Make Cannabis Great Again

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The cultivation of Cannabis can be traced back at least 12,000 years, which places the plant among humanity’s oldest cultivated crops. Ancient empires such as China, Egypt, Syria, and India employed every component of the plant: the root for medicine, the stem for textiles, the flowers for medicine and intoxication, and the seeds for food and oils. Older civilizations used Cannabis as a remedy for headaches, edema, inflammation, rheumatism, gout. It was even used to relieve sorrow and bad humor. Cannabis was the great plant, as it was considered a gift from God, a plant that can be used ubiquitously, in virtually every part of human life. However, as society evolved, Cannabis restrictions were introduced.

HISTORY OF CANNABIS LEGISLATION

In the past century, there have been no less than 16 pieces of legislation that criminalized Cannabis in the United States. These pieces of legislation have dictated the U.S. policy towards Marijuana and Cannabis use without regard for modern innovation, medicinal uses or public support; none were based on scientific studies or sound logic – they were the result of special interests and sloppy voting practices by politicians. While states have made tremendous progress in legalization, this historically irrational legislation of Cannabis survives on a federal level in 2018 and is the single biggest obstacle the Cannabis industry is facing today.

Cannabis prohibition began in many states in 1906, and by the 1930s Cannabis was fully regulated as an illegal drug in every state. The Marihuana Tax Act of 1937 was the first federal regulation of the plant. In 1969, the Supreme Court ruled the Marihuana Tax Act to be unconstitutional, violating the Fifth Amendment regarding self-incrimination. In response to the Supreme Court’s ruling, the Nixon administration supported Congress and passed the Controlled Substances Act (CSA) in 1970, which stated the Cannabis has a high potential for abuse, and no medical use. CSA prohibited the use of Cannabis for any purpose (recreational and medical), and classified the plant under Schedule I, together with heroin and LSD.  President Nixon formed the Shafer Commission in 1972 to study the use of Cannabis and provide policy recommendations. The Shafer Commission reported in its findings that Cannabis did not cause any considerable dangers to society, and recommended decriminalization of the plant. President Nixon publicly rejected the findings and fully ignored the recommendations.

Since then, multiple efforts to reschedule cannabis under the CSA have failed. On the state level, governments have continued to push for policies that conflict with federal law, beginning with California’s Proposition 215 in 1996. By 2018, 30 states plus Washington D.C. have legalized medical cannabis, and 8 states have legalized recreational use.

HEALTHCARE IMPLICATIONS

Research shows that Cannabis is not a gateway drug, but on the contrary, it is an addiction exit drug. Cannabis has been proven to help opioid, heroin, and even alcohol addicts avoid the nasty withdrawals associated with opioid addiction. Millions are suffering from addiction to opiates (Heroin, Codeine, Morphine) and synthetic opioid medications (Oxycodone, Fentanyl, Hydrocodone etc.). Abusers of opioid drugs had a 16-percent lower likelihood of relapsing when they had the assistance of marijuana for their recovery. Furthermore, states that allow its citizens to use Cannabis to treat specific medical conditions showed a 6% lower rate of opioid prescription. With widespread over-prescription of opiates, this could provide a solution to cut down on users.

Cannabis not only helps opioid addicts with their recovery process, but it can help patients avoid opioids altogether. Cannabis has been proven to relieve patients’ pain, drastically reducing the need for use of opioid, and fatal opioid overdoses. Medical marijuana patients report fewer unpleasant side effects with marijuana than with many traditional and stronger drug treatments.  Medical marijuana patients argue they are able to function more fully in daily activities and work; unlike with many prescription opiates for symptom relief. Other than significantly reducing with use, addiction and withdrawal, medical marijuana is used in treating a myriad of medical conditions, including cancer, seizures, HIV, Parkinson’s, etc. Wide-spread legalization will only accelerate these cures and studies. Cannabis’ full impact on the healthcare industry is still to be determined, but it is well within tens of billions of dollars, and provides a much safer, healthy and less painful alternative to opioids.

