Parsing the argument for equity in climate action

This article was excerpted from Climate & Capital Media’s Leadership Interviews, an ongoing series of in-depth discussions with a wide range of leaders in the climate economy, conducted by David Garrison, publisher of Climate & Capital Media.

Krystal Williams is an impassioned advocate on issues of energy, equity and social justice. Her work with public utilities and renewable energy developers as an energy attorney at Bernstein Shur and Pierce Atwood has deeply influenced her view of both the climate economy and systemic inequities. 

A member of the Maine Bar Association, Williams recently launched the Providentia Group, a law and business advisory firm “focused on creating economic belonging for traditionally underrepresented groups.” 

Climate & Capital’s publisher, David Garrison, spoke with Williams from more than 6 feet away on a porch in Maine. This is an edited transcript.

David Garrison: What’s the burning opportunity in climate change?

Krystal Williams: That’s a big question with at least two responses. 

If you subscribe to the idea that for-profit companies exist to maximize shareholder value, then this is about finding opportunities to maximize shareholder value to make the most money in the climate space. 

But you can also look at this as identifying opportunities to move the nation forward and create climate-resilient infrastructure, irrespective of shareholder impact. 

As we’re talking, it makes me wonder if there’s an opportunity — in the same way that we now recognize B Corps as a distinct business structure — to form an organization specifically focused on advancing renewable energy usage.

I’m separating those out because in the public utility space where I operate as a lawyer, there’s a lot of conversation around that second one — system resilience — and how quickly we can recover after a major climate event. Particularly for power systems (think electric public utilities), we’re concerned about what happens when, for example, a transmission line goes down. 

And there’s absolutely an opportunity to invest in system resilience. Developers, for example, if they’re building along a coastline, can create underground parking spaces that are high enough that that’s the area that’s flooded instead of the offices. 

Another example: For public utilities, the opportunity is in electrical infrastructure. When I was growing up, you’d buy a string of Christmas lights, and if one light went out, the whole string was worthless. It’s the same basic idea here, but on a larger scale: How do we protect the system from itself?  

Those are two specific ways we can be proactive in how we think about existing and new infrastructure, but these are both responding to common sorts of problems across the globe. 

But here’s the issue: If you’re only answering the first question (where is there an opportunity to maximize shareholder value?), the range of activity gets a lot smaller. That’s because there is not an ability yet to fully recover the cost of building these structures. 

Garrison: Why not?

Williams: I hate to make a statement like this, but there’s still enough of a debate around the reality and severity of climate change that it’s difficult to price a response into the infrastructure that private developers build — and then fully recoup that investment. 

I live in the world of clean energy, and Maine has passed legislation to promote distributed generation. (It’s really focused on solar panels and commercial on-grid battery installations.) Getting to where we are now required that legislation, but we’re seeing solar developers flooding into Maine. 

What I’ve found in representing parties on both sides is that, for commercial owners who have solar installed behind the meter (meaning they’re getting a direct infusion from solar installed somewhere on their property), they’re still paying a slight premium — and they’re willing to — with the understanding that it’s moving the technology forward and bringing the overall price down. 

Now, there’s a cap on the premium they’re willing to accept. But what I’ve seen in the commercial market with net-energy billing (that’s basically when a solo developer builds a system, sells it to a large public utility, and the customer gets credits applied to their account) is that that’s a lucrative opportunity.

It’s lucrative because once the structure is built, solar energy is largely free. So, the discussion is really about the installation and supply costs of the materials. In this model, the customer benefits from the lower cost of energy and the developer benefits because they have their debt serviced by selling energy to the utilities — they take the renewable energy credits and sell them into the market. In places like Massachusetts and Connecticut, where there’s a pretty robust market, they can make a nice return. 

Garrison: If we’re going to accelerate the climate economy in a sustained and systemic way, it’s unlikely it’ll be done on the back of “musts” or altruism. It’s much more likely to be done on the back of a shift in what we believe is worth investing in. Where do you see that positive opportunity?

Williams: The positive story right now, particularly for businesses that have steady energy demand or who can map out their energy demand with some degree of specificity, is in having a solar system installed on your property — or even purchased virtually. 

A key point to make there is that, especially as businesses become more data-driven, costs can be quite high, and you move down the cost curve with solar panel systems. You also begin to enable large-scale battery installations, which is a bottleneck to seeing solar panels widely implemented and to shifting residential consumption.

Maine has a goal of 100 percent renewable energy by 2050. And the reality is that we won’t get there solely by the large companies shifting to renewable energy. We’ll get there by building infrastructure — for things like electric vehicles — and that requires not only charging stations along the highway but also that more individuals own electric vehicles and install batteries in their homes to charge them. 

Garrison: In the past, you’ve emphasized the importance of social consciousness and understanding the implications of the choices we make. Are we putting too much of the burden of this transformation on consumers? 

Williams: Ultimately, consumers have to decide whether products meet their needs at a price they’re comfortable with, but I don’t think the responsibility is entirely theirs.

As we’re talking, it makes me wonder if there’s an opportunity — in the same way that we now recognize B Corps as a distinct business structure — to form an organization specifically focused on advancing renewable energy usage. Now, I have no idea what that would look like, but it gets at the question of how we focus on the responsibility business leaders have (or could have) to address issues of climate change.

Like every leader, I struggle with the tension that exists between a desire to do good and the profitability of a company. There’s a sliding scale there, because if a company isn’t profitable, it’s not going to exist for very long. But at what point does profitability go too far? When and how do we know it’s taking more from the system than it’s giving back?

Questions inevitably come up around what happens when a solar-powered system reaches the end of its useful life. Do we scrap it? Do we break it down and mine materials from it?


