a platform where alliance members can securely share, aggregate and analyze data while piloting and improving upon smart cities projects. The alliance also includes research partners Colorado Innovation Corridor, a partnership between Formativ and NREL, the country’s premier federally funded laboratory in advanced energy and energy efficiency and UCAR/NCAR, the nation’s premier federally funded laboratory in weather forecasting, earth sciences, and climate analysis. The Colorado Technology Association, a connector that brings together public organizations, academic institutions and private enterprise to advance the tech ecosystem across the state ensure Colorado, is supporting the alliance as a leader in smart city innovation. CU Denver was tapped by the Denver South management team to lead the university’s efforts for the alliance, and Fort Collins will be working with Denver South to encourage the alliance to engage CSU is this effort to augment and support the research agenda of this new multi-city, regional collaboration. Green Revolving Funds Staff has developed a Green Revolving Fund (GRF) concept, in collaboration with CSU, to develop new financing options for the University to self-fund energy efficiency upgrades on Campus using a portion of the University’s endowment. This effort includes the opportunity for CSU to join the national “Billion Dollar Challenge” to help American Universities leverage endowed resources to improve sustainability and reduce their carbon footprints across the United States (see Attachment E). First Local Deployment of “Spark Fund” NY-based Spark Fund is seeking to deploy significant energy efficiency funding in Northern Colorado, and is entering the market in Fort Collins with a local private sector energy efficiency contractor. Spark Fund is unique in that it is offering “energy efficiency as a service” by providing guaranteed savings (like an ESCO), with upgrades of technologies automatically including in the service agreement, as they become available (such as the transition from CFLs to LED lighting), similar to traditional business vehicle or heavy equipment leasing programs. Staff is in 2 Packet Pg. 48 October 10, 2017 Page 5 conversation with the local Spark Fund business partner, and is tracking this new private sector financing tool closely. Participation in the 2017 Bloomberg Mayor’s Challenge The City of Fort Collins is participating in the ’2017 Bloomberg Mayors Challenge <<http://mayorschallenge.bloomberg.org/>/> (“the challenge”), a nationwide competition that encourages cities to develop inventive ideas and approaches to help solve today’s most pressing municipal problems. Mayor Troxell selected the “Climate Economy” as the topic for the City’s challenge theme, and on Friday September 29, the City hosted an “Accelerator Workshop” with a Bloomberg-supplied pro-bono consultant to support the development of our grant proposal. The challenge is not only focused on creating innovative approaches to vexing municipal problems, but also on replicating and disseminating promising approaches and ideas in cities across the country. Fort Collins is competing against 550 other cities in the U.S. for technical assistance from Bloomberg and cash prizes of $100,000 to $5M. Fort Collins is also currently engaged with Bloomberg in other very prestigious and important programs, including “What Works Cities” and “The Bloomberg/Harvard Leadership Project” and C40 Cities. Drafting and submission of the final 2017 Mayor’s Challenge grant proposal is being conducted with input from a cross-cutting city team, and in collaboration with CSU and other triple-helix partners, with a final submission deadline of October 20th, 2017. Integration with City as a Platform Many of the approaches and opportunities identified for the Climate Economy Action Plan also intersect with efforts to advance Fort Collins as an “innovation community” with “City as a Platform” thinking and technologies. Staff is working closely to leverage and connect these distinct, but closely related initiatives for maximum synergy and impact. Background on City as a Platform: In April 2015, City Council and leadership stated that developing an “innovation community” would be a key strategy in Fort Collins, and in 2017 they codified this theme as a “council priority”. In response, in February 2017 the City as a Platform Task Force (CPTF) was formed composed of eleven city staff from a broad cross-section of departments across the organization. CPTF began to explore how new platform thinking, tools and technologies can be systematically and transparently harnessed for the future benefit of residents, businesses and the City organization. Just as thoughtful decisions and investments made decades earlier laid the groundwork for the Fort Collins to benefit from the personal computing and craft beer revolutions, City as a Platform Task Force members likewise expect that recommendations contained in this report also can contribute to the future vitality, sense of place and economic prosperity for residents of Fort Collins. Context for City as a Platform: Over the last 20 years, the U.S. economy has seen a dramatic surge in “disruptive innovators” who are leveraging advances in technology and connectivity to fundamentally change how goods and services are delivered. From Apple to Uber, technology is remaking citizen expectations around communication, social engagement and customer service. Not surprisingly, there’s a growing appetite for all levels of government to become more responsive and to adopt these new technologies and tools, in order to improve community wellbeing and “co-create” solutions to local challenges. As disruptive innovators continually reset citizen expectations around the speed and engagement they expect from government (e.g. the “Amazon effect”), it’s becoming clear that cities like Fort Collins have a unique, generational opportunity to use new tools to help redefine, and improve, how government services are delivered, as part of a larger market transformation already well underway in the United States. In so doing, Fort Collins can foster increased municipal and private sector innovation, economic vitality, equity, and more meaningful participation and engagement with citizens in our community. This is the essence of the idea behind “City as a Platform” and “platform thinking”; terms coined by the Aspen Institute in 2016 to express how cities can use digital technologies to rethink and revitalize traditional approaches to urban governance. 2 Packet Pg. 49 October 10, 2017 Page 6 Climate Economy Action Plan Focus Areas  Buildings  Transportation  Energy Supply  Waste Reduction Public Outreach The Climate Economy Team has reached out to more than forty key stakeholders in Fort Collins. More than two dozen in-person interviews have been conducted to date. Ongoing and continued outreach is planned in order to seek regular, iterative feedback from business, residents, City Boards and Commissions and others stakeholders. These include:  Primary and secondary employers  Platte River Power Authority  Chamber of Commerce Legislative Affairs Committee, Exec VP and Business Advocacy Coordinator  Presentations to City boards and commissions (To date: Energy, Air Quality, Natural Resources, Economic Advisory; scheduled, not completed: Water)  Individual thought leaders in Fort Collins  Subject matter experts at the state and national levels. Next Steps  Feedback and guidance from Council Work Session  Additional stakeholder engagement - ongoing  Pursue Quick Wins - ongoing  Phase 2 Design - Complete Q1 2018  Phase 3 Implementation - Beginning Q2 2018. ATTACHMENTS 1. Better Growth - Better Climate: The New Climate Economy Report (PDF) 2. The Cost of Delaying Action to Stem Climate Change (PDF) 3. From Risk to Return, Investing in a Clean Energy Economy (PDF) 4. Overview Clean Jobs Colorado (PDF) 5. CSU Green Revolving Fund (PDF) 6. Powerpoint presentation (PDF) 2 Packet Pg. 50 BETTER GROWTH, BETTER CLIMATE : The New Climate Economy Report THE SYNTHESIS REPORT SEPTEMBER 2014 THE GLOBAL COMMISSION ON THE ECONOMY AND CLIMATE BETTER GROWTH BETTER CLIMATE The New Climate Economy Report THE SYNTHESIS REPORT ATTACHMENT 1 2.1 Packet Pg. 51 Attachment: Better Growth - Better Climate: The New Climate Economy Report (5990 : Climate Economy Update Work Session) Managing Partner PARTNERS ISBN: 978 0 9906845 0 3 New Climate Economy c/o World Resources Institute 10 G St NE Suite 800 Washington, DC 20002, USA +1 (202) 729-7600 www.newclimateeconomy.report www.newclimateeconomy.net September 2014 2.1 Packet Pg. 52 Attachment: Better Growth - Better Climate: The New Climate Economy Report (5990 : Climate Economy Update Work Session) BETTER GROWTH BETTER CLIMATE The New Climate Economy Report THE SYNTHESIS REPORT Photo credit: Asian Development Bank 2.1 Packet Pg. 53 Attachment: Better Growth - Better Climate: The New Climate Economy Report (5990 : Climate Economy Update Work Session) 4 www.newclimateeconomy.report The New Climate Economy The Global Commission on the Economy and Climate, and its flagship project The New Climate Economy, were set up to help governments, businesses and society make better-informed decisions on how to achieve economic prosperity and development while also addressing climate change. This programme of work was commissioned in 2013 by the governments of seven countries: Colombia, Ethiopia, Indonesia, Norway, South Korea, Sweden and the United Kingdom. The Commission has operated as an independent body and, while benefiting from the support of the seven governments, has been given full freedom to reach its own conclusions. The Commission’s programme of work has been conducted by a global partnership of eight leading research institutes: World Resources Institute (WRI, Managing Partner), Climate Policy Initiative (CPI), Ethiopian Development Research Institute (EDRI), Global Green Growth Institute (GGGI), Indian Council for Research on International Economic Relations (ICRIER), LSE Cities, Stockholm Environment Institute (SEI) and Tsinghua University. 