BUSINESS IMPLICATIONS

Money does not like uncertainty. With the current uncertainty in U.S. federal law regarding Cannabis, there is a lot of money that is shy to enter and help develop the U.S. Cannabis industry. Still, legal sales of Cannabis reached $6.9 billion in 2016 and are projected to rise all the way to $50 billion by 2026. Legalizing Cannabis nationwide would create at least $132 billion in tax revenue and more than a million jobs in the U.S. within the next decade.

Despite 30 states having legalized Cannabis in some capacity, including 8 states that legalized it for recreational uses, it seems that AG Jeff Sessions is offering no chance of legalization at a federal level.

Even though many States have legalized cannabis, the Federal regulations stops the entrepreneurs from operating at fully capacity. National prohibitions against interstate cannabis commerce and federal banking and drug laws are the biggest obstacle for this industry. Cannabis entrepreneurs have very limited access to funds, loans, even bank accounts, business and personal.

Some of the entrepreneurs we spoke with expressed their frustration with the current legislation. First, they cannot find banks that allow them to open business accounts for their companies. This makes it extremely difficult to conduct any kind of business; they cannot properly receive investments, process payroll, pay suppliers, use credit cards, etc. There are many cases where banks agreed to open an account for a Cannabis business, only to cancel those accounts weeks later and kick those businesses out. In some cases, not only did they cancel the business’ account, but they canceled the business’s founder’s personal accounts with the same bank, even though they have been banking with that institution for many years.

Entrepreneurs in the Cannabis industry have no tools to be transparent about their business, cannot write off any business expenses, and cannot even file their taxes properly. How do you file federal taxes for a Cannabis business when Cannabis is illegal?

Even non-Cannabis, ancillary companies are suffering under this law, simply for being attributed with possible Cannabis applications. It is time to stop being

SOLUTIONS

  1. Declassify Cannabis from Schedule I to Schedule II. Decades of legal red tape, illegality and raids due to Schedule I classification have prevented the U.S. Cannabis industry from fully maturing and providing life changing cures, painless treatments, and healing solutions. Propaganda and misinformation must be eradicated so that safe innovation can be brought to an industry that has already garnered widespread public support to provide safe and efficient healthcare solutions, as well as lucrative business and tax opportunities for the U.S.
  2. Provide ways to educate: the federal government should make a concerted effort to educate consumers of the differences in the chemical makeup of the plants especially regarding non-addictive compounds like CBD. Much of the fear is spread by propaganda. Medical marijuana compounds and methods that are used strictly in the reduction of pain and do not react with mental/job performance are very prevalent in the space.
  3. Eliminate any federal red tape that would prevent the Cannabis industry from growing. The U.S. Cannabis industry is at least 50 years behind in scientific and medical studies of Cannabis, which can provide impactful cures for our citizens. Also, too many patients desperately need it as soon as possible, but Cannabis currently has very little penetration of the healthcare system. Slowing medical Cannabis adoption accomplishes little other than to hurt patients.

CONCLUSION

During his 8-year tenure, President Obama expressed his support for the Cannabis industry, but he proved to be a closet supporter. He did not legalize Cannabis on a federal level; he simply instructed U.S. attorneys not to enforce the federal Cannabis law. As soon as Jeff Sessions was appointed as Attorney General, AG Sessions instructed those same attorneys to enforce the law, leaving many Cannabis companies vulnerable to raids and delegitimization. Entrepreneurs in the space should be able to develop and innovate without fear of retribution or be directed to close their businesses. The current ambiguity in this industry is hindering the modernization that could occur.

Declassifying Cannabis from Schedule I to Schedule II, is the single lowest hanging fruit for the Trump Administration to curb opioid addiction and treatment (which is a national health emergency), drastically improve the healthcare of U.S. citizens and reduce their healthcare cost burden, add more than 1 million jobs to the economy and add $132+ billion in federal tax revenue within one decade. This one piece of legislation can make one of the biggest contributions to Making America Great Again, on multiple levels. President Trump has already instituted a task force to determine what the Cannabis policy should be in the U.S. and I am optimistic that new developments will be made towards legalization.

