Climate Compass Blog
|Our "Beyond Paris" panelists (l to r): C2ES President Bob Perciasepe, Tamara "TJ" DiCaprio of Microsoft, Steve Harper of Intel, Alex Liftman of Bank of America, and Cathy Woollums of Berkshire Hathaway Energy.|
The Paris Agreement is a roadmap for action on climate change, but how exactly will we get to the destination: a low-carbon economy?
Participants at a recent event (see video) co-hosted by C2ES and Microsoft, the newest member of our Business Environmental Leadership Council, at Microsoft’s Innovation and Policy Center in Washington, D.C., agree that business leadership will play a key role.
At the event, White House Director of Private Sector Engagement Rob Diamond praised companies for sending a strong signal of support for climate action in the run-up to Paris. More than 150 companies, including those on our panel – Bank of America, Berkshire Hathaway Energy, Intel, and Microsoft – have joined the American Business Act on Climate Pledge.
Diamond said he hopes more will follow their lead in pledging to reduce greenhouse gas emissions, expand clean power, improve energy efficiency, and finance climate action. “The amount of effort the private sector has taken is fantastic,” Diamond said. “Keep it up.”
Business leadership has moved far beyond saving energy in a company’s own facilities. It now means investing in clean energy projects, reducing emissions throughout the supply chain, helping customers reduce their carbon footprint, and making an economic case for policies that address climate change.
As Steve Harper, Intel’s global director of environment and energy policy, put it: “The price of leadership has gone up. You need to do more, and you need to say more, and you need to advocate for more in order to continue to be seen as a leader in the corporate world on the climate issue, which we agree is society’s biggest challenge.”
Here’s what some leading companies are doing to step up to that challenge:
Bank of America: Alex Liftman, global environmental executive at Bank of America, said the Paris Agreement signals markets about the direction to go and provides a global roadmap for how countries plan to invest. Bank of America has increased its investment in low-carbon activities from $50 billion to $125 billion by 2025. The bank is also partnering with other financial institutions on an $8 billion Catalytic Finance Initiative to advance innovative financing structures for investments in clean energy and sustainability. Liftman said, “We’re trying to bring financial scale to the equation.”
Berkshire Hathaway Energy: Berkshire Hathaway Energy is the largest regulated owner of renewable energy generation in the U.S. It has invested more than $15 billion in renewable energy projects, and has pledged to invest up to $15 billion more going forward. Cathy Woollums, senior vice president for environmental services and chief environmental counsel, said the Environmental Protection Agency’s Clean Power Plan created a roadmap forward, and the Supreme Court’s stay creates uncertainty. “We wish that hadn’t happened,” she said, but there are still opportunities to move forward in the interim. “Rather than litigating, we are leading.”
Intel Corporation: Intel is one of the largest purchasers of renewable energy in the U.S. Since 2005, Intel has also cut in half its use of fluorinated gases, which contribute to global warming. As a technology company, Intel uses energy to make products, but Harper noted those products can also help others reduce their energy usage. Intel is engaging with states to incorporate intelligent efficiency into plans to implement the Clean Power Plan, and is working with countries such as China to push the development of markets for renewable energy.
Microsoft: Microsoft has been carbon neutral since 2012. Tamara “TJ” DiCaprio, senior director of environmental sustainability, said the company set an internal price on carbon that has helped it increase operational efficiency and invest in clean energy. Microsoft has purchased more than 10 billion kilowatt hours of green power, and reached more than 6 million people through the purchase of carbon offsets from community projects. The company is also engaging with customers to reduce their energy and resource use.
Existing and expected policies can get the United States close to its Paris Agreement goal of reducing net greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025. But to get the rest of the way will take more – including business action. Through platforms such as the Business Environmental Leadership Council, C2ES will continue to work with leading businesses to support strong climate policies and show climate leadership.
After witnessing the historic signing of the Paris Agreement by 175 nations, we now need to turn our attention to fulfilling its promise.
