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SIPA Grads Go Green with Alternative Energy Fund
Can financial markets protect the world from climate change? That’s a question Nao Minami (MPA ‘10, left) and Patrick Kim (MIA ‘10) pondered during much of their time at SIPA.
Just a year after graduating, Minami and a business partner are growing an investment fund to develop alternative energy projects, with Kim as business development manager. The fund, Green Street Energy, finances solar energy systems on small commercial buildings and recently completed its first project on the roof of a Hawaiian hotel.
“We're an independent power company, basically,” explains Minami, Green Street’s CEO and a former trader for Goldman Sachs.
Minami and Kim met as SIPA students with a shared interest in carbon markets. At the time, carbon markets were viewed as a likely answer to the problem of climate change. Companies would buy and sell the right to emit greenhouse gases under international rules that were still under negotiation.
The two helped form student groups to look at carbon markets. Kim was president of the Carbon Finance and Environmental Markets Association, and Minami led a group called “Green Street” with students from the MPA in Environmental Science and Policy program.
Both groups helped organize a panel discussion on carbon finance before the 2009 climate negotiations in Copenhagen. Minami and other students from Green Street gave participants a written report with some of their research.
“That experience to me was one of the most satisfying experiences of my time here,” Minami recalls.
But the Copenhagen negotiations were a great disappointment. Instead of reaching an international agreement on carbon markets, they revealed the sharp differences between leading polluters such as the United States and China. Students in the Carbon Finance and Environmental Markets Association wondered what to focus on now that the idea of international carbon markets was virtually dead.
Minami and Kim decided to work on financing solar energy. While many U.S. politicians came out against carbon markets, there were still a variety of U.S. state and federal subsidies for the alternative energy industry.
“I think the whole political spectrum can agree on financing renewable energy,” Kim says.
Kim and Minami say one lesson from their SIPA experience has been particularly valuable, and that is how the alternative energy industry is shaped by public policy — at times, unpredictably.
Alternative energy investors have to navigate a complex system of incentives that vary from state to state. SIPA helped Kim and Minami understand this regulatory environment and deal with it strategically. For example, Green Street Energy is diversifying into multiple U.S. regions to mitigate the risk of unfavorable policy changes, Minami says.
Green Street Energy has set up offices in Manhattan, and Kim and Minami are excited to be part of the rapidly growing alternative energy industry. Across the river, New Jersey now has the second largest solar power industry in the nation, after California.
For the time being, public policies also favor building solar power systems. In December 2010, after a contentious debate, key federal subsidies for the alternative energy industry were renewed for another year.
“We're trying to build as much as we can in 2011,” Minami says.