Focus on the Regional Economy and The Green/Carbon Economy - PowerPoint PPT Presentation

focus on the regional economy and the green carbon economy n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Focus on the Regional Economy and The Green/Carbon Economy PowerPoint Presentation
Download Presentation
Focus on the Regional Economy and The Green/Carbon Economy

play fullscreen
1 / 98
Download Presentation
Focus on the Regional Economy and The Green/Carbon Economy
172 Views
terra
Download Presentation

Focus on the Regional Economy and The Green/Carbon Economy

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. Focus on the Regional EconomyandThe Green/Carbon Economy

  2. WelcomeMary RyanNutter McClennen & Fish LLP

  3. Upcoming Programming • May 9 – Regional Environmental Summit – Climate Change/Green Economy • May 13 – EBC C & D Committee • May 15 – EBC Wind Energy Development Committee • May 19 – EBC RI Breakfast – US Senator Whitehouse • May 22 – EBC Solid Waste Forum – Jim Colman • May 29 – Land Based Wind Energy – 2nd Session • June 5 – EBEE Awards Celebration • June 20 – Breakfast Program w/ Deerin Babb-Brott • June 23 – LID Conference • July 11 – 3rd Annual EBC Ocean Management Conference - Climate Change Impacts on Ocean and Coastal Resources

  4. EBC Member Survey Regarding strategic issues/challenges, please rank each of the following in terms of importance to your company over the next three years. 1 - not important, 9 very important • Hiring/Recruiting/Retaining Staff 7.86 • Business Development 7.86 • Economy - Domestic 7.70 • Growth 7.18 • Energy Industry Trends 6.82 • Environmental Industry Trends 6.00 • Economy - Global 6.00 • Regulatory/Legislative Developments 5.27 • Company Operational Issues 5.00

  5. Member Survey – Early 08 On a scale of 1 to 5, how strong was your company's business activity in 2007? WEAK STRONG 1. 0.0% 2. 5.9% 3. 23.5% 4. 41.2% 5. 29.4% On a scale of 1 to 5, how strong do you anticipate your company's business activity will be in the 1st quarter of 2008? WEAK STRONG 1. 0.0% 2. 8.7% 3. 17.4% 4. 52.2% 5. 21.7%

  6. The New England Regional Economic OutlookBo Zhao Economist Federal Reserve Bank of Boston

  7. Bo Zhao, Senior Economist New England Public Policy Center Federal Reserve Bank of Boston Presented to the Environmental Business Council of New EnglandThe “Focus on the Regional Economy and the Green/Climate Change Economy” Event May 8, 2008 The views expressed in the presentation are not necessarily those of either the Federal Reserve Bank of Boston or the Federal Reserve System. Regional Economic Overview

  8. Overview • Job market • Personal income • Housing market • Prices and consumer confidence • Economic outlook

  9. New England employment slipped I Monthly Employment Change in New England Thousands of Jobs Source: U.S. Bureau of Labor Statistics.

  10. The year-over-year employment growth was small Percent Change fromYear Earlier United States New England Source: U.S. Bureau of Labor Statistics.

  11. Rhode Island isexperiencing large job losses Percent Change from Year Earlier Maine Rhode Island Last 12 months: -2.0% Last 12 months: +0.1% Source: U.S. Bureau of Labor Statistics. Source: U.S. Bureau of Labor Statistics.

  12. CT’s and VT’s labor markets are weakening Percent Change from Year Earlier Vermont Connecticut Last 12 months: +0.6% Last 12 months: +0.08% Source: U.S. Bureau of Labor Statistics. Source: U.S. Bureau of Labor Statistics.

  13. MA and NH have continuing and steady job growth Percent Change from Year Earlier Massachusetts New Hampshire Last 12 months: +0.7% Last 12 months: +1.5% Source: U.S. Bureau of Labor Statistics. Source: U.S. Bureau of Labor Statistics.

  14. Employment growth by industry: mixed results Percent Change, March 2007 – March 2008 (Seasonally Adjusted) 1 1 1 New England data for CT, MA, and NH. Seasonally adjusted data are not available for ME, RI, or VT. Source: U.S. Bureau of Labor Statistics.

  15. NE unemployment rate increased, but was still below the national average Percent United States New England Source: U.S. Bureau of Labor Statistics.

  16. Unemployment rates within New England Percent Source: U.S. Bureau of Labor Statistics.

  17. Jobpostings in print ads were down Help Wanted Index Index 1987 =100 United States New England Source: The Conference Board.