2.1 Packet Pg. 54 Attachment: Better Growth - Better Climate: The New Climate Economy Report (5990 : Climate Economy Update Work Session) BETTER GROWTH, BETTER CLIMATE : THE NEW CLIMATE ECONOMY SYNTHESIS REPORT 5 The Global Commission on the Economy and Climate The Global Commission on the Economy and Climate has overseen the New Climate Economy project. Chaired by former President of Mexico Felipe Calderón, the Commission comprises former heads of government and finance ministers, and leaders in the fields of economics, business and finance. Members of the Global Commission endorse the general thrust of the arguments, findings, and recommendations made in this report, but should not be taken as agreeing with every word or number. They serve on the Commission in a personal capacity. The institutions with which they are affiliated have therefore not been asked formally to endorse the report and should not be taken as having done so. Felipe Calderón, Former President of Mexico (Chair) Nicholas Stern, I G Patel Chair of Economics and Government, London School of Economics (Co-Chair); President, British Academy Ingrid Bonde, Chief Finance Officer and Deputy Chief Executive Officer, Vattenfall AB Sharan Burrow, General Secretary, International Trade Union Confederation Chen Yuan, Vice-Chair, National Committee of the Chinese People’s Political Consultative Conference; former Chairman, China Development Bank Helen Clark, Administrator, United Nations Development Program; former Prime Minister of New Zealand Luísa Diogo, Former Prime Minister of Mozambique Dan L. Doctoroff, President and Chief Executive Officer, Bloomberg LP S. Gopalakrishan, Executive Vice-Chairman, INFOSYS; President, Confederation of Indian Industry Angel Gurría, Secretary-General, Organisation for Economic Co-operation and Development Chad Holliday, Chairman, Bank of America Paul Polman, Chief Executive Officer, Unilever; Chair, World Business Council for Sustainable Development Sri Mulyani Indrawati, Managing Director and Chief Operating Officer, World Bank; former Finance Minister of Indonesia Caio Koch-Weser, Vice Chairman, Deutsche Bank Group; Chair, Supervisory Board of the European Climate Foundation Ricardo Lagos, Former President of Chile Michel M. Liès, Chief Executive Officer, Swiss Re Trevor Manuel, Former Finance Minister of South Africa Takehiko Nakao, President, Asian Development Bank Eduardo Paes, Mayor of Rio de Janeiro; Chair, C40 Cities Climate Leadership Group Annise Parker, Mayor of Houston, Texas Nemat Shafik, Deputy Governor, Bank of England; former Deputy Managing Director, International Monetary Fund (until June 2014) Jens Stoltenberg, United Nations Secretary-General’s Special Envoy on Climate Change; former Prime Minister of Norway Maria van der Hoeven, Executive Director, International Energy Agency Zhu Levin, President and Chief Executive Officer, China International Capital Corporation 2.1 Packet Pg. 55 Attachment: Better Growth - Better Climate: The New Climate Economy Report (5990 : Climate Economy Update Work Session) 6 www.newclimateeconomy.report The Economics Advisory Panel The project was advised by a panel of distinguished economists, leaders in their respective disciplines. While the Economics Advisory Panel (EAP) has provided valuable guidance that has influenced the work of the Commission, they were not asked to formally endorse the report and should not be taken as having done so. Their wide-ranging contributions are described in “Theories and perspectives on growth and change: Guidance from the Economics Advisory Panel to the report of the Commission”, by Nicholas Stern, published as part of the full report. Nicholas Stern (Chair), I G Patel Chair of Economics and Government, London School of Economics Philippe Aghion, Robert C Waggoner Professor of Economics, Harvard University Isher Judge Ahluwalia, Chairperson, Indian Council for Research on International Economic Relations Kaushik Basu, Senior Vice President and Chief Economist, World Bank Ottmar Edenhofer, Professor of the Economics of Climate Change, Technical University of Berlin Fan Gang, Director of the National Economic Research Institute, China Ross Garnaut, Distinguished Professor of Economics, Australian National University Benno Ndulu, Governor, Central Bank of Tanzania Daniel Kahneman, Professor of Psychology and Public Affairs Emeritus, Woodrow Wilson School, Princeton University, and Nobel Laureate Ian Parry, Principal Environmental Fiscal Policy Expert, International Monetary Fund Carlota Perez, Professor of Technology and Socio- Economic Development, Tallinn University of Technology; and Centennial Professor, London School of Economics Torsten Persson, Professor of Economics, Institute of International Economic Studies, Stockholm University Dani Rodrik, Albert O. Hirschman Professor of Social Science, Institute for Advanced Study Michael Spence, Professor of Economics, New York University, and Nobel Laureate Rintaro Tamaki, Deputy Secretary General, Organisation for Economic Co-operation and Development 2.1 Packet Pg. 56 Attachment: Better Growth - Better Climate: The New Climate Economy Report (5990 : Climate Economy Update Work Session) BETTER GROWTH, BETTER CLIMATE : THE NEW CLIMATE ECONOMY SYNTHESIS REPORT 7 All over the world, people want to achieve better lives for themselves and for their children. Governments want to secure economic growth, improve living standards, create jobs and reduce poverty. Businesses want to expand and become more profitable. Today we also know that the world must deal with the challenge of climate change. Can these aspirations all be met at the same time? Is it possible to tackle long-term climate change while also, now, promoting economic growth and development? Or must we choose between our future security and our current living standards? It was to provide an objective, independent examination of these questions that the Global Commission on the Economy and Climate was established in 2013 by a group of seven countries. Our report is addressed to economic decision-makers across the world in both public and private sectors. Its core conclusion is that, by shaping the major processes of structural and technological change now occurring in the global economy, we can create lasting economic growth while also tackling the immense risks of climate change. We are extremely grateful to the governments of Colombia, Ethiopia, Indonesia, the Republic of Korea, Norway, Sweden and the United Kingdom for their vision and support. They have given us freedom in conducting our work, and the findings and recommendations in this report are entirely independent of them. The Commission is made up of 24 former heads of government and finance ministers, and leaders of businesses, cities, international organisations, and research institutions. Their wealth of experience gives confidence that our research has been grounded in reality, and that the recommendations of this report can be implemented. The Commission has been advised by a panel of 15 distinguished economists, all of them world leaders in their respective economic disciplines. Their diverse perspectives on the economics of growth, development and structural transformation, public policy, risk and economic history have guided the project’s intellectual approach. The research programme has been conducted by a dedicated team, supported by a partnership of economic and policy research institutions from five continents. The work has drawn on extensive engagement with economic decision-makers in governments, states, cities, communities, companies, trade unions, international organisations and financial institutions throughout the world. Over 100 organisations have actively contributed to the work of the Commission through research papers, data, team members, feedback, advice and support. This report therefore reflects the insights and experience of many institutions and experts. We are grateful to all of them. The issues dealt with in this report could not be more important. Almost every country today faces difficult economic problems. Climate change confronts the world as a whole with an unprecedented challenge. The 10-point Global Action Plan we propose in this report can help 8 www.newclimateeconomy.report The Global Commission on the Economy and Climate was set up to examine whether it is possible to achieve lasting economic growth while also tackling the risks of climate change. Its report seeks to inform economic decision-makers in both public and private sectors, many of whom recognise the serious risks caused by climate change, but also need to tackle more immediate concerns such as jobs, competitiveness and poverty. The report brings together evidence and analysis, learning from the practical experience of countries, cities and businesses across the world. The report’s conclusion is that countries at all levels of income now have the opportunity to build lasting economic growth at the same time as reducing the immense risks of climate change. This is made possible by structural and technological changes unfolding in the global economy and opportunities for greater economic efficiency. The capital for the necessary investments is available, and the potential for innovation is vast. What is needed is strong political leadership and credible, consistent policies. The next 15 years will be critical, as the global economy undergoes a deep structural transformation. It will not be “business as usual”. The global economy will grow by more than half, a billion more people will come to live in cities, and rapid technological advance will continue to change businesses and lives. Around US$90 trillion is likely to be invested in infrastructure in the world’s urban, land use and energy systems. How these changes are managed will shape future patterns of growth, productivity and living standards. The next 15 years of investment will also determine the future of the world’s climate system. Climate change caused by past greenhouse gas emissions is already having serious economic consequences, especially in more exposed areas of the world. Without stronger action in the next 10-15 years, which leads global emissions to peak and then fall, it is near certain that global average warming will exceed 2°C, the level the international community has agreed not to cross. On current trends, warming could exceed 4°C by the end of the century, with extreme and potentially irreversible impacts. By building up greenhouse gas concentrations and locking in the stock of high-carbon assets, delay in reducing emissions makes it progressively more expensive to shift towards a low-carbon economy. Future economic growth does not have to copy the high-carbon, unevenly distributed model of the past. There is now huge potential to invest in greater efficiency, structural transformation and technological change in three key systems of the economy: • Cities are engines of economic growth. They generate around 80% of global economic output, and around 70% of global energy use and energy-related GHG emissions. How the world’s largest and fastest- growing cities develop will be critical to the future path of the global economy and climate. But much urban growth today is unplanned and unstructured, with significant economic, social and environmental BETTER GROWTH, BETTER CLIMATE : THE NEW CLIMATE ECONOMY SYNTHESIS REPORT 9 increasing emissions. While subsidies for clean energy amount to around US$100 billion, subsidies to polluting fossil fuels are now estimated at around US$600 billion per year. Phasing out fossil fuel subsidies can improve growth and release resources that can be reallocated to benefit people on low incomes. A strong and predictable price on carbon will drive higher energy productivity and provide new fiscal revenues, which can be used to cut other taxes. Well-designed regulations, such as higher performance standards for appliances and vehicles, are also needed. • Investment in