SOURCES:

Where marijuana is legal, opioid prescriptions fall, studies find

Medical Pot Is Our Best Hope to Fight the Opioid Epidemic

Medical Marijuana Market Analysis By Application

History of Marijuana as Medicine – 2900 BC to Present

Marijuana Legalization and Regulation

Study: Legal marijuana could generate more than $132 billion in federal tax revenue and 1 million jobs

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The Blueprint for Community Banks in a Digital World

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Historically, community banks have been the pillar for any community, as they take care of the needs of the local businesses and families. They have been instrumental in helping the American economy recover from the 2008 financial crisis, as they are highly capitalized and better prepared to withstand an economic crisis than their larger counterparts. Nonetheless, community banks are disappearing at an alarming rate. The total number of banks insured by the FDIC decreased from 7,087 in 2008, to 4,938 in 2017 – a 30% decrease in less than 10 years; this was mostly due to abundant M&A activity, as well as more than 500 bank failures.

Heavy regulations account for a large part in the growing consolidation. A new survey from the Federal Reserve and Conference of State Bank Supervisors found that community bank compliance costs have increased to 24% of community bank net income, in the past two years alone. For almost all bankers (96.7%), regulatory costs were the deciding factors when considering an acquisition.

Bank regulations are a two-edge sword, with both edges cutting deep into community banks’ ability to survive. First, overregulation heavily handicaps community banks from competing for their vital place in the financial ecosystem through increased regulatory costs, increased requirements for capital with fewer sources, burdensome new risk management requirements, new rules dictating every consumer financial product, etc. Eighty-two percent of U.S. bankers claim that government regulations are not on par technology advancement, severely impeding growth.

Second, and equally important, regulations create friction between banks and their consumers. They make it difficult for banks to offer their customers what they want and how they want it. The nail in the coffin: these friction points serve as inspiration for fintech entrepreneurs and other nonregulated competitors to come up with innovative solutions.

The only way to escape from between a rock and a hard place, is to be BOLDER.

The biggest adjustments banks will have to make, is to become the masters of their own fate. Banks cannot expect to survive by simply navigating the regulatory environment and waiting for interest rates to rise.

As financial technology brings a myriad of new capabilities with exponential uses, the banking industry is heading into a new, untapped market, which has not yet been regulated. It is imperative that bankers do not wait for regulators to leisurely catch up and introduce static rules, which often inhibit growth. Bankers understand their industry’s challenges much more deeply than regulators; they have the most skin in the game. They either get ahead of the technological curve, by embracing new technologies and taking action, or fall behind. Behind their competitors, behind the banking industry, behind the needs of their customers. Banks must aim to shape the new competitive landscape, or risk being an outsider in other players’ environment.

Although community banks find themselves in an impossible situation, being the cornerstone of communities for decades, comes with certain advantages over their financial technology and banking competitors.

ADVANTAGES AND RECOMMENDATIONS:

Advantage #1: Trust. In 2017, eighty-six percent of U.S. consumers still place community banks as the number one institution to securely manage all their personal data. Community banks still have the people’s trust, and they must capitalize on it. Trust is power. Trust is something many fintech companies can only dream of earning. The fact that customers trust community banks to protect their information, execute transactions and hold on to their money, puts community banks in a position of power, when competing with the banking and financial technology industry.

Advantage #2: Deep relationship with their communities. Technology alone will not be able to replace community banks, at least not in the foreseeable future. This is because community banks have specialized in the exact things technology severely lacks: emotional intelligence, personal relationships, and as previously mentioned, having the trust of their community.

Community banks focus on providing traditional banking services in their local communities. They are “relationship” bankers as opposed to “transactional” bankers. Long-term relationships with their communities allows to better understand their borrowers and gives them nonstandard data, which they can use to make credit decisions. In many cases, local businesses/startups can only depend on community banks for loans, as they might not always be able to satisfy the more rigid requirements of big banks.

