The term “public-private partnership” or P3 can often elicit negative reactions. For many, a P3 refers to the kinds of projects described in this WSJ article about a new controversial toll road in North Carolina. Americans are not used to paying for what is traditionally free access to public infrastructure, like roads. So when a road is privatized and drivers must pay a toll, pushback is common.
However, when applied to clean energy or other climate-related infrastructure, we see different results from public-private partnerships. The infrastructure behind our energy system is already largely financed by the private sector, and Americans are already used to paying for the energy they use, whether it is electricity from the outlet or gasoline at the pump.
That is why the energy sector is particularly ripe for the public and private sectors to invest together to address climate change. The National Climate Bank provides a practical and effective way for this idea to become a reality. Under legislation proposed recently in Congress, the government would provide $35 billion of public funds to a new non-profit Climate Bank. That Climate Bank would in turn finance a range of clean energy projects in partnership with private co-investors. The result will be energy at a cost lower than what consumers pay today.
When consumers must start directly paying for something they previously perceived as free, we see get the kind of pushback noted in North Carolina. When a consumer suddenly pays less than what they did previously for a cleaner and better product, the excitement and support builds.