infrastructure underpins modern economic growth. Low-carbon forms of infrastructure are essential to reduce current emissions trajectories. Yet many economies today are failing to mobilise sufficient finance to meet their infrastructure needs. This is not due to a shortage of capital in the global economy. It results, in many countries, from a lack of public financing capacity and the market perception that investments are high-risk. Financial innovations, including green bonds, risk-sharing instruments and products which align the risk profile of low-carbon assets with the needs of investors, can reduce financing costs, potentially by up to 20% for low-carbon electricity. National and international development banks should be strengthened and expanded. • Stimulating innovation in technologies, business models and social practices can drive both growth and emissions reduction. Advances in digitisation, new materials, life sciences and production processes have the potential to transform markets and dramatically cut resource consumption. But technology will not automatically advance in a low- carbon direction. It requires clear policy signals, including the reduction of market and regulatory barriers to new technologies and business models, and well-targeted public expenditure. To help create the next wave of resource-efficient, low-carbon technologies, public research and development (R&D) investment in the energy sector should triple to well over US$100 billion a year by the mid-2020s. Well-designed policies in these fields can make growth and climate objectives mutually reinforcing in both the short and medium term. In the long term, if climate change is not tackled, growth itself will be at risk. Consistent, credible, long-term policy signals are crucial. By shaping market expectations, such policy encourages greater investment, lowering the costs of the transition to a low-carbon economy. By contrast, policy uncertainty in many countries has raised the cost of capital, damaging investment, jobs and growth. In the long run, there is a significant risk that high-carbon investments may get devalued or “stranded” as action to reduce greenhouse gas emissions is strengthened. The quality of growth matters, as well as its rate. Many low-carbon policies deliver multiple other benefits, including greater energy security, less traffic congestion, 10 www.newclimateeconomy.report 5. Substantially reduce capital costs for low-carbon infrastructure investments, expanding access to institutional capital and lowering its costs for low- carbon assets. 6. Scale up innovation in key low-carbon and climate- resilient technologies, tripling public investment in clean energy R&D and removing barriers to entrepreneurship and creativity. 7. Make connected and compact cities the preferred form of urban development, by encouraging better- managed urban growth and prioritising investments in efficient and safe mass transit systems. 8. Stop deforestation of natural forests by 2030, by strengthening the incentives for long-term investment and forest protection, and increasing international funding to around US$5 billion per year, progressively linked to performance. 9. Restore at least 500 million hectares of lost or degraded forests and agricultural lands by 2030, strengthening rural incomes and food security. 10. Accelerate the shift away from polluting coal-fired power generation, phasing out new unabated coal plants in developed economies immediately and in middle-income countries by 2025. The first six recommendations provide the conditions necessary for a strong and credible framework to foster low-carbon and climate-resilient investment and growth. The last four point to vital opportunities for change which can drive future growth and lower climate risk in cities, land use and energy systems. Implementation of the policies and investments proposed in this report could deliver at least half of the reductions in emissions needed by 2030 to lower the risk of dangerous climate change. With strong and broad implementation, rapid learning and sharing of best practice, this number could potentially rise to 90%. All the measures would deliver multiple economic and social benefits, even before considering their benefits to climate. Further action will also be required. Some of this, such as the development of carbon capture, use and storage technologies, will have net costs to be borne solely for the purpose of reducing climate risk. Beyond 2030 net global emissions will need to fall further towards near zero or below in the second half of the century. But the costs will be much lower and the opportunities for growth much greater if the foundations of a low-carbon economy are laid now. A strong and equitable international agreement is essential to support ambitious domestic action. Developed countries will need to show leadership through their own strong emissions reductions, and by mobilising financial and technological support for developing countries. At the same time, developing countries already account for around two-thirds of annual greenhouse gas emissions. Global reductions on the scale required will therefore not be possible unless all countries play their part. The shift towards a low-carbon, climate-resilient path of growth and development will not be easy, and The full report can be found by following the link below: http://static.newclimateeconomy.report/wp-content/uploads/2014/08/BetterGrowth- BetterClimate_NCE_Synthesis-Report_web.pdf 2.1 Packet Pg. 61 Attachment: Better Growth - Better Climate: The New Climate Economy Report (5990 : Climate Economy Update Work Session) THE RECENT SLOWDOWN IN THE COST OF DELAYING ACTION TO STEM CLIMATE CHANGE The Council of Economic Advisers July 2014 ATTACHMENT 2 2.2 Packet Pg. 62 Attachment: The Cost of Delaying Action to Stem Climate Change (5990 : Climate Economy Update Work Session) 1 Executive Summary The signs of climate change are all around us. The average temperature in the United States during the past decade was 0.8° Celsius (1.5° Fahrenheit) warmer than the 1901-1960 average, and the last decade was the warmest on record both in the United States and globally. Global sea levels are currently rising at approximately 1.25 inches per decade, and the rate of increase appears to be accelerating. Climate change is having different impacts across regions within the United States. In the West, heat waves have become more frequent and more intense, while heavy downpours are increasing throughout the lower 48 States and Alaska, especially in the Midwest and Northeast.1 The scientific consensus is that these changes, and many others, are largely consequences of anthropogenic emissions of greenhouse gases.2 The emission of greenhouse gases such as carbon dioxide (CO2) harms others in a way that is not reflected in the price of carbon-based energy, that is, CO2 emissions create a negative externality. Because the price of carbon-based energy does not reflect the full costs, or economic damages, of CO2 emissions, market forces result in a level of CO2 emissions that is too high. Because of this market failure, public policies are needed to reduce CO2 emissions and thereby to limit the damage to economies and the natural world from further climate change. There is a vigorous public debate over whether to act now to stem climate change or instead to delay implementing mitigation policies until a future date. This report examines the economic consequences of delaying implementing such policies and reaches two main conclusions, both of which point to the benefits of implementing mitigation policies now and to the net costs of delaying taking such actions. First, although delaying action can reduce costs in the short run, on net, delaying action to limit the effects of climate change is costly. Because CO2 accumulates in the atmosphere, delaying action increases CO2 concentrations. Thus, if a policy delay leads to higher ultimate CO2 concentrations, that delay produces persistent economic damages that arise from higher temperatures and higher CO2 concentrations. Alternatively, if a delayed policy still aims to hit a given climate target, such as limiting CO2 concentration to given level, then that delay means that the policy, when implemented, must be more stringent and thus more costly in subsequent years. In either case, delay is costly. These costs will take the form of either greater damages from climate change or higher costs associated with implementing more rapid reductions in greenhouse gas emissions. In practice, delay could result in both types of costs. These costs can be large: 1 For a fuller treatment of the current and projected consequences of climate change for U.S. regions and sectors, see the Third National Climate Assessment (United States Global Change Research Program (USGCRP) 2014). 2 See for example the Summary for Policymakers in Working Group I contribution to the Intergovernmental Panel on Climate Change Fifth Assessment Report (IPCC WG I AR5 2013). 2.2 Packet Pg. 63 Attachment: The Cost of Delaying Action to Stem Climate Change (5990 : Climate Economy Update Work Session) 2  Based on a leading aggregate damage estimate in the climate economics literature, a delay that results in warming of 3° Celsius above preindustrial levels, instead of 2°, could increase economic damages by approximately 0.9 percent of global output. To put this percentage in perspective, 0.9 percent of estimated 2014 U.S. Gross Domestic Product (GDP) is approximately $150 billion. The incremental cost of an additional degree of warming beyond 3° Celsius would be even greater. Moreover, these costs are not one- time, but are rather incurred year after year because of the permanent damage caused by increased climate change resulting from the delay.  An analysis of research on the cost of delay for hitting a specified climate target (typically, a given concentration of greenhouse gases) suggests that net mitigation costs increase, on average, by approximately 40 percent for each decade of delay. These costs are higher for more aggressive climate goals: each year of delay means more CO2 emissions, so it becomes increasingly difficult, or even infeasible, to hit a climate target that is likely to yield only moderate temperature increases. Second, climate policy can be thought of as “climate insurance” taken out against the most severe and irreversible potential consequences of climate change. Events such as the rapid melting of ice sheets and the consequent increase of global sea levels, or temperature increases on the higher end of the range of scientific uncertainty, could pose such severe economic consequences as reasonably to be thought of as climate catastrophes. Confronting the possibility of climate catastrophes means taking prudent steps now to reduce the future chances of the most severe consequences of climate change. The longer that action is postponed, the greater will be the concentration of CO2 in the atmosphere and the greater is the risk. Just as businesses and individuals guard against severe financial risks by purchasing various forms of insurance, policymakers can take actions now that reduce the chances of triggering the most severe climate events. And, unlike conventional insurance policies, climate policy that serves as climate insurance is an investment that also leads to cleaner air, energy security, and benefits that are difficult to monetize like biological diversity. 