Update on Programs

Business Committee on Financing the Future
After working groups, community forums and work with the Legislative Study Commission on Fiscal Modernization (LSC), the Institute for Emerging Issues (IEI) is now focusing its efforts on a Business Committee on Financing The Future (BCFTF).

While the BCFTF represents only one element in the Institute’s program of work on Financing the Future, it will now play a central role.  The committee will serve as an indispensable mechanism for helping to complete the work of the LSC.  The committee will work in parallel, by becoming thoroughly informed about the issues, by educating their peers in business across the state about the issues, and by communicating a detailed and independent view reflecting the needs of business to the commission and other political leaders.

The BCFTF met for the first time on November 29 in Greensboro under three co-chairs, Jack Cecil, Biltmore Farms; John McNairy, Tidewater Transit Co.; and Richard Vinroot, Robinson, Bradshaw & Hinson.  At the meeting, the committee heard a presentation from Dr. Bill Fox on the challenges faced by all states as they adapt their financial systems to the demands of a 21st century economy, as well as an update on the work of the Institute and the LSC.

The committee will meet two more times, with work to be completed before March 2008, in time to inform the North Carolina General Assembly legislative short session.  For more information about the BCFTF contact Roland Stephen.

North Carolina's Energy Futures: Realizing a State of Opportunity
IEI has been busy convening working groups on energy over the past month.  At the groups’ first meetings, working group participants considered the nature of the energy situation in North Carolina and how this will likely evolve over the next 25 years given trends at the state, national and international levels.  These included the following:

GLOBAL ENERGY TRENDS
Trends at the national and international levels will lead to higher and more volatile gas and energy prices.  These price effects will be accompanied by regulatory action to move our energy system away from its almost exclusive reliance on fossil fuels (primarily coal and oil). 

• Global Climate Change – Left unchecked, climate change will impose a variety of costs on our state.  North Carolina’s coastal regions are particularly vulnerable to a general rise in sea levels and to increased frequency and intensity of hurricanes. Global warming may interact with local declines in air quality resulting in lower visibility in the state’s mountains and urban areas, and significant public health hazards.  The agricultural sector may also be subject to large adjustment costs.
• Peak Oil Production– Oil supplies are projected to flatten in the years ahead, increasing the level and volatility of prices.  The burden of adjustment will be felt in oil intensive sectors, industries and regions.  At the same time, growth in developing countries will fuel rapid increases demand for oil, leading to further price increases. 
• National Security Concerns:  Energy security is a national priority for the United States given the fact that we import the majority of our energy.  Dependence on foreign oil supplies, particularly in regions of the world that are politically unstable, is a strategic disadvantage for our nation.  The costs of maintaining access to these oil sources, including military deployments and conflict, will be an important factor in pushing the country toward alternative fuel sources.
• Environmental and Health Impacts:  Poor air quality linked to fossil fuel usage can lead to asthma and other health problems.  In turn, these create significant health care costs for the state and nation. 
• Future Environmental Regulation:  North Carolinians will be faced with a number of federal regulatory actions in the future which may include increases in the corporate average fuel economy (CAFE) standards, more stringent ozone standards, a national cap and trade program and/or a tax on the carbon content of fossil fuels.  Collectively, these will raise the costs of energy, “pricing in” external costs that are not captured today.

NATIONAL ENERGY TRENDS
General future trends in the state will magnify the challenges described above and be compounded by the following factors.

• Population Growth/Changing Economic Landscape – North Carolina’s population will grow from 9 million people in 2006 to an estimated 13 million by 2030; the state’s challenge will be to grow its population and economy in the context of higher and more volatile energy prices, while continuing its shift from a manufacturing and agricultural economy to a technology and knowledge-based economy.

• Energy Supply Constraints – As with all other states, North Carolina relies on petroleum for nearly all its transportation and fossil fuels for its energy in the residential, commercial and industrial sectors.  Projected increases in energy use will make this dependence hard to reduce.  North Carolina may be in a position to substitute bio-fuels for some of its transportation energy needs and other alternatives in the other sectors, but to do this it must manage powerfully competing demands on its land.
• Pattern of Development – North Carolina’s future pattern of development is characterized by increased urbanization, brought about by greater growth.  The corresponding land use patterns will determine the energy intensity of transportation in the future.

Energy related sectors will change in the future along several dimensions including technology, consumer behavior, the environment, land use and community development and regulation. 

These energy challenges mean that our energy future will be very different.  As North Carolina prepares for these changes, the state must identify and prioritize economic development opportunities that arise as energy efficiency and renewable energy sources become increasingly important.   The way in which North Carolina produces and consumes energy will be fundamentally different, and opportunities to capitalize on this change abound.

A proactive approach for North Carolina, which explores and exploits this new energy future, must address a series of related issues: research and development, workforce education and training, business recruitment and retention, entrepreneurship, capital investment, and all other areas that fall under a broad definition of economic development. 

A clear, ordered set of policy priorities are necessary if state and local governments are to recognize and realize these economic development opportunities.  The model public process pursued by IEI through a leadership summit, working groups, and the annual emerging issues forum, February 11-12, 2008, will yield just such a set of  priorities, together with a roadmap for their implementation.

Stay tuned for more details on the working groups, the Emerging Issues Forum and our energy work program.

Read More About North Carolina Energy Futures