November 18, 2020 - Board Meeting opening comments:
At the August Board meeting, I mentioned how that day represented the 100th anniversary of the constitutional amendment granting women the right to vote. That milestone was the culmination of decades of effort by the brave suffragettes. On this day in 1872, a seminal event in that movement took place, when Susan B. Anthony was arrested and later convicted for voting in NY, leading to what came to be known as the Susan B. Anthony Amendment, or the 19th Amendment. This month, the power of that movement was on full display, as the sentiments of suburban women and the turnout of black women were decisive in altering the outcome of our Presidential election, and perhaps the nation’s future.
At the June Board meeting, I spoke of the Juneteenth celebrations, and separately, how that date was 70 years to the day that the Group Areas Act was passed into law in S. Africa, memorializing apartheid as state policy by separating residential and business areas by race. On this day in 1993, a new constitution was approved in S. Africa, introducing universal adult suffrage and finally abolishing the ugly system of Apartheid.
Both of these painful journeys evidence the progress and regression experienced by societies as they advance, some detours short-lived and others prolonged, but each validates the arc bending towards justice. We’ve witnessed first-hand how societies and institutions can deviate rapidly and severely in one direction or another, and how critical an active and well-informed populace is to provide a check against unfortunate digressions and to drive positive change.
On a side note, on this day in 2003, the MA Supreme Court ruled by a single vote that the state’s ban on same-sex marriage was unconstitutional, making MA the first state to do so. But before their legislature was able to change their law 4 months later, as required, a young Mayor, a month into his term, took it upon himself to begin issuing marriage licenses to same-sex couples here in San Francisco, kick-starting with his bold leadership, the erratic path jurisdictions across the nation traveled to what is now widely accepted as simply the right and decent outcome. Thank you Governor Newsom.
Lastly, an information item. At the May board meeting, we celebrated the birthday of the Golden Gate Bridge. I noted how the grand opening occurred more than 20 years after the bridge was designed and following failed bond offerings to finance the bridge that occurred at the height of the Great Depression. Recently, the bond offering for the Desert Express HSR from Las Vegas to Los Angeles was postponed by its sponsors. Another grand infrastructure project, more than a decade in progress, and on the precipice of overcoming a final hurdle to its groundbreaking, found that the markets were not amenable to such an aspirational project during the heart of an economic crisis.
We understand large and audacious endeavors are never easy or straightforward, even in the best of times. But we believe that with perseverance, Desert Express will come back to market and prevail, establishing a model for other ambitious HSR projects across the country.
October 28, 2020 - Board Meeting opening comments:
On this day in 1886, the Statue of Liberty, at 151 feet and 450,000 lbs, was commemorated as a gift from France to celebrate America’s abolition of slavery. The statue depicts Libertas, the Roman goddess of freedom, striding forward with a broken shackle and chain at her feet, a torch in her right hand, and a tablet in her left with the date of the Declaration of Independence.
The statue’s pedestal would later be inscribed with the indelible words “Give me your tired, your poor, your huddled masses yearning to breathe free.” The Statue of Liberty National Monument also includes Ellis Island, this country’s first federal immigration station and once the beacon of freedom welcoming millions of immigrants arriving by sea. This monument has become the symbol of America itself and the American dream we project to the world.
As an immigrant to America, like many immigrants, the Statue of Liberty holds a special place in my heart. In a briefing with the Governor last week who was reflecting on the current sentiment about the issues facing CA, he inspired us to look beyond the immediate challenges and to rise above to see the larger picture, that of the enduring CA Dream. This immediately struck a chord for me and if you’ll indulge me for a moment to share a personal story:
I’ve been engaged on work with refugees and the forgotten, at camps, orphanages and in ghettos throughout the developing world over the past 3 decades. Everywhere I’ve been, the aspiration and vision of America reigns supreme.