2.2 Packet Pg. 64 Attachment: The Cost of Delaying Action to Stem Climate Change (5990 : Climate Economy Update Work Session) The full report can be viewed by following the link below: https://scholar.harvard.edu/files/stock/files/cost_of_delaying_action.pdf 2.2 Packet Pg. 65 Attachment: The Cost of Delaying Action to Stem Climate Change (5990 : Climate Economy Update Work Session) From Risk to Return | Investing in a Clean Energy Economy ATTACHMENT 3 2.3 Packet Pg. 66 Attachment: From Risk to Return, Investing in a Clean Energy Economy (5990 : Climate Economy Update Work Session) 2.3 Packet Pg. 67 Attachment: From Risk to Return, Investing in a Clean Energy Economy (5990 : Climate Economy Update Work Session) A Product of the Risky Business Project Co-Chairs Michael R. Bloomberg, founder, Bloomberg Philanthropies; founder, Bloomberg L.P.; 108th Mayor of the City of New York Henry M. Paulson, Jr., Chairman of the Paulson Institute; former U.S. Secretary of the Treasury Thomas F. Steyer, Business Leader and Philanthropist Risk Committee Members Henry Cisneros, Principal, Siebert Cisneros Shank; former US Secretary of Housing and Urban Development (HUD); former Mayor of San Antonio, TX Anne M. Mulcahy, Chairman, Board of Trustees, Save the Children; Former Chairman and CEO, Xerox Corporation James W. Owens, Former Chairman and CEO, Caterpillar Inc. Gregory Page, Retired Chairman and CEO, Cargill, Inc. Robert E. Rubin, Co-Chairman, Council on Foreign Relations; former U.S. Secretary of the Treasury Donna E. Shalala, President and CEO of the Clinton Foundation George P. Shultz, Thomas W. and Susan B. Ford Distinguished Fellow at the Hoover Institution; former U.S. Secretary of State; former U.S. Secretary of the Treasury; former U.S. Secretary of Labor; former Director, Office of Management and Budget; former President, Bechtel Group Dr. Alfred Sommer, Dean Emeritus, Bloomberg School of Public Health; University Distinguished Service Professor, Johns Hopkins University Rob Walton, Retired Chairman of the Board of Directors of Walmart Stores, Inc. 2.3 Packet Pg. 68 Attachment: From Risk to Return, Investing in a Clean Energy Economy (5990 : Climate Economy Update Work Session) /4 From Risk to Return | Investing in a Clean Energy Economy In our 2014 inaugural report, “Risky Business: The Economic Risks of Climate Change in the United States,” we found that the economic risks from unmitigated climate change to American businesses and long-term investors are large and unacceptable. Subsequent scientific data and analysis have reinforced and strengthened that conclusion. As a result, we, the Co-Chairs and Risk Committee of the Risky Business Project, are united in recognizing the need to respond to the risk climate change poses to the American economy. Now we turn to the obvious next question: how to respond to those risks. Seriously addressing climate change requires reducing greenhouse gas emissions by at least 80 percent by 2050 in the U.S. and across all major economies. We find that this goal is technically and economically achievable using commercial or near-commercial technology. Most important, we find that meeting the goal does not require an energy miracle or unprecedented spending. The transition to a cleaner energy economy rests on three pillars: moving from fossil fuels to electricity wherever possible, generating electricity with low or zero carbon emissions, and using energy much more efficiently. This means building new sources of zero- and low-carbon energy, including wind, solar, and nuclear; electrifying vehicles, heating systems, and many other products and processes; and investing in making buildings, appliances, and manufacturing more energy efficient. Meeting these targets requires a large-scale shift away from ongoing spending on fossil fuels and toward up-front capital investments in clean energy technologies. Many of those, such as wind and solar, have little or no fuel cost once built. Given an appropriate policy framework, we expect these investments to be made largely by the private sector and consumers, and to yield significant returns. Because of the large capital investments and the long-term savings in fuel costs, this shift presents significant opportunities for many American investors and businesses. Notably, shifting the U.S. to a low-carbon, clean energy system presents not just long term benefits but also immediate, near-term opportunities, particularly for those actors best positioned to capitalize on these trends. Executive Summary 2.3 Packet Pg. 69 Attachment: From Risk to Return, Investing in a Clean Energy Economy (5990 : Climate Economy Update Work Session) /5 From Risk to Return | Investing in a Clean Energy Economy Our Modeling Our conclusions are based on a sophisticated energy, economic and infrastructure planning model that compares scenarios through 2050. Each of the four pathways we modeled would achieve an 80 percent reduction in carbon emissions by 2050, and would do one of the following:1 • Rely heavily on renewable energy; • Significantly expand reliance on nuclear power; • Include a substantial amount of fossil fuel power plants with carbon capture and stor- age; or • Generate electricity from a relatively even mix of these three zero- and low-carbon resourc- es (the Mixed Resources pathway). Each pathway also assumes a different combination of transportation fuels (electricity, biofuels, and fossil fuels). For each of these pathways, we modeled changes in nationwide and sectoral energy use, electricity use, fuel use, carbon emissions, and investment. We do not endorse any specific pathway. 1 Our modeling was limited to carbon emissions (CO2) which represent 81 percent of total U.S. GHG emissions. We did not model pathways that would achieve the needed reductions in the other greenhouse gases (methane, nitrous oxide, and fluorinated gas- es). Capital Investment Needs Under our Mixed Resources pathway, we found that the total additional capital investment necessary to cut carbon emissions 80 percent economy-wide by 2050 would be2: • $220 billion per year from 2020 to 2030 • $410 billion per year between 2030 and 2040 • $360 billion per year between 2040 and 2050 These capital investments would significantly reduce fuel costs, with the savings growing every decade. The savings would be3: • $70 billion per year from 2020 to 2030 • $370 billion per year from 2030 to 2040 • $700 billion per year from 2040 to 2050 The largest additional investments would be in power generation ($55 billion per year); advanced 2 Results presented here are decadal av- erages for the Mixed Resources pathway that incorporates a variety of low-carbon energy sources, one of four pathways analyzed. All modeling results are expressed in 2014 dollars unless otherwise noted. 3 Fuel savings are based on a U.S. gov- ernment “business-as-usual” projection of fossil fuel prices in which: oil prices are $79/ bbl in 2020, escalating an average of 3.4% per year out to 2050; natural gas prices are $5/Mbtu in 2020, escalating at an average of /6 From Risk to Return | Investing in a Clean Energy Economy biofuels ($45 billion per year); purchases of advanced light duty vehicles ($75 billion per year); and energy efficiency measures ($16 billion per year). Businesses that become leaders in these sectors could see large increases in revenue in the years ahead, while those that lag behind risk being left with stranded assets. The investment needs of a transition to a clean energy economy are manageable, especially when compared to the costs that would be imposed by unmitigated climate change and continued fossil fuel dependence. They are also comparable to other recent investments, such as in unconventional oil and gas production, and in computers and software. Those investments have transformed the American economy, yielding huge returns to those businesses that led in the development of new technologies and products. 600 400 200 0 -200 -400 -600 -800 Billions of 2014$ per year 2020-2030 -65 215 -367 410 -695 357 2031-2040 2041-2050 Year Investments Fuel Expenditures Figure ES-1 depicts the annual changes (from reference case levels) in investments and fuel expenditures averaged over three decadal periods for the Mixed Resources pathway. Figure ES-1. Average Annual Additional Capital Investments and Fuel Expenditures by Decade 2.3 Packet Pg. 71 Attachment: From Risk to Return, Investing in a Clean Energy Economy (5990 : Climate Economy Update Work Session) /7 From Risk to Return | Investing in a Clean Energy Economy Regional and Sectoral Impacts Investment needs and business opportunities will vary considerably by region. For example, in our Mixed Resources pathway, new nuclear plants would likely be built in the mid-Atlantic and southern regions, while wind power would grow fastest in the windy central region, investments in solar power would be greatest in the sunny western and southern regions, and revenue from biomass feedstocks would be greatest in the Midwest. Overall, the increased investment would boost manufacturing and construction across the U.S. Roughly 460,000 additional construction jobs could be created by 2030, with the number rising to 800,000 by 2050. At the same time, reductions in fossil fuel use would further constrain coal, oil, and natural gas exploration and production. The number of coal mining and oil- and gas-related jobs could decline by more than 130,000 by 2030 and 270,000 by 2050, disproportionately affecting the specific geographic regions that currently depend heavily on these industries. We know innovation will continue as American businesses develop and deploy new technologies. Many economic sectors and communities will also respond to the challenges and opportunities presented by the transition to a clean energy economy in new and surprising ways. We can project how the costs of current technologies are likely to decline as they are developed and deployed, but we can’t predict which new technologies will emerge in the next 35 years— though we’re confident new innovations will be made. The costs of creating a clean energy economy are thus likely to be lower—and the benefits greater—than we project. Critical Role of Policy The private sector alone cannot solve the climate change problem. We know from our collective business and investment experience that the private sector will take action at the necessary speed and scale only if it is given a clear and consistent policy and regulatory framework. That framework must send a clear, consistent, and long-term market signal on the necessity of climate action, provide incentives