  18. Online job postings fell sharply Percent change in total online postings,April 2007 – April 2008 Source: Bureau of Economic Analysis.

  19. Personal income growth slowed Percent Change from Year Earlier United States New England Source: Bureau of Economic Analysis.

  20. Personal income growth within the region: mixed performance Percent Change, Q4 2006 – Q4 2007 Source: Bureau of Economic Analysis.

  21. Per capita personal income levels and growth Source: Bureau of Economic Analysis.

  22. House prices continued to be soft Percent Changefrom Year Earlier OFHEO House Price Purchase Only Index United States New England Source: Office of Federal Housing Enterprise Oversight / Haver Analytics.

  23. Boston had a smaller decrease in home pricesthan some major metro areas S&P Case-Shiller Home Price Index Percent Change, February 2007 – February 2008 Source: S&P Case-Shiller / Haver Analytics.

  24. NE single-family housing permits continued to fall Index, 1988 = 1 United States New England Source: U.S. Census Bureau

  25. NE multi-family housing permits were down even more Index, 1988 = 1 United States New England Source: U.S. Census Bureau

  26. Boston inflation rate was lower than the national average Percent Change from Year Earlier Consumer Price Index United States Boston Source: U.S. Bureau of Labor Statistics.

  27. Price changes in major expenditure categories Consumer Prices Percent Change, March 2007 – March 2008 Source: U.S. Bureau of Labor Statistics.

  28. Consumer confidence remained weak 1985 U.S. Average = 100 United States New England Source: U.S. Bureau of Labor Statistics.

  29. Outlook for the New England employment: slow growth Source: NEEP

  30. Summary • The New England economy is slipping throughout the first quarter of 2008, mostly in line with national patterns. • Economic conditions vary considerably across the six New England states. • CPI inflation in the Boston area continues to run lower than the national average. • NEEP forecast that the region’s outlook is “slow growth, below the national average.”

  31. Outlook for the New England housing market Source: NEEP

  32. Backup slides

  33. Employment Growth by Industry1 Percent Change, March 2007 – March 2008 (Seasonally Adjusted) 2 3 4 5 6 7 1 Industries selected based on the availability of seasonally adjusted data for the New England states. 2 Data not available for CT. 3 Data not available for RI and VT. 4 Data not available for ME, NH, RI and VT. 5 Data not available for CT,ME, NH, RI and VT. 6 Data not available for ME. 7 Data not available for ME, RI and VT Source: U.S. Bureau of Labor Statistics.

  34. Initial Claims for Unemployment Insurance Index 1995 = 1 United States New England Source: U.S. Employment and Training Administration.

  35. Personal Income Percent Change from Year Earlier United States New England Total Wage and Salary Disbursements Percent Change from Year Earlier New England United States Percent Change, Q4 2007 – Q4 2008 Percent Change from Year Earlier Source: U.S. Bureau of Labor Statistics.

  36. Coincident Indexes Each State’s Post-Recession Trough = 1 NH CT US MA RI VT ME Note: The Rhode Island index does not have a post-recession trough. It is equal to 1 at the U.S. trough. Source: The Federal Reserve Bank of Philadelphia.

  37. US NE US NE US NE Consumer Confidence 1985 U.S. Average = 100 United States New England New England Present Situation and Future Expectations 1985 Average = 100 Present Situation Future Expectations Index (1985 U.S. Average = 100) Consumer Confidence Present Situation Future Expectations Source: The Conference Board.

  38. Massachusetts Indicators Source: Associated Industries of Massachusetts and the University of Massachusetts.

  39. Single-Family Housing Permits Index, 1988 = 1 United States New England Multi-Family Housing Permits Index, 1988 = 1 United States New England Source: U.S. Department of Commerce, Construction Statistics Division. Dollar Value of Residential Construction Contracts United States Index, 1988 = 1 New England Source: McGraw-Hill Information Systems Company, F.W. Dodge Division.