This is complicated. Renewable energy is one of the primary ways we can combat climate change, but profit margins in the energy sector are very low. Often, deals are structured to cover debt with less than a 5 percent profit margin.

So, where energy developers are making money isn’t on an individual project; they’re making money by turning out project after project. My understanding is that the margins on wind-energy projects aren’t all that different.

I don’t know what more can be done to de-risk investments in renewable energy for smaller scale, commercial and residential customers. Anecdotally, shifting to off-grid is still too expensive for people. Even with federal tax credits and state-level incentives, it’s still just not at a price point that the middle class can afford. And that’s clearly a problem: People want to move in the direction of clean energy. They don’t want to doom the environment every time they turn on the lights. 

Garrison: So, people want to take action, but there are issues of cost and income disparity. What steps do we need to take? 

Williams: One step is figuring out how we make the leap from legislatively mandated programs to something that is truly market-driven.

Another is how we look at our supply chains and sourcing strategies to ensure that the products we’re creating don’t feed negatively into climate issues.

A third is to understand what happens to a product at the end of its life.

Garrison: If we know those three steps are important, why aren’t they happening? 

Williams: I don’t actually know that they’re not starting to. My worry is that, in our need to keep business moving forward, the long-term and important generally loses out to the short-term and urgent — because this is a bit squishy, because there aren’t clear answers, and because it all depends on other factors, these kinds of actions fall to the bottom of the priority list.

With solar panels and windmills, for example, I’ve worked on contracts with a 20- to 30-year useful life. And questions inevitably come up around what happens when a solar-powered system reaches the end of its useful life. Do we scrap it? Do we break it down and mine materials from it? 

This is a very real issue, but because we don’t have hundreds of projects that are reaching the end of their useful lives, no one has dedicated serious time to thinking about whether the footprint of the solution is perpetuating the issues we have. 

Garrison: What legal structures and discussions do you see rising in importance over the next couple of years?

Williams: My knee-jerk reaction is that we’ll see more hedging. 

Let me draw an analogy. In agribusiness, there’s hedging for weather because it impacts crop output. Solar is the same: The contract value is based on a projection of how many sunny days or how much wind there will be.

So, what happens when those sunny days don’t materialize? Right now, risk is allocated between the developer and the consumer, who we call the “off-taker.” But as more of these contracts are put in place and as more renewable energy sources get installed, I see hedging mechanisms rising in prominence.

Garrison: Are there structures or discussions we’ll see less of?

Williams: It’s not a legal structure, but I truly hope we get to a point as a society where we’re less demanding; where we don’t require energy 24/7.

I first became aware of solar energy in the Peace Corps. I lived in a remote village, so when I got there, I bought a solar panel from another volunteer. Like everyone else, I got a book on electric wiring, set up the solar panel on my house, and hooked it up to a battery. 

We’ve become so used to shaping the world to fit our needs, but that solar panel system taught me to be judicious in my use of lights — I adapted my behavior to not overtax it. 

Right now, we’re just imposing our needs on the world, and that dynamic is always going to lead to exploitation.

If we truly want to address climate change, we have to allow the natural resources themselves to shape our demand. Right now, we’re just imposing our needs on the world, and that dynamic is always going to lead to exploitation. 

We’re living with the effects of that dynamic: We’ve reached a tipping point — one where resources we’ve been exploiting aren’t replenishing — and something has to give. 

Solar energy is a great alternative to fossil fuels. So is wind energy. But these are all intermittent resources, which means they’re only available a certain number of hours a day. Battery bridges the gap, but it’s still just finding solutions to feed the beast. We’re not questioning whether the beast needs to exist. 

When I think about the intersection between climate change and capital markets, the part of me that was in the Peace Corps wonders if our premise is flawed. We’ve gotten off balance in how we interact with the world, and I struggle with what business can do, because there are limitations to correcting a problem from within the same system that created it.

Garrison: Talk to me about the connection between our decisions and the greater vision of a diverse and sustainable climate economy. 

Williams: Because of what I’ve experienced in my own life, what I know to be true is that it doesn’t take a lot of economic space to have a huge impact. And when we continually reinvest in incremental improvements, we create a sea change for individuals and across communities. 

I grew up in a Habitat for Humanity community in North Carolina. Our home was heated by propane, and I remember that, particularly in the winter, the thermostat would be really low to save money. We would cry that we were cold, and our parents would holler back, “Well, go put on another pair of socks!” 

Now, imagine a future — somewhere like in Brookline, Massachusetts — when there’s a tenement run on solar energy with batteries and electric heaters installed. Imagine that the residents of that building pay a fraction of our electric and heating bills, because the costs are offset by the energy the solar panels produce — and the summer months offset the winter months. 

The residents of this tenement use that economic space to invest in better food for their family. They’re moving up Maslow’s hierarchy of needs. They’re not eating processed food; they have a touch more income for a local farmers market.

People’s health improves, and because their health improves, we see a decline in things like ADHD. Their kids are able to pay more attention in school. Graduation rates improve and people think about college or trade schools. 

This model of change can be found in an urban setting or it can be rural. We’ve already seen good instances of it in Africa, where instead of bringing large public utilities into remote villages, they’re using solar panels. 

Over time, and in small shifts, the quality of our life improves. What we’re talking about here is analogous to the leap from landlines to cell phones. And the benefit, particularly for people in lower economic brackets, is huge. This, I wholeheartedly believe, is possible and it can be started by something as simple as the installation of a solar panel system. 

As we think about the climate economy, that’s where I see the biggest opportunity. That’s the vision I’d love to see come about.