My family harbored the same dreams of the opportunity to come to America. When we finally arrived in MN, on a bitter cold December day, it was scary but wonderful. Growing up in MN, I developed another dream, seeded by images of San Diego’s beaches, Disney Land, the GG Bridge & Chinatown, the nation’s tallest mountains and deepest valleys, redwoods and Joshua trees, Lake Tahoe and the Mojave Desert, Hollywood that created my favorite movies, Silicon Valley that invented the technologies I wished for at Xmas, and lush farms that produced my favorite fruit. Our champion Minneapolis Lakers moved to Los Angeles and my Vikings just could not overcome those damn Raiders and 49ers. It was the CA Dream that embodied somewhat of a fantasy land that I hoped to simply visit one day. That day finally came in high school, when we took our first family vacation other than to Fargo and drove the stretch of CA’s coast. Seared in my mind, was that CA was even more glorious than I had imagined.
I’ve come to discover in my work and travels around the world, that much of the world envisions the glory of this country through the lens of the CA Dream. During these troubled times, American ideals will be tested, CA may seem down and out with clouds and haze blocking our sunshine, but don’t be fooled. As I responded to an audience question yesterday about CA’s outlook, nothing keeps me up at night about CA’s future except the hard work we’re doing around the clock to come up with solutions for our communities.
There are plenty of unknown or unquantifiable risks still ahead, but we’ve withstood everything mother nature and the economy have had to throw at us. The underlying fundamentals of this creative and innovation hub of the world, with our true melting pot of the greatest talent ever assembled, with land and resources that are the envy of all – CA will soon be leading the nation and the world into the future once again to greater prosperity.
September 23, 2020 - Board Meeting opening comments:
At this very moment, in the portico of the United States Supreme Court, the body of Ruth Bader Ginsburg lies in repose for the public to wish a final farewell. At this very moment, in the portico of the United States Supreme Court, the body of Ruth Bader Ginsburg lies in repose for the public to wish a final farewell. 6 years-ago yesterday, I experienced the highlight of my tenure in DC, a party for Justice Ginsburg held in the chambers of the Supreme Court. She was serenaded by mezzo-soprano Denyce Graves, one of her favorite opera singers. Who knew the courthouse, designed to host the bitter and bellowing conflicts of attorneys, could transmit such beautiful acoustics of harmony.
This event was shortly after an NYU student’s blog first coined “the Notorious RBG”, and many wondered silently how the reserved justice might react. So I asked her, and we were all relieved and delighted to hear her embrace the moniker associated with her fellow Brooklynite, the deceased rapper Biggie Smalls. She even became known for handing out Notorious RBG T-shirts as gifts.
From her diminutive 5 foot, 90-something pound frame, RBG exuded power and a towering presence with the weight of her words and intellect. Much is scrutinized and known about her jurisprudence and evolution from an overlooked young law school grad, to finding her voice as a fearless defender of equal rights, and to her parting stature as the legal and moral conscience of the nation. However, before we become entirely engrossed in the political ramifications of her passing, I’d like to spend a moment to celebrate personal elements of an amazing life.
⦁ RBG is a daughter of a Jewish immigrant from the Ukraine
⦁ As a baby, her sister died of meningitis and in high school, her mother from cancer
⦁ She was a cheerleader and had a chipped tooth from twirling a baton
⦁ At Harvard Law when the dean invited the 9 females of her 550-member class to dinner, they were each asked to justify why they were there, taking a coveted spot from a deserving man
⦁ She fibbed and said she was there to be helpful to her husband by understanding his work
⦁ She graduated the top female from an Ivy League school and later tied for the top honor from one of the country’s leading law schools. Yet she, as all women of the day, struggled for opportunities in her chosen profession and received no job offers
⦁ In fact, in her first job with the Social Security Administration, she was downgraded to a bottom tier GS2 clerical position when she revealed her pregnancy⦁ Her time spent in Sweden served as an inspiration for becoming a champion for equality
⦁ A great skill she was proud of was her use of “selective hearing” now & then in life and on the court
⦁ A species of praying mantis is named for her, Ilomantis Ginsburgae
⦁ Her workout routine was brutal. Trust me, I attempted her program but realized it was beyond my reach⦁ In each bout with cancer, she rarely missed a day from work, once casting a vote from her hospital bed following surgery.