As its nationally determined contribution to the agreement, the United States set a goal of reducing net greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025. In a new paper, C2ES outlines how expected and in-place policies could get us close to the goal line -- reducing emissions by as much as 22 percent. Getting the rest of the way can likely be achieved through a mix of additional policies, city and business action, and technological innovation.
First, let’s look at how we can get to a 22 percent reduction.
U.S. net emissions are already down more than 9 percent from 2005 levels due to market- and policy-related factors, including a shift in electricity generation from coal to natural gas, growth in renewable energy, level electricity demand, and improved vehicle efficiency.
The C2ES business-as-usual forecast, drawn from a number of analyses, projects an additional 5.6 percent reduction in net emissions through such policies as greenhouse gas standards for vehicles and the Clean Power Plan.
The rest of the anticipated emissions reductions is expected to come from new, higher estimates of future carbon sequestration and additional measures under development, including steps to strengthen fuel economy standards for medium- and heavy-duty trucks, reduce methane emissions in the oil and gas sector, and reduce hydrofluorocarbons (HFCs).
Now, how will we address the remaining gap of at least 270 million metric tons carbon dioxide equivalent?
Additional federal policies would help. For example, greenhouse gas standards could be set for major industrial sectors under section 111(d) of the Clean Air Act, the same section that underlies the Clean Power Plan.
Technological advances that lower the cost of emissions reduction will also undoubtedly play an important role. Over the next five to 10 years, battery storage technologies are expected to improve by a factor of 10, which would support the integration of more renewable generation. A promising design for a natural gas power plant with nearly 100 percent carbon capture will enter the demonstration phase next year and could be commercialized soon after. And agricultural advances are leading to more sustainable crops able to sequester more carbon dioxide in their root systems.
Stronger efforts by cities will also be critical to filling the gap. A growing number of cities are working to improve the energy efficiency of residential and commercial buildings, which account for for 41 percent of total U.S. energy consumption. Greater adoption of Property Assessed Clean Energy (PACE) programs, which help finance energy efficiency and renewable energy projects, could significantly reduce city energy demand. Similarly, city programs to build out infrastructure to increase the adoption rate of electric vehicles will, in-time, appreciably lower transportation-related emissions.
Companies, too, will play a key role. Twelve leading companies signed the C2ES statement calling on governments to quickly join the Paris climate pact and pledging to work with countries toward the domestic measures needed to achieve their national emissions-cutting contributions. More than 150 U.S. companies with a combined market capitalization in excess of $7 trillion joined the American Business Act on Climate Pledge – committing to reduce emissions, increase renewable power, or finance climate efforts. And the White House is calling on more companies to join the initiative.
The United States has significantly reduced its greenhouse gas emissions over the past decade. Cutting emissions 26 to 28 percent below 2005 levels by 2025 is a challenging goal. But many options remain untapped, and concerted efforts across multiple fronts can get us across the goal line.
C2ES recently headed to Anchorage, Alaska, for a two-day Solutions Forum workshop to help Mayor Ethan Berkowitz launch an effort to make the city more climate resilient.
While many cities have undertaken resilience efforts, Anchorage is integrating the corporate community into its efforts as few others have done. About 50 business leaders, city, state, federal and tribal officials, nonprofit organizations, and other experts shared their experiences addressing climate change impacts and enhancing resilience.
Alaska is on the front lines of climate change. Businesses, cities, and Alaska Native communities are all experiencing the impacts. Alaska has warmed at more than twice the rate of the rest of the United States, and Anchorage experienced its two warmest years on record in 2014 and 2015. The region has also seen less snow than normal, with 2015 snowfall totaling about half the average.
These changes have already affected winter recreation activities, important to the economy and also the spirit of a city that prides itself of having fun in the cold. This year, a trainload of snow had to be dumped on Anchorage’s streets for the ceremonial start of the iconic Iditarod sled dog race.
More frequent icing conditions and low visibility caused by warming are affecting aviation—an important mode of transportation in a state where more than 80 percent of the communities are not served by roads. Warming temperatures have also contributed to earlier snowmelt, which can lead to a month-longer fire season.