  40. The Green & Climate Change Economic OutlookAndrew PatersonDirector of EconomicsEconergy International Corporation

  41. Climate Policy Outlook and Carbon Management Business OpportunitiesNew England Environmental Business CouncilWestborough, MAMay 2008 Andrew D. Paterson Director – North America, Economics & Finance Consulting Washington, DC 202-822-4980 adpaterson@econergy.com

  42. ECONERGY’S BUSINESS (“ECG” on London AIM) OFFICES & PROJECTS Raised $100M on London AIM in Feb. 2006 $25M in revenues for 2007, from $3M in 2005. 42

  43. Climate Policy: Good News / Bad News Good News: • No matter the results of the election in 2008, the federal political landscape will improve dramatically for legislation on GHGs. • Democrats will likely gain +15 in the House, +5 in Senate in 2008. • All three presidential candidates will sign climate legislation • Voluntary efforts, early action, and state initiatives are underway already. Bad News: • A primary excuse for failing to pass GHG legislation vanishes in 2009. • Regional differences within US are physically vast, making consensus on environmental policies very elusive, and with clear leaders and laggards. • China and India + ROW will continue to pump GHGs into the global airshed faster than we curb emissions… without massive infrastructure overhaul. • The federal deficit poses a huge barrier to funding new incentives. • Policy models are not focused well on scale of the fossil economy challenge.

  44. Overview: Environmental Business Opportunities • Environmental Market Update • Progress and plateaus; Growth Markets vs. Large Markets • Politics 2008: Impact on Policy Outlook • Democrats will gain in Congress… plus the White House (?) • But, the country will remain divided: Red vs. Blue • Carbon Policy Options & Financing Issues • Supreme Court: Impact of Mass v. U.S. EPA (April 2007) • U.S. and Global Carbon Emission Outlook • The scale of the fossil economy is daunting worldwide • Socolow’s Wedges as a basis for Business Strategy • The WBCSD Framework (long-term) vs. Kyoto (short term) • The Bond Market: The critical market for financing clean energy

  45. U.S. Environmental Market Growth Rides on Resources Environmental legislation in 1970s and 1980s helped drive growth, but economic recovery, manufacturing excellence in the 1990s became larger drivers as cleanup markets topped out. Exports comprise about 10% of the total market, concentrated in air, water equipment. Global growth draws on resources.

  46. Some Service Sectors Declining; Water, Energy Growing Backend treatment services – remediation, hazardous waste management, analytical labs and related consulting peaked in the 1980s and plateaued. Energy and water niches, process technologies grow with demographic and economic drivers. Source: Environmental Business Journal

  47. Market Traits (Growth, Size) Affect Financing Options • Different market traits – growth rate, competitive dominance, nature of purchasing decisions – call for different financing approaches, incentives. • Clean energy and instruments offer much higher growth rates (>20% per year) to allow recovery of equity investments (Group A). • Larger markets, like water treatment and resource recovery with steadier growth rates, that match the economy and demographic trends, allow for some debt funding and project finance, often with some public finance (Group B). Municipal ownership is high in these sectors precluding venture capital. Tax exempt bonds, international lending are more typical. • Declining markets, like remediation and consulting, must rely on asset conversion, e.g. brownfield development or facility turnaround, to generate returns since losses on operations are common (Group C). • For international markets, project debt financing is a paramount factor since markets and enforcement mechanisms are not well-developed.

  48. U.S. Enviro Markets 2010 Forecast: Growth vs. Size (I) • Small markets growing faster: Process Technology, Instruments, Energy, Water • Large markets growing basically with the economy: Infrastructure, Services • Shrinking markets: Traditional backend Cleanup and Remediation Source: EBI

  49. U.S. Enviro Markets 2010 Forecast: Growth vs. Size (II) • Small markets growing faster: Process Technology, Instruments, Energy, Water • Large markets growing basically with the economy: Infrastructure, Services • Shrinking markets: Traditional backend Cleanup and Remediation Source: EBI

  50. Drivers & Multi-media Linkage • Even with changeover in Congress, traditional environmental legislation is on a slow track (e.g., no RCRA, Superfund bills). • High market segment growth (>2x-3x GDP) drives returns needed to recover costs and risks of technology innovation. • Many environmental sectors are mature and driven by GDP and demographics: water resources, solid waste, land use. • Back-end cleanup, e.g., remediation, air, hazardous waste, are not high growth niches. Much work has been completed (USTs). • Redevelopment of aging infrastructure is becoming a bigger driver, including energy and grid, water, urban transport, gov’t. • Interest rates are low, allowing ample financing for infrastructure. • Water shortages have appeared, but have not triggered large scale budget increases yet, which will be needed for innovation. • Linkage: Innovative energy technologies look to be a high growth niche, creating higher water demands, affected by GHG policy. • Regulatory uncertainty freezes investment and market growth. • Better long-term policies mobilize more private capital.