No other institution/technology can support their local communities better than these banks. Big banks are too rigid, and technology alone could never fulfil the role of a bank. Technology can only enhance and automate processes, which make banks more efficient. Innovative technologies are there to serve the banks and their communities, not the other way around. The community bank, as an institution, is here to stay. However, individual community banks’ fates depend on how well they adapt to the new market.

Recommendation #1: Focus intensely on helping customers achieve their goals. That is it. To do so, they must focus on “changing the bank” rather than “running the bank.” The old way of running a bank is making them irrelevant, unable to meet the demands of their customers. The way banks take charge of their own destiny, is by taking an aggressive stance to “change the bank.” It all starts with the team.

Recommendation #2: Assemble a team with a high market intelligence: hiring banking executives with 35 years of experience in the old banking model is not recommended, especially if they do not have an elevated level of current market intelligence. They will not be able to change the bank. As with most other industries, banking needs to adopt and embrace the modern workforce, based on freelancing, flexibility and scalability. As of today, 16 percent of bank’s workforce already engages with freelance workers, and thirty percent of bankers believe this number will increase by fifty percent in 2018. The bank needs to become an agile, efficient, on-demand institution. The workforce needs to reflect these values.

The benefits of the modern workforce represent a new, albeit indispensable access to a wide-ranging pool of in-demand skills and knowledge, that transforms the bank from a static and rigid institution, into an agile entrepreneurial and innovative organization.

Recommendation #3: Employ artificial intelligence and other digital ecosystems, on a large scale. Technology can outperform all employees when it comes to matters of the back-end office and operations. However, the motivation here is not to eliminate the need for employees, but rather to free the employees from tedious and menial tasks, and allow them to focus on engaging with and serving their customers. As the bank evolves to a digital-first business model, bankers must step up their efforts to create relationships with their communities, and actively help them accomplish their goals.

In the end, banks need to once again become the leaders of their communities, helping and enabling their customers to achieve financial success in any way possible. When banks help people achieve more, people will become increasingly confident in this partnership, and will renew their commitment. The old way of “running the bank” will only achieve running the bank into oblivion. As new technologies and systems emerge, banks cannot wait for regulators to tell them how to engage. Banks must learn and adopt these new advances, in a way that makes them leaders of their communities once again, and in the process, teach regulators how to create a more functional regulatory environment.

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U.S. Healthcare: The Most UnAmerican Industry

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In the past three decades, the U.S. healthcare industry has evolved to resemble a poorly regulated market, where financial incentives are set to default to the most expensive treatment option possible. Through the Affordable Care Act (ACA, ObamaCare) President Obama compromised with the medical industry to pass a bill that aimed to cover all Americans; the compromise entailed a complete lack of cost control and treatment accountability for patients. As a result, the United States health care system is the most expensive in the world, but consistently underperforms on most dimensions of performance when compared to other countries. Worse of all, it is bankrupting our country at a rapid pace.

The United States now spends $3.3 Trillion per year on its healthcare system under the Affordable Care Act. In comparison, the U.S. spends $660 billion per year on our military (the largest and most advanced military in the world; this budget is also bigger than the next 8 countries’ budgets combined), and $230 billion per year on our education system. Even when the cost is calculated per capita, the U.S. spends at least twice as much as Canada, and three times as much as Italy. Worse, the Commonwealth Fund’s report on international health system efficiency, ranked the United States last of 11 developed nations, on quality, access, efficiency and equity of care. The current healthcare solutions, administration and financing, are dysfunctional to say the least. Most urgently, this atrocious healthcare system is funded without end by the U.S. government, under the Affordable Care Act. The $3.3 Trillion per year makes up 16.5% of the U.S. total debt of $20 Trillion.