Anchorage is no stranger to preparing for extreme events. Because of Anchorage’s experience with disasters, from earthquakes to wind storms, many aspects of the city are well prepared with existing planning structures, coordination efforts, and ongoing tracking in place.
The private sector also is keenly aware of how external events can affect their employees, customers, and community. Companies’ experience with risk management and emergency management plans and drills can be coordinated with city and state agencies to build and maintain local resilience.
Workshop participants worked through the Disaster Resilience Scorecard, a tool developed by IBM and AECOM and used around the world. The scorecard helps cities establish a baseline of their current level of disaster resilience, identify priorities for investment and action, and track their progress in improving their disaster resilience over time.
Now that Anchorage has developed this baseline, C2ES will continue to work with stakeholders to explore these insights and questions that follow to helping businesses, states, and cities in Anchorage and beyond collaborate on climate resilience.
International negotiators made significant progress last week in Geneva at the first of several meetings this year aimed at phasing down hydrofluorocarbons (HFCs) through an amendment to the Montreal Protocol.
HFCs are fast growing, powerful greenhouse gases used as substitutes for ozone-depleting substances in refrigeration and air conditioning, as blowing agents, and as aerosol propellants.
In a stark departure from meetings in previous years, a number of key issues essential to reaching agreement on an HFC amendment were tentatively resolved and substantial progress was achieved on others.
For example, Saudi Arabia, Kuwait and other Gulf states had raised concerns about the lack of proven substitutes for air conditioning that are suitable for the extreme heat experienced in their countries. A proposal to allow a time-limited and geographically targeted exemption until substitutes have been demonstrated was proposed and tentatively agreed to at the meeting. (See our brief on how to structure an exemption.)
Another issue raised in the past by a number of parties concerns the potential conflict between actions on HFCs taken under the United Nations Framework Convention on Climate Change (UNFCCC) and any HFC amendment under the Montreal Protocol. In Geneva, there was broad agreement that the treaties were independent of each other, that they could be implemented in a way that would be complementary, and that an HFC amendment would not in any way require a prior authorizing act by the climate treaty.
A good deal of time was spent discussing issues related to funding associated with HFC controls in developing countries. While agreement exists that the Protocol’s Multilateral Fund would continue to be the primary vehicle for providing financial support for emission reduction projects, issues concerning guidelines detailing what projects would be funded were left unresolved. Among these issues is payment for licensing of intellectual property rights for patent-protected technologies to produce and use some of the substitute chemicals. (See our brief: Ten Myths About Intellectual Property Rights and the Montreal Protocol.)
The Tesla Model 3 has surged onto electric vehicle (EV) scene, with more than 325,000 hopeful customers placing $1,000 deposits in less than a week.
Since all-electric vehicles can significantly reduce greenhouse gas emissions in the second largest emissions sector, greater interest in EVs could result in meaningful progress in addressing climate change. Looking past the initial wave of excitement, though, what does the Model 3 really mean to the EV market?
The Tesla Model 3 is a next-generation EV with a base price of $35,000 and an expected battery range of 215 miles. The vehicle is noteworthy because it reduces two primary barriers to EV adoption: price premium and range anxiety. Currently, all-electric vehicle models only allow prospective owners to reduce one of those barriers – you can choose between a relatively inexpensive vehicle with a limited range or an expensive luxury vehicle with a long range. The Chevy Bolt, which is slated for production in late 2016, will be the only vehicle with comparable range and performance when the Model 3 is released.
So how much of a game-changer is the Model 3?
Well, 325,000 deposits for a vehicle that will not begin production for another 18 months is surely an eye-opener, given that the number of deposits equals about two thirds of global EV sales for all of last year. Domestically, the leading all-electric model so far this year has been the Tesla Model S, accounting for just over 6,000 vehicles. So far this year, consumers have bought just over 15,000 all-electric vehicles that they could drive now, without an 18-month waiting period, which speaks volumes about the excitement for the Model 3.