This is not your average textbook. It is not a compilation of dry facts and
drier theories. I started looking into environmental nance issues about 25
years ago. In many cases, I was appalled at what I saw. This book is a reec-
tion of those experiences.
I come from Wall Street. I have seen how business deals with nancial
issues. Financial markets are highly efcient. Government has much to learn.
Before Wall Street, I was in politics in New York State. Winston Churchill
said, “Democracy is the worst form of government, except for all others that
have been tried.” He also said, “The best argument against democracy is a
ve-minute conversation with the average voter.” I am not so cynical, but I do
see clearly that the exigencies of politics temper all good-hearted attempts to
bring business-like efciencies to environmental nance. I understand why
a state legislator would vote for a grant program, even when it is wasteful
and foolhardy to do so. I sympathize with them; but that is not going to stop
me from pointing out the folly of their actions.
When colleagues asked me the working title of the book I was writing,
I, of course, told them, “Finance Policy for Renewable Energy and a Sustainable
Environment.” Their next question invariably was, “When did you start writ-
Their point is well taken. There is no nance policy for renewable energy.
And, there is no nance policy for a sustainable environment.
When I teach environmental nance, I often facetiously tell my class that they
are listening to the world’s greatest expert in environmental nance . . . under
one theory that, in the land of the blind, the one-eyed man is king!
This point is also well taken. I have been practicing what I call “environ-
mental nance” for the past 25 years. During that time, I have never met
another living soul who said that he, or she, was practicing environmental
nance. There are over 17,000 employees at the United States Environmental
Protection Agency (EPA). After working with that agency for 25 years, I
would guess that fewer than one-tenth of 1% of them—about 17—know what
environmental nance is. Don’t get me wrong. Everyone whom I have met
at the EPA is a ne and decent person. They are unquestionably devoted to
improving the environment. It is just that the vast majority of people—not
just at the EPA, but in the whole country—regard the EPA as a regulatory
agency. It certainly is that; but it is also home to the largest and most success-
ful environmental nance program in the world. The EPA people know a lot
about sticks, but little about the carrots that need to accompany the sticks.
“Environmental nance is about creating the greatest environmental ben-
et for the largest number of people at the lowest possible cost.” I put this
sentence in quotes because it is the most important sentence in this book. In