National health spending is projected to increase from 18 percent of GDP to about 25 percent by 2037. The root of the ridiculous high costs of healthcare lay within Obamacare’s faulty incentives. Insurance companies pay their executives as a percentage of premiums. Thus, the more they pay for their insured, the higher their salaries. If doctors charge hundreds of thousands of dollars for simple procedures (as it is now happening more often), insurance companies usually have no problems paying for it. Doctors know this; thus, it is not rare to find three or four doctors billing the same patient as if they each did a procedure, when in fact, most of them just walked by and said hello. These instances are documented, as they happen all the time. While Obamacare was hailed as a victory for the consumers, it truly is a payday for healthcare professionals. Universal coverage under Obamacare does not mean anyone in the U.S. can be treated. It means anyone in the U.S. can see a doctor and be billed for it, whether they are healed or not. As a result, the U.S. is becoming sick and broke. Obviously, this demands urgent, decisive action. While President Trump is fighting to repeal Obamacare with the persistence of a honeybadger, the private sector must be ready to provide new, innovative healthcare delivery models.

TRUMP ADMINISTRATION:

  1. Repeal Obamacare ASAP First, the Trump administration must do everything and anything to repeal Obamacare as soon as possible. Shifting federal spending to private individuals, employers and states doesn’t solve the healthcare problem, but spending our way into bankruptcy is not the solution, and should not even be an option. The first step to lowering the costs of healthcare is to stop paying for it indiscriminately. In an industry where prices rise to whatever the market (i.e. the government and insurance companies) will pay, it is counterproductive to write blank checks to healthcare providers. This is why our average annual healthcare spend per capita is triple that of other OECD countries.
  2. Make Healthcare Competitive Again Second, the Trump administration must roll back regulations and mandates, and adjust laws that allow healthcare to become a competitive market. Such a market would adhere to the concept of “value based purchasing,” which states that providers only get paid if they fix the problem. This means hospitals and doctors cannot bill simply because they applied a procedure, whether it was successful or not; the patient must be healed. Value based purchasing dictates that providers take responsibility for the patients’ health. Also, this new, competitive market would naturally favor healthcare providers who achieve triple aim: lower costs, improve quality, and improve patient satisfaction. Instead of the government setting prices for health care commodities, providers need to compete to offer the lowest price.Regarding physicians, the Trump administration must counter restrictive state laws to allow nonphysician providers (i.e. advanced-practice nurses) to practice to the full extent of their training. This would expand the workforce supply, increase competition, and lower prices.
  3. Adopt Blockchain Technologies Lastly, the Trump Administration needs to make it a priority to adopt blockchain technologies, which will allow the private sector to accelerate their use of blockchain technology. Since the private healthcare industry works so closely with government institutions, one cannot fundamentally evolve without the other side making some fundamental changes as well. It takes two to Tango.

PRIVATE SECTOR:

While the Trump administration is fighting to repeal the catastrophically expensive Obamacare, the private sector must take ownership and deliver bold, innovative, and profitable solutions. Healthcare entrepreneurs must focus their efforts and capital on 1). inventing new healthcare delivery models, and 2). adopting blockchain technology.