⦁ In the end, it took cancer 5 separate attempts to finally fell her. I could go on endlessly but know we need time for other matters. Just like the Notorious B.I.G. experienced with his posthumous album, Life After Death, the Notorious R.B.G., her story and her ideas, will most certainly continue a commanding life, very long beyond her death. In a recent interview, she said “Whatever you choose to do, leave tracks…there’s no satisfaction equal to the satisfaction you get from knowing that you have made another’s life, your community, a little better for your effort.”
This week, we received a letter from our partner Norcal FDC detailing the success of a walk-up restaurant in one of the most challenged neighborhoods in Oakland, and a separate heartwarming story of a single mother who was experiencing family tragedy while launching a start-up in Contra Costa and yet expressed tears of hope. Both of these were the result of IBank’s activities and represent some of the many stories about the impact our work is having on our communities. As I shared with our staff, it sometimes feels that we may be just dealing with paperwork and numbers, but behind each financial transaction, are real lives that are deeply impacted. With RBG watching over us, we will continue to seek to make a difference, in particular, to help achieve an improved and more equitable quality of life for all Californians.
August 26, 2020 - Board Meeting opening comments:
100 years ago today, the 19th amendment to the constitution of the United States was certified, granting women the right to vote. However, this was only one important step in the very long journey towards our nation’s founding ideals, for despite passage of this amendment, minority females and minorities of all types continued to struggle to exercise their right to vote for decades.
50 years ago today, protests took place in more than 90 cities across the nation – the Women’s Strike for Equality – demonstrating that despite gaining the right to vote, other human and equal rights were still elusive for too many.
As we all witnessed, 1 week ago today, a black, Indian American woman accepted the Vice Presidential nomination of a major party, breaking new ground in American political history. It took far too long for this momentous occasion to occur, but was further testament to the long arc of the moral universe bending toward justice, and I’d add, equality. (Theodore Parker)
Recent events have shone a spotlight on the systemic injustices that continue to permeate our society. Each meaningful advance will need to be hard fought, and then fought over again, and again, in order to take root and enable the next step towards progress. We’ve witnessed how quickly momentous advancements can backtrack, even on such foundational concepts as voting rights.
Today, we hope to contribute a very small step towards addressing some of the entrenched systemic issues and circumstances, to help insure more equity in our financial system and enable fuller participation in our economy for female and minority and low-income entrepreneurs and business owners, all those that have been perpetually underbanked, underserved and underrepresented.
These small steps may never be commemorated in a constitutional amendment, but require all of us to seek solutions and work tirelessly to keep pressing the arc in the right direction.
July 22, 2020 - Board Meeting opening comments:
I’d like to begin by wishing a happy 80th birthday to an American icon. Alex Trebek, a Ukrainian Canadian immigrant to this country, has hosted the game show Jeopardy for 36 years – a Guinness record for game show hosts. He’s in a very public battle with stage IV pancreatic cancer, and we wish him more birthdays to come. He has recently shared that his life has been a quest for knowledge and understanding, a creed that could serve us all well during such challenging times. I’d like to begin by wishing a happy 80th birthday to an American icon. Alex Trebek, a Ukrainian Canadian immigrant to this country, has hosted the game show Jeopardy for 36 years – a Guinness record for game show hosts. He’s in a very public battle with stage IV pancreatic cancer, and we wish him more birthdays to come. He has recently shared that his life has been a quest for knowledge and understanding, a creed that could serve us all well during such challenging times.
This morning, IBank’s monthly newsletter was distributed, and features among other items:
⦁ A few projects launched in collaboration with the US Digital Response, a dedicated team of top technologists led by some of my former colleagues in the White House, who formed an all-volunteer organization in the wake of COVID-19 to work with governments to deliver critical services to the public. They’ve been amazing and launched our COVID small business disaster assistance wizard, as well as our new public access data and mapping system. We thank them for their service.
⦁ The newsletter also features one of our guests here today, DesertXpress, who recently entered a lease agreement with CALTRANS for the right of way along I-15, an important step forward to build the bullet train from Southern CA to Las Vegas. We’ll hear from DesertXpress on phase II planning of their project shortly.