for innovation and deployment of clean energy systems, and help society adapt to climate impacts that are inevitable due to past and current emissions. We are united in believing that the real costs of carbon emissions must be incorporated into economic decision-making in both the public and private sector, for instance, through putting a price on carbon. Government investment must also be coordinated and streamlined—and must 2.3 Packet Pg. 72 Attachment: From Risk to Return, Investing in a Clean Energy Economy (5990 : Climate Economy Update Work Session) /8 From Risk to Return | Investing in a Clean Energy Economy not subsidize or exacerbate climate-related risks and economic activities that contribute to climate change (e.g., tax incentives for fossil fuel extraction or subsidized flood insurance in high-risk areas). Policies should also help those Americans hurt by the clean energy transition, as well as those who are most vulnerable to climate impacts. America has a responsibility to lead by example. Ultimately, however, U.S. actions must be integrated into a larger global commitment to shift toward a cleaner energy economy. U.S. policies also must ensure that the competitiveness of U.S. business is not harmed. This may require border adjustments and other mechanisms to prevent other countries from seizing unfair advantages. With the right policy framework, we are confident that America can reduce the economic risks from climate change while seizing new market opportunities. But businesses must also start now to factor climate risks into their investment decisions. Whenever capital assets reach the end of their productive lives, they should be replaced with energy efficient and low-carbon alternatives wherever possible and prudent. All businesses, especially those making regular long-term, place- based infrastructure and supply chain investments, should also conduct detailed analyses of climate risks they face, build internal capacity, develop concrete action plans to address these risks, and disclose their risks and actions. The transition to a clean energy economy is already underway, but must be accelerated to avoid unacceptable risks from climate change. In the past, transformative investments in such areas as highways, rural electricity, and telecommunications have unleashed the power of innovation and American business. Investing in clean energy can ensure American economic security and competitiveness for decades to come. But to substantially reduce the growing risks of climate change, and to take maximum advantage of the opportunities in a clean energy economy, we must act now. 2.3 Packet Pg. 73 Attachment: From Risk to Return, Investing in a Clean Energy Economy (5990 : Climate Economy Update Work Session) The full report can be viewed by following the link below: https://riskybusiness.org/site/assets/uploads/sites/5/2016/10/RiskyBusiness_FromRiskToReturn. pdf 2.3 Packet Pg. 74 Attachment: From Risk to Return, Investing in a Clean Energy Economy (5990 : Climate Economy Update Work Session) Clean Jobs Colorado 1 Clean Jobs Colorado Environmental Entrepreneurs (E2) January 2017 Presented by ATTACHMENT 4 2.4 Packet Pg. 75 Attachment: Overview Clean Jobs Colorado (5990 : Climate Economy Update Work Session) Authors and Contributors About E2 Environmental Entrepreneurs (E2) is a national, nonpartisan group of business leaders, investors, and professionals from every sector of the economy who advocate for smart policies that are good for the economy and good for the environment. Our members have founded or funded more than 2,500 companies, created more than 600,000 jobs, and manage more than $100 billion in venture and private equity capital. For more informa- tion, see www.e2.org or follow us on Twitter at @e2org. About the Research and Analysis Partners BW Research Partnership is a full-service, economic and workforce research consulting firm with offices in Carlsbad, California, and Wrentham, Massachusetts. It is the nation’s leading provider of accurate, comprehensive clean energy research studies, including the National Solar Census, wind industry analyses for the National Renewable Energy Laboratory and the Natural Resources Defense Council, and state-level clean energy reports for Massachusetts, Illinois, Vermont, Iowa, and Florida, among others. The Economic Advancement Research Institute (EARI) is a nonprofit research organiza- tion focused on economic mobility and regional competitiveness. EARI is primarily focused on studying the impact of policies and systems on economic growth and prosperity across all income levels. EARI has conducted numerous labor market analyses that address key economic sectors with high probability to provide opportunities to underrepresented and disadvantaged populations. Sarah Lehmann BW Research Partnership Philip Jordan BW Research Partnership Christina Nunez E2 Susan Nedell E2 Jeff Benzak E2 Bob Keefe E2 Grant Carlisle E2 Noah Long NRDC 2.4 Packet Pg. 76 Attachment: Overview Clean Jobs Colorado (5990 : Climate Economy Update Work Session) Clean Jobs Colorado 3 Introduction Clean energy jobs flourish in Colorado: tens of thousands of workers in the state are driving the transition to a lower-carbon future. They’re installing solar panels, building and repairing wind turbines, and making buildings more efficient. The current uncertainty surrounding energy policy with 2017’s pend- ing administration changeover needn’t stall the momentum Colorado has achieved. Wind power, for example, has brought more than $4.8 billion into Colorado’s economy and supplies 16 percent of its elec- tricity.1 Xcel Energy’s new Rush Creek wind project will provide 600 megawatts of the state’s lowest-cost wind power. Solar, too, is grow- ing, with more than 382 firms in the state and $305 million in installa- tions last year alone, with more on the way.2 In eastern Colorado, 16 renewable energy facilities paid more than $7 million in property tax and $7.5 million in landowner lease payments, according to a report from regional interest group Progressive 15.3 Colorado’s renewable energy growth takes place against the back- drop of an oil and gas boom-and-bust cycle in the state over the past decade. While recent fossil fuel price drops have caused that job mar- ket to stumble, clean energy is creating a more diverse workforce and higher-quality jobs.4 5 As more businesses and homeowners seek efficient energy solutions that will save money and cut pollution, more Coloradans will find work in the state’s bustling clean energy industry. 1 http://awea.files.cms-plus.com/FileDownloads/pdfs/Colorado.pdf 2 http://www.seia.org/state-solar-policy/colorado 3 https://brianallmerradionetwork.wordpress.com/2016/10/17/10-17-16-progressive-15-colorados-eastern-plains-a- renewable-energy-economic-hub-according-to-new-report/ 4 http://www.denverpost.com/2016/03/14/oil-gas-losses-dont-derail-51-month-employment-growth-streak/ 5 http://www.dblpartners.vc/resource/clean-energy-employment-booming-creates-a-more-diverse-workforce-and-higher- quality-jobs/ 2.4 Packet Pg. 77 Attachment: Overview Clean Jobs Colorado (5990 : Climate Economy Update Work Session) Clean Jobs Colorado 4 Quick Facts 62,clean energy 071 workers in Colorado 65% of clean energy jobs are in energy efficiency Overall Clean Energy Jobs Fig. 1: Clean energy jobs breakdown by sector Colorado’s clean energy industry is significant and growing, employing more than 62,000 workers in 2015. From energy efficiency to renewables to clean fuels and other markets, the sector is helping drive the Centennial State’s thriving overall economy, which is among the top five U.S. states in real gross domestic product growth.6 Employers expect the clean energy sector to grow 2 percent over the next year, adding 1,474 more jobs. The majority of Colorado’s clean energy jobs come from a diverse field of energy efficiency firms. Of 2,483 businesses in clean energy, nearly two-thirds offer energy efficiency ser- vices, accounting for 40,335 jobs. Renewable energy is the second-largest category, representing 22.6 percent of clean energy businesses, followed by fuels including non-woody biomass (5 percent), motor vehicles including electric vehicles, or EV’s, (4 percent) and energy storage and the smart grid (3.5 percent). Colorado firms that work with clean energy tech overwhelmingly rely on it as an income stream. Seventy-two percent say they generate most or all of their revenue from advanced energy activity. Most clean energy companies in Colorado are small: Nearly 88 percent of the firms employ less than 50 staff, 6 percent have 50–100 employees, and 6 percent have over 100 employees. 6 http://www.bea.gov/newsreleases/regional/gdp_state/qgsp_newsrelease.htm 65% Energy Efficiency 22.6% Renewable Energy 4.0% Motor Vehicles 5.0% Fuels 3.5% Storage/ Smart Grid 2% anticipated growth in clean energy jobs 2.4 Packet Pg. 78 Attachment: Overview Clean Jobs Colorado (5990 : Climate Economy Update Work Session) Clean Jobs Colorado 5 Fig. 2: Clean energy jobs for each county Fig. 3: Clean energy jobs by congressional district County Employment Adams 4,899 Alamosa 113 Arapahoe 11,270 Archuleta 150 Baca 16 Boulder 2,756 Broomfield 708 Chaffee 177 Cheyenne 11 Clear Creek 99 Conejos 16 Costilla 21 Custer 48 Delta 166 Denver 15,433 Dolores 38 County Employment Douglas 3,384 Eagle 499 El Paso 1,484 Elbert 255 Fremont 113 Garfield 467 Gilpin 57 Grand 172 Gunnison 123 Hinsdale 16 Huerfano 21 Jackson 32 Jefferson 9,826 Kiowa 38 Kit Carson 91 La Plata 783 County Employment Lake 32 Larimer 2,365 Las Animas 113 Lincoln 59 Logan 177 Mesa 1,094 Mineral 5 Moffat 118 Montezuma 177 Montrose 311 Morgan 177 Otero 70 Ouray 59 Park 311 Phillips 38 Pitkin 397 County Employment Prowers 113 Pueblo 579 Rio Blanco 113 Rio Grande 54 Routt 263 Clean Jobs Colorado 6 Upper House District Employment 1 2,455 2 715 3 505 4 5,031 5 1,455 6 1,494 7 1,120 8 1,455 9 649 10 179 11 343 12 20 13 494 14 917 15 1,175 16 7,858 17 1,653 18 714 19 3,175 20 1,769 21 4,538 23 362 24 275 25 1,261 26 3,219 27 2,697 28 261 29 290 30 797 31 4,524 32 2,842 33 841 34 6,307 35 681 Lower House District* Employment 1 1,358 2 4,088 3 6,776 4 1,556 5 6,990 6 2,516 7 829 9 843 10 1,911 11 585 12 677 13 1,873 14 274 15 196 16 380 17 425 18 70 19 173 20 8 21 3 22 2,065 Clean Jobs Colorado 7 Quick Facts Fig. 6: Energy efficiency subtechnologies 5.9% High AFUE HVAC 25.3% Advanced Building Materials and Insulation 22.9% Efficient Lighting 7.9% Renewable Heating and Cooling 9.8% Other 10.6% Energy Star Appliances 17.7% Traditional HVAC 1/4 of all Colorado energy efficiency jobs are in advanced building materials and insulation While energy efficiency is the bedrock of Colorado’s clean tech economy, a closer look reveals the services in this space are quite diverse. Companies are improving building insulation, providing smarter lighting and appliances, and supplying improved heating and cooling systems. Of seven efficiency technology groupings, four of them—Advanced Building Materials and Insulation (10,191 