  1. Create New Healthcare Delivery Models: Specifically, we need solutions that revolutionize the large institutions, such as hospitals. It currently costs $1,200/day in fixed costs to keep a hospital bed available (regardless of whether there is a patient in it or not). Hospital bills make up 40-50% of the yearly $3.3T spent; extremely inefficient. The solution is not found in inventing models that reduce the cost by 10%, but rather by inventing brand-new healthcare delivery systems, such as ambulatory surgical centers (ASCs) and home-based micro-hospital units. For example, ASCs provide cost-effective surgeries in a convenient environment that is less stressful than hospitals, while home-based micro-hospital units utilize the most recent advances in technology (telehealth, wearables, sensors and systems) to reinvent the way patients are treated, in a more efficient and cost-effective way: in their own homes. The U.S. healthcare industry will depend almost entirely on capable entrepreneurs willing to reinvent these ancient, costly, inefficient care delivery practices.
  2. Digitization of Healthcare and Adoption of Blockchain Technology The single biggest innovation coming to the healthcare industry is the adoption of blockchain technology, as it is the best solution available to streamline all healthcare data, processes and infrastructure. Blockchain is the great equalizer, because it can absorb information from hundreds of types of software and programs lurking in the healthcare industry, and organize it in a decentralized, nationally/worldly distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. Hundreds of systems into one system.The competitive advantage blockchain offers to any healthcare institution that adopts it early will slash through the administrative and operating costs. Issues of billing, coding, collections, coordination, etc., will begin to disappear from the industry, as a nationally distributed ledger will accurately and permanently verify and track all data as it is created. No more reconciliations, duplicate data entries, and endless confusion.Lastly, the adoption of blockchain technology in the healthcare industry will revolutionize the outcomes for patients as well. In the past two decades, digital technology fully transformed most aspects of our lives, such as communication, banking, entertainment, shopping, etc. Healthcare is the exception.Most technology investments in healthcare did not translate into better outcomes for patients. For example, in the past few years, the U.S. government invested more than $30B to digitize hospitals and doctors’ work. The result? Doctors and staff now spend the majority of their time behind computers, frustratingly managing data, instead of having more time for their patients. An Ipsos Public Affairs survey recently found that most doctors (83%) are spread so thin that they aren’t able to spend enough time with their patients. Endless paperwork, inconsistent software, unavailable data, etc., is keeping doctors, providers and staff focused on bureaucracy rather than delivering care to patients. The digitization of healthcare (from paper records to electronic health records) and subsequent adoption of the blockchain technology will truly improve the cost, quality and patient satisfaction.In conclusion, President Trump must continue to fight to repeal Obamacare. He is doing so not because he hates people, as the media will have you believe, but because this horrific policy is bankrupting our country, while offering a mediocre excuse for healthcare. Costs are out of control, and no entity is responsible for healing patients. It’s a bad deal, plain and simple. The Trump administration must also be ready to assist and match the private sector in adopting blockchain technologies as quickly as possible. Healthcare entrepreneurs must employ the latest advances in technology, including blockchain, to reinvent healthcare delivery models.

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RENEWABLE ENERGY: A COMPLEX SYMPHONY TO BE CONDUCTED, NOT REGULATED

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The U.S. energy industry is undergoing a change of direction, as President Trump focuses on economic policies that help the U.S. economy, rather than taking misguided action in the name of global warming.

When it comes to the energy industry, the goal is to make America energy independent, through an “America First” energy plan. America’s historic dependence on imported energy (most significantly oil) makes it vulnerable to hostile regimes and forces the U.S. to compromise its foreign policies. A true leader of the world has to be independent.

Renewable energy will change the international power scale and rules as it can give countries freedom from the oil monopolies (i.e. OPEC). This is an opportunity that must be seized by the U.S. to ensure its future independence.

The complex industry of renewable energy

The main challenge facing the renewable energy industry today is that renewable energy is variable and unpredictable. When tasked to power a city’s energy grid, using an energy source that is unpredictable is not an option. The city (with all its essential services such as hospitals, street/traffic lights, etc.) cannot wait for the weather. Thus, the use of fossil fuels is necessary. Fossil fuels are very predictable and reliable: the supply is guaranteed (at least for the foreseeable future), you burn the fossils and produce power. This allows for the power grid to always be on.

States have started to introduce renewable energy into the grid system to compliment the use of fossil fuels. Energy from both renewable and fossil resources are being used together to power a city’s power grid. As long as there is renewable energy available, the power grid decreases the use of fossil fuel energy and gradually increases the use of renewable energy.

This process of gradually shifting to a renewable energy-predominant power grid is rather complex because it has to orchestrate supply from different energy sources, in different doses, at different times of the day. In U.S. there are 66 power grids cooperating with each other to use energy from at least 6 energy sources (utility-scale solar, distributed solar, hydro, natural gas, wind, and storage energy) in different doses, at different times. Building a system that can correctly and consistently rely on renewable energy to power the nation’s power grid is a very complicated. This system will have to employ the use of big data to understand and predict the behavior of both the weather (supply) and the people (demand).

Digital technology will be a requirement of such a system. The digitization of the electric system will increase the range of possible options, which will make decisions much more difficult for management to make, in too short of a time. The digitized renewable energy system will require the integration of machine learning and artificial intelligence technologies into the power grid operations.