⦁ Lastly, the newsletter features yesterday’s announcement of IBank’s loan guarantee to Switch Maritime, to build its flagship fuel-cell electric ferry that will commence operation between Oakland and SF later this year, adding 63 jobs and reducing greenhouse gas emissions with this transportation innovation. We’re delighted with our partnership with the Bay Area Air Quality Management District and Nor-Cal FDC to help bring such a game-changing project to life.
2 Board Notifications:
⦁ Blue Mountain Electric Company I’d like to inform the Board that IBank recently entered into an interagency agreement with CAL FIRE to act as loan servicer on Cal Fire’s behalf for forest biomass power plant financings. The loans will be between Cal Fire and the plant owner. None of IBank’s funds will be loaned or at risk and we will only provide loan servicing and support. This is the second interagency agreement between IBank and Cal Fire. Last year, IBank entered into an agreement for a loan to the North Fork Bioenergy project. That $1.2M loan was to fund the PG&E interconnection for their biomass gasification facility. The successful collaboration between IBank and CAL FIRE was significant and we were eager to build on this success for future projects. Blue Mountain Electric Company had received a power purchase agreement from PG&E to construct a 3 MW forest waste biomass facility in Calaveras County, but is struggling to complete the next phase of predevelopment work to keep the PPA in force. Under the new interagency agreement, we will administer a $1.4M loan from Cal Fire to Blue Mountain for interconnection fees and working capital, which represent critical components of the Project. The Project will benefit the community by reducing the risk of fire in surrounding forests via sustainable forest practices and improved air quality. In addition, 20-30 tribal workers in two tribes with unemployment rates of 80% are expected to gain employment at the power plant.
⦁ Small business security with the recent approval of CA’s FY2021 budget, IBank received an additional allocation of $50M across all programs of the Small Business Finance Center to support and restart CA’s struggling small business community. We also received $25M to increase liquidity and available capital to CDFIs and other mission-based lenders to facilitate more loans in underbanked communities. I’d like to share with the Board this most recent effort to spur small business lending in CA. As you know, IBank currently operates the SBLGP, the DRLGP and the COVID-19 DRLGP, each of which enable small businesses to obtain loans with reasonable terms and interest rates. However, we’ve discovered that in these unprecedented economic times, the guarantee programs may not be sufficient to help undercapitalized community lenders to deploy funds rapidly enough for struggling small businesses. A potential solution we’re working on is to partner with private sector, impact investor and philanthropic foundation sponsors to create a special purpose entity that will purchase small business loans from CDFIs and other mission-based lenders.
The loan purchases will effectively provide liquidity and re-capitalize lenders to make additional loans. We believe state support and participation in this vehicle may lead to rapid deployment of substantially larger capital pools to small businesses and ultimately help them rebuild from this crisis. We’ve been in discussion with numerous sponsors and interested parties over the past few weeks and hope to present to the Board soon IBank’s proposed investment in a SPE to catalyze small business lending. During this difficult and rapidly evolving period of uncertainty, let’s channel Alex Trebek and continue to seek knowledge and understanding in our efforts to find solutions for the people of CA.
June 24, 2020 - Board Meeting opening comments:
This past weekend, we witnessed all across the nation, commemorations of the 155th anniversary of Juneteenth, Freedom Day for slaves in America. This was a significant marker for how far our nation has come, yet introspection and recent events make evident how much further we need to go. A notable fact for this day – on June 24th 1950, the Group Areas Act was passed into law in S. Africa, solidifying apartheid as state policy by separating residential and business areas by race. The deplorable government system could not withstand the weight of its injustice, bringing upon it the eyes of the world, and leading to the collapse of the institutionalized system of oppression 41 years later with the end of apartheid, the end of centuries of systemic racist policies, and the toppling of the ruling regime. While S. African apartheid represents a modern-day extreme from American ideals of liberty and justice for all, we may learn from the lessons suffered by others on the long road to attaining that justice and equality.
I’d like to advise the Board of a few items of pending legislation that were posted this week – SB121, SB100 and AB78. The combined legislation may have a profound impact to broaden IBank’s ability to provide necessary financial assistance to our customers and to create new programs to assist small businesses and to address climate change.