jobs), Efficient Lighting (9,231), Traditional HVAC (7,140), and Energy Star Appliances (4,269)—each contain at least 10 percent of all energy efficiency jobs and together account for three-fourths of all energy efficiency workers. The remaining indus- tries employ an additional 9,500 workers. Energy Efficiency Jobs 2.4 Packet Pg. 81 Attachment: Overview Clean Jobs Colorado (5990 : Climate Economy Update Work Session) The full report can be viewed by following the link below: https://www.e2.org/wp-content/uploads/2017/01/FINAL_CleanJobsCO.pdf 2.4 Packet Pg. 82 Attachment: Overview Clean Jobs Colorado (5990 : Climate Economy Update Work Session) 1 Proposal for the Development of a Colorado State University Foundation Green Revolving Fund Executive Summary: Colorado State University (CSU) is a recognized leader in sustainability and clean energy research, and with its January 2017 commitment to source 100% of its electricity from renewable sources by 2030, CSU has moved to the leading edge of implementation in these fields among American Universities. CSU was founded in 1870 and like other major land-grant universities established in the 19P th P century, many of its current campus buildings were constructed decades ago. As a result, some CSU properties are both expensive to operate, and may not meet current standards for energy efficiency or building health (e.g. lighting, air exchange etc.). For that reason, in recent years CSU’s faculty and talented staff have investigated and / or piloted a number of financing mechanisms to upgrade the efficiency and performance of campus facilities; however more capital is required for needed efficiency and renewable energy upgrades on campus. The university holds a $425M endowment portfolio, through the Colorado State University Foundation (“the Foundation”), an affiliated 501 (c) 3 non-profit that actively manages a variety of financial products and instruments on behalf of CSU. According to the Foundation’s most recent financial disclosures (June 2016), its portfolio is designed to generate “returns equivalent to the 7% - 10% produced by the S&P 500 index…with moderate riskP0F 1 P”. Investment gains realized by the endowment are then earmarked to pay for: i) a 2% annual management fee and; ii) a 4.5% annual expenditure in school facilities, educational programs, and other investments designed to benefit CSU, its students and faculty. The City of Fort Collins Economic Health Office (EHO) believes that there is a significant opportunity for the Foundation to deploy a small fraction of the cash / cash equivalents currently held in the endowmentP1F 2 P in a new and innovative UGreen Revolving Fund (GRF)U to self-finance major energy efficiency upgrades to existing CSU buildings. The city’s Economic Health Office, and affiliated national subject matter experts are working on related projects, and are prepared to provide pro-bono technical assistance to help CSU develop a new GRF for the CSU Foundation. Such a fund would not only benefit CSU and the CSU Foundation, but also the city, as energy efficiency gains made by CSU would help both the university and the City of Fort Collins achieve our ambitions Climate Action Plan goals for reducing greenhouse gas (GHG) emissions. GRFs invest in energy efficiency projects to reduce energy consumption and cost and then reinvest the money saved in future energy efficiency projects. They are called “revolving funds” because the funds loan money to specific energy efficiency projects, which then repay the loans through an internal accounting transfer from the (energy cost) savings realized in the institution’s utilities budget. CSU can achieve reductions in operating expenses and greenhouse gas emissions, while creating regenerating funds for future projectsP2F 3 P. A CSU GRF would generate financial returns that meet or exceed those 1 Since nearly the founding of CSU (1871) the S&P 500 has actually returned approximately 5.63% to 5.85% annually (Cornerstone Investment Services, LLC). According to publically available financial returns (www.foundation.colostate.edu/public-information), CSU’s endowment appears to produce average annual returns of about 5.21%. 2 Ibid; $7.65M as of June 2016 3 Sustainable Endowments Institute; http://www.endowmentinstitute.org ATTACHMENT 5 2.5 Packet Pg. 83 Attachment: CSU Green Revolving Fund (5990 : Climate Economy Update Work Session) 2 currently enjoyed by the Foundation, do so with less risk, and substantially reduce annual utility and facilities operating expenses while improving the “built environment” for students, faculty and staffP3F 4 P. As part a CSU GRF effort, the university could join the 34TUBillion Dollar Green ChallengeU34T, encouraging colleges, universities, and other nonprofit institutions to invest a combined total of $1B in self-managed green revolving funds that finance energy efficiency improvements. Over 75 American universities have invested in GRFs, including other land-grant universities such as the University of Wisconsin, the University of Minnesota, Oregon State, and dozens of other public and private schools, including CU Boulder, DU, Harvard and Princeton. Several CSU “peer universities” report impressive financial 0Treturns from their endowment’s GRFs; ranging from 29% (Iowa State University) to more than 47% (Western Michigan University). These results are consistent with research conducted by Sightlines, which examined data from the National Association of College and University Business Officers (NACUBO) and the Intentional Endowments Network, and found that “investing in energy efficiency and clean energy projects can yield significantly higher annual returns than traditional endowment investments”0TP4F 5 P0T. 0TCSU’s endowment value-per-student is approximately 0T$12,800, which puts the university’s endowed resources squarely in the median in terms of assets available for investment in a GRFP5F 6 P. In other words, a GRF is not a tool solely for schools like Harvard / Yale / Princeton with multi-billion dollar endowed reserves. On average, comparable universities with endowment capitalized GRFs typically apply 0.1% to 2% of assets under management to the new green revolving funds. In the case of CSU, similar allocations would result in a GRF of approximately $286,000 to $5,800,000. On average, comparable universities applied 0.5% of assets under management to the new green revolving funds. At this level, a GRF for CSU would be approximately $1,400,000. The potential benefits of a CSU GRF include:  The CSU Foundation sees attractive returns on very safe investments (energy efficiency projects with a guaranteed return on investment);  The university improves its facilities and enjoys lower operating costs;  Student learning and staff productivity are enhanced with healthier living and work spaces; 4 Mark Orlowski and Mitchell Thomashow, “The Virtuous Cycle of Green Revolving Funds”, Association of Governing Boards of Universities and Colleges, Trusteeship Magazine, June 2015. 5 http://www.sightlines.com/insight/making-business-case-campus-sustainability 6 Principal Author: Emily Flynn, Contributing Authors: Mark Orlowski, Dano Weisbord, Greening the Bottom Line 2012, October 30, 2012; http://greenbillion.org/resources/#reports 2.5 Packet Pg. 84 Attachment: CSU Green Revolving Fund (5990 : Climate Economy Update Work Session) 3  CSU advances its “green” and “sustainable” bona fidesP6F 7 P, which over time may attract more qualified students, additional research funding, and high-profile faculty;  New educational and research opportunities will be created;  CSU and Fort Collins benefits from local job creation and increased economic development;  CSU and the community achieve shared GHG reduction goals. The Business Case for a Self-Managed CSU GRF: Opportunities for financially attractive energy efficiency improvement projects exist campus-wide. In FY16, CSU spent approximately $17M on energy for heating, lighting and the operation of computers and other office and research equipment, and approximately $3M for waterP7F 8 P. A good portion of this expenditure is consumed by inefficient buildings and building systems. This GRF fund and its investments (energy efficiency retrofits and other campus infrastructure improvements) would align with the long-term objectives of the CSU Foundation and the university’s stated sustainability goals, while improving the quality of the built environment on campus. Additional positive factors to consider include:  CSU Facilities Management have indicated that they can identify and deliver energy efficiency upgrades that are safe, high quality investments;  CSU could also choose to partner with energy saving performance contractors, or ESPCs, that can provide financial guarantees for the energy savings performance of projects they manage, backed by stout private-sector balance sheets and cash reserves;  The University is unlikely to default on repaying the Foundation, and a 6% coupon would keep pace with or even outperform the running five year average return for the CSU endowment;  A GRF provides “green” portfolio diversification that is low-risk and financially attractive. Recommendations:  CSU to join the Billion Dollar Green Challenge;  Pilot a CSU-endowment investment in a new GRF, in order to support a single, larger pilot energy efficiency project within a University-owned facility. This could include the planned upgrades to the Moby Arena. UThe City of Fort Collins Economic Health Office is ready to provide pro-bono assistance to CSU to help it develop a GRFU. CSU success in this area also means success for Fort Collins, as the University’s energy efficiency, renewable energy and sustainability goals align with the City’s climate action framework and economic health objectives.  Use existing research and data collection expertise at CSU to gather data from pilot projects regarding financial and non-financial benefits of building upgrades;  After documented success in one or more GRF pilots, scale the GRF to help achieve sustainability objectives and position the university as a national leader in this space. 7 For example: CSU is ranked #4” in the 2016 Princeton Review’s list of the Top 50 Green Colleges https://www.princetonreview.com/college- rankings?rankings=top-50-green-colleges; #11 in the Sierra Club’s list of Cool Schools http://sierraclub.org/sierra/2016-5-september- october/cool-schools-2016/full-ranking; and was listed #1 by the Chronicle of Higher Education’s Top-Performing Institutions for Sustainability, 2016 http://www.chronicle.com/article/Table-Top-Performing/238749 8 CSU Facilities data, August 2017 2.5 Packet Pg. 85 Attachment: CSU Green Revolving Fund (5990 : Climate Economy Update Work Session) 1 Climate Economy Update - Council Work Session Jackie Kozak Thiel, Josh Birks, and Sean Carpenter October 10, 2017 ATTACHMENT 6 2.6 Packet Pg. 86 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) Questions for City Council § What overall feedback does Council have regarding the systems- based approach of the Climate Economy Action Plan? § What direction would Council give regarding the tactic of developing strategies while we also seek “quick wins”? 