Most new renewable energy power systems will face the issue of curtailment. Curtailment seems to be the bottleneck of the renewable energy industry at the moment, and it happens because of the inefficiencies present in the new and complex power system. Once curtailment is reduced from an average of 10% to close to 0%, it makes renewable energy sources more efficient and predictable; this will represent a big victory for the power markets and financial structure of the renewable energy industry.

Policy Recommendation:

Any policy meant to cripple traditional energy source use (i.e. coal, oil) on purpose must be eliminated. Shutting down a coal plant does little else other than hurting the economy (especially the local economy). Instead, President Trump should double down all resources on policy meant to encourage and aid the development of renewable energy.

The most complex part of the federal energy policy is to work with the private sector to create the most advanced and reliable renewable energy infrastructure/grid in the world. This is not simple; it is rather difficult: a power grid system that relies fully on renewable energy sources will resemble an immense computer system that feeds big data into machine learning technologies to create an artificial intelligence system that is always able to keep the power on. Multiple new industries must come together. As a businessman himself, President Trump and his Administration must use its business savviness to listen to the private sector and craft legislation and incentives that allow renewable energy companies to thrive. This new legislation must also allow and encourage easy cooperation between industries (renewable energy, big data, AI, machine learning, security).

President Trump should take the funds saved from the Paris Agreement, and part of his $1 Trillion Infrastructure budget and invest them in the renewable energy infrastructure system. Renewable energy proves to be much cheaper in the long term and will be easier to install once economies of scale are achieved. Because of this, redoing the entire U.S. infrastructure to include renewable energy components (i.e. roads repaved with solar panels) is more enticing and economically viable than rebuilding the U.S. infrastructure the old way (only brick and mortar without smart technology).

By focusing a large part of the $1 Trillion budget towards renewable technologies, President Trump would create thousands and thousands of jobs, would help renewable energy/clean tech companies innovate new technologies, and massively grow their production lines of supply to meet the increased demand. All the while, modernizing the United States and earning energy independence.

Currently, the clear world leader in renewable energy investment is China, which increased its spending by 17% to $103B in 2015, or 36% of global total. China has been extremely committed to developing its renewable energy capacity. Since 2011, it more than doubled its investment in renewables, achieving an impressive 38% CAGR over the past 10 years. Although the United States increased its investment this year by 19%, it came in a distant second, with $44B invested in 2015, or 15% of global total. Unlike China, the United States has not shown the same enthusiasm for renewable energy, recording a 21% CAGR over 2004-2015.

However, U.S. is still the number one country in terms of company-level funding: PE/VC financed renewables with $2.2B, while the public markets issued shares worth $9.7B in 2015. If President Trump would make it clear that renewable energy will be a large part of the $1 Trillion infrastructure plan, both the private and the public renewable energy markets would grow at a rapid pace, providing even more capital available to companies in the U.S. to develop and dominate the global renewable energy industry. Nothing spells security for capital markets like long-term energy contracts with the United States government.

In conclusion, the renewable energy race is much too important for the independence of the United States. It is a very complex industry and rapid success requires a close cooperation between the U.S. government and the private sector. The government’s efforts must be fully focused on growing the renewable energy industry, instead of regulating into oblivion parts of the coal industry. President Trump made logical business decisions when he pulled the U.S. out of the Paris Agreement and challenged the CPP. That was the easy part. The hard part will be to pass policies that allow the cooperation between renewable energy and multiple necessary industries such as artificial intelligence and machine learning. President Trump must get the government out of the way, by adjusting any legislation that would make it difficult for the renewable energy industry to grow. The President can turbo-charge the growth of this industry by dedicating a large part of his $1 Trillion infrastructure budget to rebuilding the U.S. infrastructure using renewable energy systems.

 

SOURCES:

International Energy Outlook 2016, US Energy Information Administration online

Global Trends in Renewable Energy Investment 2016, Bloomberg New Energy Finance online

World Bank Fossil fuel energy consumption

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