In addition to the $50M of emergency funds that we received in April for the Disaster Relief Loan Guarantee Program, SB121 provides an additional $75M to IBank’s Small Business Finance Center. We plan for some of the funds to be used across the existing small business programs to help IBank fill gaps left by federal relief programs and to provide necessary credit support to assist the survival and rebuilding of CA’s small business community in this precarious environment.
We also plan to use the funds and additional authorities to consider new programs where IBank may partner with the private sector to raise lending capital for CDFIs and other mission-based lenders who address CA’s underserved and under-banked small business communities. The bills broaden IBank’s ability to develop new and dynamic financing programs to address dire small business needs. Once these important statutory changes are signed into law, we plan to present the Board with updated Directives and Requirements to launch the new programs.
The legislation also creates a new fund within the IBank Act, the Climate Catalyst Revolving Loan Fund. The existing Act already permits IBank to participate in various green financings through the Infrastructure Bank Fund. However, the new Catalyst Fund would broaden IBank’s mandate and ability to provide financial assistance to an array of parties and projects designed to further California’s climate goals, reduce climate risk, and implement low-carbon technologies. Catalyst intends to collaborate with the multitude of the state’s climate related grant programs and environmental and energy agencies, and will seek capital from non-state sources such as the federal government for green financing activities.
In addition, the legislation would effectively increase IBank’s ability to issue bonds to finance public development facilities. Currently, the Act limits our outstanding bonds for public development facilities to $5B and for rate reduction bonds to $10B. Without this legislation, we would have approached our public development facility cap upon the upcoming issuance of the Virgin Train USA conduit bonds. The legislation combines IBank’s issuance authority for both public development facilities and rate reduction bonds to $15B enabling IBank to continue issuing bonds for important public projects throughout the state.
We’re extremely excited about the pending legislative changes for how it enables IBank to do more and to better serve CA. At the same time, let us all try to do more to advance justice and better serve the disadvantaged in our society.
May 30, 2020 – Message regarding the Small Business crisis:
Small businesses are the economic backbone of California as they employ nearly half of all Californians in 4 million businesses throughout the state. Because the COVID-19 pandemic has hit small business owners with such disproportionate intensity, we immediately jumped into action even before stay-at-home orders were issued to help businesses stay afloat.
The Governor’s Office of Business and Economic Development (GO-Biz) and the California Infrastructure and Economic Development (IBank) each feature programs aimed at supporting and assisting small business. The objective quickly transitioned from business expansion to business survival. An active IBank program in the Small Business Finance Center was created specifically for emergency declarations. The Disaster Relief Loan Guarantee program provides a lender up to a 95% guarantee on any loans they make to a qualifying small business should those loans go into default, enticing more lenders into a precarious environment.
In the last fiscal year, another IBank program, the Small Business Loan Guarantee Program was used more than 575 times by lenders to support more than $500 million of capital injected into the small business community. Those loans preserved or created more than 15,750 jobs.
Because of the severity of COVID-19, few businesses have been spared. Of course, a small governmental program by itself will fall woefully short of addressing the economic damage done to millions of small businesses across the state. Additionally, the Governor has initiated a number of new measures to mitigate the damage. To weather this epic storm, this is a time when we must layer creative solutions and multiple sources of financing from all sources to leverage taxpayer dollars.
The time frames in which we are operating are unprecedented and each day we are talking to more potential partners in the public and private sectors to ensure we have the best chance of success in this vital moment. IBank has seven partner Financial Development Corporations throughout the state as well as a growing list of lending partners that have enrolled in the 95% disaster relief loan guarantee program. These partnerships are pivotal in our ability to fight the economic crisis.
Small businesses can’t be saved by federal and state programs alone. They need to be creative to not only survive this pandemic, but to come back and thrive. We see business owners leveraging bridge loans to remain open and keep employees on payroll, but simultaneously reimagining their craft, location and style of service. Loans are used for constructing drive-through windows to safely serve customers in places we would never have thought necessary or for investments in green upgrades The shutdown has been stressful but some are looking ahead and capitalizing on the downtime to invest in new projects for long-term benefits – to reinvent their businesses for the future.