2 2.6 Packet Pg. 87 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) What is the “Climate Economy”? 3 Access to capital for private investment Structured Innovation to solve wicked problems Achieve Climate Action Plan goals Grow businesses, entrepreneurship & employment 2.6 Packet Pg. 88 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) U.S. Economy at Inflection Point Fort Collins Weekly Courier article from 1899: "Despite electric cars, bicycles and automobiles, the horse is bound to be a big factor in Twentieth century civilization...Yes, indeed, the horse is here to stay.” 4 2.6 Packet Pg. 89 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) Decoupling Prosperity from Carbon 5 -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Fort Collins Gross Metropolitan Product (GMP) and Carbon Emissions GMP Carbon emissions 2.6 Packet Pg. 90 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) Climate Economy Impacts § Foundation for a clean energy-driven economy in Northern Colorado § Align business and local talent § Strengthen Triple-Helix partnerships § Advance social equity objectives § Enhance innovation ecosystem 6 2.6 Packet Pg. 91 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) Quick Wins § 2017 Bloomberg Mayor’s Challenge § C-PACE § CSU Green Revolving Fund § Deployment of “Spark Fund” § Integration with City as a Platform § Colorado Smart Cities Alliance 7 2.6 Packet Pg. 92 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) Climate Economy Timeline 8 • National search for Climate Economy Expertise • Current State Assessment • Stakeholder Convening • Focus Areas • Develop Strategy • Define Metrics • Identify “Quick Wins” • Strategic Action Plan by Focus Area Phase 1: Analysis Phase 2: Design Phase 3: Implementation Phase 4: Review & Modify • Implement non BFO items • Budget for Outcomes • Integrate Actions into Climate Action Plan • Periodic Status Reports • Regular Review of Approach • Improve Tools and Strategies as Identified • Continual Iteration with Triple Helix Stakeholders 2.6 Packet Pg. 93 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) Stakeholder Engagement Triple-Helix Partners Internal Staff Boards & Commissions 9 Very supportive of the approach taken by the Climate Economy Action Plan Businesses want to play a role in achieving sustainability goals Desire tools and additional partnership opportunities with the City Fort Collins is positioning itself as a world leader in the Climate Economy 2.6 Packet Pg. 94 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) 10 Next steps • Additional stakeholder engagement - ongoing • Pursue Quick Wins - ongoing • Phase 2 Design – Complete Q1 2018 • Phase 3 Implementation – Begin Q2 2018 Next steps • Additional stakeholder engagement - ongoing • Pursue Quick Wins - ongoing • Phase 2 Design – Complete Q1 2018 • Phase 3 Implementation – Begin Q2 2018 2.6 Packet Pg. 95 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) Questions for Council § What overall feedback does Council have regarding the systems- based approach of the Climate Economy Action Plan? § What direction would Council give regarding the tactic of developing strategies while we also seek “quick wins”? 11 2.6 Packet Pg. 96 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) 12 BACKUPS 2.6 Packet Pg. 97 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) Quick Wins: Efficiency Loan Programs 13 § Efficiency Loan Programs o Clean Energy Credit Union o On-Bill Finance 2.0 draft 2.6 Packet Pg. 98 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) Quick Wins: Crowdfunding 14 § Crowd Funding: Community Funded § Impact Bonds to lower borrowing costs: Neighborly 2.6 Packet Pg. 99 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) Climate Economy: Why PPPs? 15 2.6 Packet Pg. 100 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) 16 66% 19% 11% 2% 1% 0.5% 2016 Fort Collins Resource Mix Coal Hydro Wind Purchases Solar Gas 2.6 Packet Pg. 101 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) Leadership Direction: How We Got Here 17 Timeline: 2.6 Packet Pg. 102 Attachment: Powerpoint presentation (5990 : Climate Economy Update Work Session) DATE: STAFF: October 10, 2017 Tim McCollough, Light and Power Operations Manager Kevin Gertig, Utilities Executive Director Lisa Rosintoski, Utilities Customer Connections Manager WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Fort Collins and Organized Energy Markets. EXECUTIVE SUMMARY The purpose of this item is to provide an update to Council on the potential of Platte River Power Authority (Platte River) entering an organized energy market. Platte River is actively participating with a group of six other regional utilities, the Mountain West Transmission Group, examining the benefits and risks of forming an organized market in a region that would cover most of Colorado and portions of Arizona, New Mexico, Wyoming, and South Dakota. This potential market would include a common regional transmission tariff and market rules that would facilitate buying and selling electricity across the region. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Staff is seeking feedback on what additional information Council needs regarding the formation of an Organized Energy Market. BACKGROUND / DISCUSSION Mountain West Transmission Group In early 2013, seven electric service providers formed the Mountain West Transmission Group to evaluate several future options including considering membership in an organized energy market. Organized energy markets are commodity markets that deal specifically with the trade and supply of energy from all types of fuel sources, including renewables. Table 1.0: Mountain West Transmission Group Members Entity Revenue ($) Peak (MW) Energy (MWh) Public Service Company of Colorado (PSCo or Xcel) 220,662,842 5,680 33,024,691 Western Area Power Administration (WAPA) Colorado River Storage Project (CRSP) 69,097,743 1,424 5,185,539 Loveland Area Projects (LAP) 65,198,148 710 2,534,139 Tri‐State Generation and Transmission Association 117,460,625 1,934 12,607,330 Black Hills Corporation’s three electric subsidiaries: Black Hills Power (BHP) 30,899,530 859 4,892,644 Black Hills Colorado Electric Utility Company (BHCE) 8,203,959 110 638,352 Cheyenne Light Fuel & Power Company (Cheyenne) 6,848,030 193 1,330,174 Colorado Springs Utilities (CSU) 24,025,218 661 4,374,955 Platte River Power Authority (Platte River) 39,923,267 510 3,251,514 Basin Electric Power Cooperative (BEPC) 8,203,959 110 638,352 In early 2017, the Mountain West Transmission Group announced consensus on holding discussions with the existing Southwest Power Pool (SPP). On September 22, 2017, the group announced it had completed initial discussions with the Southwest Power Pool’s management team concerning membership in the SPP Regional Transmission Organization (RTO). 3 Packet Pg. 103 October 10, 2017 Page 2 The Mountain West Transmission Group will next commence negotiations with SPP through a public stakeholder process. The months-long process by which SPP stakeholders must approve changes needed for the addition of new members will involve the RTO’s nearly 100 member companies working through SPP’s organizational group structure. If the outcome of the negotiations is a decision to move forward with joining the SPP, the Mountain West participants would expect to make filings with the Federal Energy Regulatory Commission in mid-2018. Integration into SPP, if pursued by the group, may occur in late 2019. Platte River Power Authority, by consensus of its member owner municipalities, will ultimately need to evaluate whether potential membership is beneficial to the four cities owned by Platte River. Benefits and Risks The identified benefits and risks of Platte River joining the Southwest Power Pool are reflected below. However, a comprehensive study will be managed to quantify as part of the decision making process. Benefits  Reliably integrate a greater amount of renewable energy resources  Potentially reduce the output of coal generation regionally  Reduce wholesale energy costs  Reduce planning margins (15% --> 12%)  Reduce reserve costs  Create market transparency Risks  Participants must give up some planning control  Participants will incur greater FERC regulation  Transmission Cost Allocations Public Outreach Platte River Power Authority has presented details on the benefits and risks in becoming a member of an energy market to the Fort Collins Energy Board and the Fort Collins Chamber of Commerce. Thus far key feedback has been generally positive based on the anticipated benefits of joining an Organized Energy Market. Utilities staff will continue to partner with Platte River on reaching key stakeholders in the Fort Collins community, including boards and commissions. ATTACHMENTS 1. Powerpoint presentation (PDF) 3 Packet Pg. 104 1 Fort Collins and Organized Energy Markets Tim McCollough, Light & Power Operations Manager October 10, 2017 ATTACHMENT 1 3.1 Packet Pg. 105 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) Energy Markets Today 2 3.1 Packet Pg. 106 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) 3 Mountain West Transmission Group 3.1 Packet Pg. 107 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) 4 New Potential Market 3.1 Packet Pg. 108 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) How It Works Today 5 3.1 Packet Pg. 109 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) Organized Energy Market How it Would Work 6 3.1 Packet Pg. 110 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) Potential Wholesale Benefits 7 • Increased Renewables Opportunity 3.1 Packet Pg. 111 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) Potential Wholesale Benefits 8 • Increased Renewables Opportunity • Reduce Coal Generation Regionally 3.1 Packet Pg. 112 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) Potential Wholesale Benefits 9 • Increased Renewables Opportunity • Reduce Coal Generation Regionally • Reduce Wholesale Energy Costs • Reduce Planning Margins • Reduce Reserve Costs (Spinning, Non- spinning, Wind) 3.1 Packet Pg. 113 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) Potential Wholesale Benefits 10 • Increased Renewables Opportunity • Reduce Coal Generation Regionally • Reduce Wholesale Energy Costs • Reduce Planning Margins • Reduce Reserve Costs (Spinning, Non-spinning, Wind) • Market Transparency 3.1 Packet Pg. 114 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) Potential Risks 11 • Give up some planning control • Future cost allocation 3.1 Packet Pg. 115 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) Mountain West Timeline 12 3.1 Packet Pg. 116 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) Timeline 13 2017 2017/ 2018 Public outreach Mid 2018 Mid 2018 Platte River Federal Energy Regulatory Commission filing Platte River Board decision 3.1 Packet Pg. 117 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) Council Feedback 14 • What additional information does Council need regarding the formation of an Energy Market? 