California can and will recover and return to its prior role driving the innovation of the global economy. It will take time and vision and yes, it will require whatever support that the state can provide. The loan guarantee program enables the state to partner with like-minded lenders, by mitigating a substantial portion of the risk they assume for providing capital to small businesses in the midst of a crisis. Small businesses are suffering the brunt of the devastation, but if we all extend our hands in collaboration, they are also certain to spearhead our recovery. It is often the smallest and most vulnerable of businesses, owned by one person or one family, that provide the diverse and brilliant paths to the California dream which weave the fabric of the vibrant communities we cherish.
May 27, 2020 - Board Meeting opening comments:
On this day May 27th of 1937, during the Great Depression, an iconic structure deemed one of the Wonders of the Modern World was opened, the Golden Gate Bridge. This opening ceremony occurred 20 years after the bridge was designed, at the time, the longest and tallest suspension bridge in the world. It remains the most photographed bridge on the planet, and in my opinion, the most beautiful.
I still stare and marvel at the Golden Gate every time I see it, and often think of the human ingenuity and ambition it required to overcome the technical and financial challenges it encountered, in order to build public infrastructure so awe-inspiring, right here in CA. As you can tell, IBank remains fully operational, but also fully remote. On our weekly all-staff zoom meetings we enjoy observing the longer hair and increasingly creative wardrobes of our colleagues.
A few updates: With the published May revise budget and Trailer Bill Language, the Governor reaffirmed his support for the launch of the Climate Catalyst Fund despite the inability to allocate dollars from the state’s General Fund. Catalyst will instead seek capital from alternative sources in order to help finance the green infrastructure of the future.
The Governor’s budget also included a $50M additional allocation to the Small Business Finance Center, coupled with the $50M emergency funds he announced on April 2nd. Together, this $100M will help to provide necessary emergency relief to thousands of underserved small businesses throughout the state that are in desperate need of assistance.
While the bond markets remain volatile, muni market yields have steadily improved over the past 2 months, back near the historic low yields of early March. IBank continues to target a refunding of its 3 outstanding bonds in late summer, to achieve cost savings, financing flexibility and to lock in historic low interest rates that can be passed on to our borrowers.
At the same time, we continue to monitor our portfolio carefully, to maintain our credit quality while seeking solutions to assist communities and businesses throughout the state to weather this crisis and to prepare to rebuild in its aftermath.
Afterall, the Golden Gate Bridge is more than a means of transport to get from point A to B. It’s a symbol of what’s possible, what can be created during the darkest times to serve the public for the following century – a symbol that could not be more relevant today, on the Golden Gate’s 83rd birthday.
April 22, 2020 - Board Meeting opening comments:
Good afternoon and thank you for attending the IBank board meeting. Today, marks the 50th anniversary of earth day – an estimated 20M people took part in the celebration in 1970, which contributed to the creation of the EPA, and the passage of the Clean Air Act, the Clean Water Act and the Endangered Species Act. Let’s all continue to further this cause and reignite the spirit that the movement captured 50 years ago.
As we remain in the midst of a global crisis, IBank, via our provision of credit and our wholesale funding and capital markets activities, is deemed an essential service. Despite the fact that we’ve now moved to a 100% remote workforce, IBank remains fully functioning and operational, and we continue to conduct our vital services as part of the core fabric of the financial system.
The transition hasn’t been easy, but has been generally smooth to date. The IBank staff is dedicated and proficient, and they stepped into action immediately with a high degree of communication via whatever medium was available. We are executing on advancing our technology infrastructure and preparing to adjust to a rapidly evolving economic and market environment.
We’re also launching new initiatives. At the moment, the Small Business Finance Center is a focal point in helping to provide solutions to the struggling small business community of the state. In addition to connecting small businesses to the relief available by the SBA and other state-wide entities, the Governor announced a $50M allocation to the Small Business Finance Center on April 2nd – to focus on microloans to low-income and immigrant entrepreneurs that are not qualified for federal disaster loans.
Two business days later, our program was live and accepting applications with newly approved lenders. This rapid turnaround was accomplished by our remarkable small business team working around the clock and led by Emily Burgos, with assistance from the entire staff.
Several weeks in, we’ve served approximately 50 businesses, with 500 employees. We target supporting over 2,000 small businesses by guaranteeing $100M of loans with this allocation. With any additional funding, we seek to remain innovative and fast-acting to adapt to the needs of CA’s small businesses with specially tailored products.
Likewise, we’re closely following the activities in our nation’s capitol. As new Federal Reserve liquidity funds are established and additional CARES disaster relief activities are appropriated, we monitor the daily events carefully to assure that we are poised to take any action that may be necessary within our mandate to help provide channels for such relief to the municipalities, small businesses and communities of CA.
For those that follow the muni bond markets closely, including many of today’s meeting participants, it’s been the ride of a lifetime. The historic volatility since the beginning of March is unlike anything ever before experienced. In this chaos, somehow, our very own Treasurer has demonstrated a magic touch, issuing $2B of bonds in early March on the day the muni market shut, and then essentially reopening the market for large muni issues last Thursday with another $1.5B issuance. Congratulations and we hope to follow her lead.
We recognize that the current situation is dire. However, we also know that this crisis will pass, and that the resiliency of all Californians can help lead the rebuild of the global economy. We at IBank intend to play our small role to help us advance towards that brighter future.
February 3, 2020 - Climate Crisis Demands a Renewed Faith in Government:
It appeared like the setting for Cormac McCarthy’s The Road. My wife, pup and I found ourselves driving through a thick orange haze, with ash falling from the sky as we swerved off road to avoid toppled trees from hurricane winds.
This was not our first time driving through smoke and ash. We had been through the Mountain fire two months earlier, the Carr fire in 2018 and the Tubbs fire in 2017. Now we were evacuating the Kincade fire, and we were late. As a result, it was eerily calm – no cars, people or signs of life in the otherwise vibrant Sonoma towns along our escape route. With evacuations in the region becoming routine, we asked ourselves if this seeming apocalypse in the world’s fifth largest economy could really become the new normal. Are we all on the road to The Road?
Citing well-documented science on how climate change contributes to such consequences would be redundant. We know that four of the five largest wildfires in California’s recorded history have occurred in the past eight years, and extreme weather events are reported so frequently that we’ve become numb. Solutions require massive systemic approaches but have become politically polarizing to the point of paralyzing any coordinated response.
We simply don’t have time to waste, yet there exists a major gap in financing. A climate finance gap of $2.5-4.8 Trillion is estimated by the Global Green Growth Institute to reach the Paris Agreement goals, while at the same time, Cambridge Associates reports 2008 the peak investment year for Clean Tech venture, private equity and infrastructure funds. Even proven, commercialized technologies such as ZEV fleets, biodigesters and methane capture solutions find it difficult to attract capital to deploy at sufficient rates.
So while it would be easy to throw our hands up, conclude there is nothing we can do and hope it all works out, this is a test of humanity and we must hold ourselves, our employers, communities and governments accountable to mobilize and turn ideas into action.
Yes, that’s right. During an era when many have lost faith in their dysfunctional governments to even fill a pothole, it is time to renew our faith in government of the people to marshal all elements of society to win the battle of the ages. A catastrophe of this magnitude requires an all-hands attack, and government may be the only institution with the reach, influence, power and resources to lead and bring all elements of society together.
California has set ambitious climate goals – including reaching carbon neutrality by 2045 –and Governor Newsom has followed up with bold strategies and initiatives, including the $1B Climate Catalyst fund as part of his $12.5B climate change budget package. While no single idea solves the problem, Climate Catalyst would deliver disproportionate benefits. It would provide an off-ramp for grant program recipients, bridge financing gaps in the commercial markets, leverage private capital by 3-10x, recycle its proceeds, and accelerate deployment of technologies and solutions across multiple categories, paving a path for other similar models worldwide.
California is home to the greatest innovation ecosystem in history, where ingenuity for solving problems is limitless. However, both broad-scale coordination and sufficient access to risk capital are essential to develop, commercialize and scale solutions at the accelerated rate necessary to prevail over climate change.
So yes, change your lightbulbs, encourage your employer to install solar, but now is the time to count on your elected representatives to lead and to provide financing to solutions that can truly make a difference. It is not too late to write a different ending to our road, where we arrive at the coast not to smoke and ash, but to the beautiful California sunrise that we know and cherish.