3.1 Packet Pg. 118 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) Electric Interconnections in North America 15 3.1 Packet Pg. 119 Attachment: Powerpoint presentation (5986 : Fort Collins and Organized Energy Markets) 23 2,027 24 1,801 25 572 26 1,040 27 1,187 Fig. 4: Clean energy jobs by Upper House district * Due to an editing error, a previous version of Clean Jobs Colorado contained incorrect jobs totals for District Nos. 1, 4, 22, and 23, and omitted District No. 28. Fig. 5: Clean energy jobs by Lower House district Clean Energy Jobs by Legislative District Lower House District* Employment 28 1,915 29 343 30 3,774 31 272 32 257 33 629 34 86 36 643 38 643 39 3,231 46 357 47 325 48 1,565 49 1,733 50 43 54 1,197 56 179 57 569 58 655 59 1,050 60 325 61 671 62 260 63 206 64 547 65 374 2.4 Packet Pg. 80 Attachment: Overview Clean Jobs Colorado (5990 : Climate Economy Update Work Session) Saguache 32 San Juan 16 San Miguel 86 Sedgwick 16 Summit 284 Teller 53 Washington 43 Weld 1,544 Yuma 91 Clean Energy Jobs by County Like most industries in the state, the largest share of clean energy positions is centered in Denver and surrounding densely populated counties—Denver, Arapahoe and Jefferson. Still, nearly every county, congressional district, and state legisla- tive district is home to a clean energy workforce. After the Denver metro area (46,244 jobs), Boulder and Fort Collins-Loveland have the most clean energy workers (2,757 and 2,365 respectively). Greeley and Colorado Springs each have more than 1,500 workers, with Grand Junction (1,105) and Pueblo (579) rounding out the metro locations. Beyond cities, the state’s more rural counties employ a total of 5,937 in clean energy. Other counties with more than 2,000 energy jobs include Adams (4,899), Arapahoe (11,270), Boulder (2,756), Denver (15,443), Douglas (3,384), Jefferson (9826), and Larimer (2,365). Clean Energy Jobs by Congressional District Congressional District Employment 1 24,998 2 8,204 3 5,566 4 14,012 5 1,686 6 3,581 7 4,024 2.4 Packet Pg. 79 Attachment: Overview Clean Jobs Colorado (5990 : Climate Economy Update Work Session) 2.7% per year out to 2050; and coal prices are $1.9/Mbtu in 2020, escalating at an average of 1.4% per year out to 2050. The analysis also explores a scenario in which a global shift to clean energy results in lower fossil fuel prices as demand decreases. 2.3 Packet Pg. 70 Attachment: From Risk to Return, Investing in a Clean Energy Economy (5990 : Climate Economy Update Work Session) governments will need to commit to a just transition. Not all climate policies are win-win, and some trade-offs are inevitable, particularly in the short term. Although many jobs will be created, and there will be larger markets and profits for many businesses, some jobs will also be lost, particularly in high-carbon sectors. The human and economic costs of the transition should be managed through support for displaced workers, affected communities and low-income households. Strong political leadership and the active participation of civil society will be needed, along with far-sighted, enlightened business decisions. The wealth of evidence presented by the report shows that there is now huge scope for action which can both enhance growth and reduce climate risk. Leading businesses, cities and countries are showing how this can be done. The world’s economic leaders face a remarkable opportunity to set the world on the path to sustainable prosperity. The prize is immense, and the moment of decision is now. We can achieve both better growth and a better climate. 2.1 Packet Pg. 60 Attachment: Better Growth - Better Climate: The New Climate Economy Report (5990 : Climate Economy Update Work Session) improved quality of life, stronger resilience to climate change and environmental protection. Many can help reduce poverty. In the 15 countries with the highest greenhouse gas emissions, the damage to health from poor air quality, largely associated with the burning of fossil fuels, is valued at an average of over 4% of GDP. Many countries are now recognising the costs of a high- carbon model of development. Managed well, the additional investments in infrastructure needed to make the transition to a low- carbon economy will be modest. The infrastructure requirements for a high-carbon economy, across transport, energy, water systems and cities, are estimated at around US$90 trillion, or an average of US$6 trillion per year over the next 15 years. By combining renewable energy with reduced fossil fuel investment, more compact cities, and more efficiently managed energy demand, low-carbon infrastructure will increase investment requirements by only an estimated US$270 billion a year. These higher capital costs could potentially be fully offset by lower operating costs, for example from reduced expenditure on fuel. Investing in a low-carbon economy is a cost-effective form of insurance against climate risk. The report proposes a 10-point Global Action Plan of key recommendations. This asks decision-makers to: 1. Accelerate low-carbon transformation by integrating climate into core economic decision- making processes. This is needed at all levels of government and business, through systematic changes to policy and project assessment tools, performance indicators, risk models and reporting requirements. 2. Enter into a strong, lasting and equitable international climate agreement, to increase the confidence needed for domestic policy reform, provide the support needed by developing countries, and send a strong market signal to investors. 3. Phase out subsidies for fossil fuels and agricultural inputs, and incentives for urban sprawl, to drive more efficient use of resources and release public funds for other uses, including programmes to benefit those on low incomes. 4. Introduce strong, predictable carbon prices as part of good fiscal reform and good business practice, sending strong signals across the economy. 2.1 Packet Pg. 59 Attachment: Better Growth - Better Climate: The New Climate Economy Report (5990 : Climate Economy Update Work Session) costs. As pioneering cities across the world are demonstrating, more compact and connected urban development, built around mass public transport, can create cities that are economically dynamic and healthier, and that have lower emissions. Such an approach to urbanisation could reduce urban infrastructure capital requirements by more than US$3 trillion over the next 15 years. • Land use productivity will determine whether the world can feed a population projected to grow to over eight billion by 2030, while sustaining natural environments. Food production can be increased, forests protected and land use emissions cut by raising crop and livestock productivity, using new technologies and comprehensive approaches to soil and water management. Restoring just 12% of the world’s degraded agricultural land could feed 200 million people by 2030, while also strengthening climate resilience and reducing emissions. Slowing down and ultimately halting deforestation can be achieved if strong international support is combined with strong domestic commitment to forest protection and rural income development. • Energy systems power growth in all economies. We are on the cusp of a clean energy future. Coal is riskier and more expensive than it used to be, with growing import dependence and rising air pollution. Rapidly falling costs, particularly of wind and solar power, could lead renewable and other low-carbon energy sources to account for more than half of all new electricity generation over the next 15 years. Greater investment in energy efficiency – in businesses, buildings and transport – has huge potential to cut and manage demand. In developing countries, decentralised renewables can help provide electricity for the more than one billion people without access. Across all these systems, three “drivers of change” need to be harnessed to overcome market, policy and institutional barriers to low-carbon growth: • Raising resource efficiency is at the heart of both growth and emissions reduction. In many economies, both market and policy failures distort the efficient allocation of resources while simultaneously Executive Summary 2.1 Packet Pg. 58 Attachment: Better Growth - Better Climate: The New Climate Economy Report (5990 : Climate Economy Update Work Session) catalyse action to achieve both better growth and a better climate. It proposes practical measures which can be taken not just by national governments, but by cities and regional authorities, businesses, communities and international organisations. The Commission and the New Climate Economy project remain committed to engaging further with all those interested in these issues. The need is urgent, for decisions made today and over the next few years will determine the future course of both economic growth and climate change. World leaders will come together in 2015 to decide on new goals for sustainable development and to achieve a new climate agreement. At home they will continue to make vital economic decisions. As they do so, we hope they will consider seriously the research and recommendations presented in this report. Preface FELIPE CALDERÓN Chair of the Global Commission on the Economy and Climate JEREMY OPPENHEIM Global Programme Director of the New Climate Economy project NICHOLAS STERN Co-Chair of the Global Commission and Chair of the Economics Advisory Panel 2.1 Packet Pg. 57 Attachment: Better Growth - Better Climate: The New Climate Economy Report (5990 : Climate Economy Update Work Session) Engagement Spectrum.  Create a “How to start a business” roadmap to be shared throughout the City and supporting organizations, so everyone communicates the same path.  Website changes to reflect the observations and recommendations from the BEAP current state assessment  Develop a communication plan in conjunction with Transportation and Utilities for construction projects that can interrupt service or impact business. Provide options and support before project begins, up to one year in advance if possible.  Convene Transfort, DBA and Chamber to improve the Passfort process, making it easier for the pass-through 1.2 Packet Pg. 11 Attachment: Current State Assessment-Phase 1 (5989 : Business Engagement Action Plan)  Downtown Business Association Interaction Discussion Items  Background of the project  Departments Involved  Partnerships and Industries Involved  What Worked?  What Didn’t?  Lessons Learned 1.2 Packet Pg. 9 Attachment: Current State Assessment-Phase 1 (5989 : Business Engagement Action Plan) Questions Segmentation Analysis  How do you define/segment your customers?  What relationship do you want with your customers/what level? ATTACHMENT 2 1.2 Packet Pg. 8 Attachment: Current State Assessment-Phase 1 (5989 : Business Engagement Action Plan)