Climate Compass Blog

Why clean innovation makes business sense

Microsoft clean innovation panel

Left to right: Bob Perciasepe, President, C2ES; Seth Roberts, Global Director, Energy & Climate Change, The Dow Chemical Company; Michelle Patron, Director, Sustainability Policy, Microsoft; Peter Fuller, Vice President, Market & Regulatory Policy, NRG Energy; Paul Steffes, CEO and President, Steffes Corporation. Photo courtesy of Microsoft.

Companies have discovered that finding innovative ways to procure, generate, and store energy not only helps them meet their emissions goals, but also reduces energy costs.

That’s why the private sector is leading the charge to invest in clean technology as companies seek to engage suppliers through supply chains, increase competitiveness, gain access to new markets, and diversify to prepare for long-term decarbonization.

Reducing energy use at data centers has become a priority for Microsoft, as the company continues to expand its operations. Michelle Patron, Microsoft’s director of sustainability policy recently told an event co-sponsored with C2ES that the company considers this both a responsibility and opportunity.

Microsoft is using cloud computing and advanced analytics to meet its goal of procuring 50 percent of its data center energy from solar, wind, and hydropower by 2018, and 60 percent by the early 2020s. By using sensors to accurately collect and process real-time energy use data, Microsoft has reduced energy consumption by 15 percent in 125 buildings across its 88-acre Redmond, Washington, campus. The advanced data collection has also saved the company $10 million a year on energy.

Microsoft is also showing leadership in the drive to obtain more energy from renewable sources. A recent agreement with Seattle-area utility Puget Sound Energy (PSE) allows Microsoft to directly procure renewable energy in the region, rather than buying energy from PSE, which generates most of its power from fossil fuels. In return, Microsoft has committed to buying more renewable energy than required under Washington state’s current renewable portfolio standard. To make the deal beneficial for all ratepayers, Microsoft paid a $24 million transition fee that will be distributed back to PSE customers. The company will also continue to make payments to PSE’s energy efficiency and low-income assistance programs.

The Dow Chemical Company is also a leader in procuring renewable energy. Seth Roberts, the company’s global director for energy and climate change, told the gathering that the company has committed to supplying its Texas facilities with 350 MW of wind energy—equivalent to the electricity needed to power nearly 50,000 homes. Roberts pointed out that this would have not been possible a decade ago, when renewable energy prices were not competitive with fossil-fuels and natural gas in Texas.

On the production side, Roberts said the company is making insulation that goes into lighter, fuel-efficient cars. It’s also providing reverse osmosis technologies for water purification that use 30 percent less energy than other filtration technologies.

Peter Fuller, NRG Energy’s vice president of market and regulatory policy, said his company is making a significant investment in carbon capture, use and storage at the 240 MW Petra Nova project near Houston. As the world’s largest carbon capture project at an existing power plant, the facility captures more than 90 percent of carbon dioxide emissions and sequesters 1.6 million tons of CO2 annually.

Fuller said NRG is on track to meet its science-based goals of 50 percent reduction of absolute emissions from 2014 levels by 2030, and 90 percent reduction by 2050. The company had already reduced its emissions 36 percent by 2016.

Steffes Corporation, a North Dakota based manufacturer of residential and commercial electric thermal storage equipment, serves more than 200 electric utilities across the United States and Canada. “Thermal energy storage is an extremely efficient and cost-effective way of storing energy and managing the grid of the future,” said CEO and president Paul Steffes.

The company’s devices include ceramic storage units that can store 15 to 500 kilowatts of energy. Steffes uses tools such as Microsoft Azure to process big data in real time for more predictable energy regulation and greater integration of renewables, saving consumers money, reducing emissions, and contributing to a cleaner grid.

While climate change is one of the most pressing global problems, these companies have demonstrated that it also presents to them an opportunity to be a part of the solution by investing in clean technology that is good for business as well.

Video: Why Clean Innovation Makes Business Sense
July 19, 2017 at the Microsoft Innovation and Policy Center


 

Nations, companies driving toward cleaner cars

The British government’s recently announced plan to ban the sale of gasoline- and diesel-powered vehicles by 2040 shows the growing momentum globally toward a cleaner transportation system.

The ban is central to the British climate goal of zero emissions from the transportation sector by 2050. At the moment, the ban does not appear to be wishful thinking—a minister from the Department for Transport confirmed that Theresa May’s new government intends to honor its climate goals under the Paris Climate Agreement.

The United Kingdom joins other developed and developing nations that are taking action toward cleaner cars:

  • France made a similar announcement last week, identifying climate goals and improvements in air quality as reasons to ban gasoline- and diesel-fueled vehicles by 2040.
  • Both the Dutch and the Norwegian governments have discussed plans to implement similar bans by 2025, though legislators have not yet acted.
  • Parts of the German government have been advocating for a gasoline- and diesel-powered vehicle prohibition. The Merkel administration has a goal of putting one million electric vehicles (EVs) on its roads by 2020 (though the target will likely not be met).
  • India’s government plans to switch entirely to electrified vehicles by 2030.
  • In 2018, the Chinese government is expected to implement a program based on California’s ZEV program that would require at least 8 percent of an automaker’s total auto sales in China be EVs.

Automakers are also steering toward clean transportation. In July, Volvo became the first major automaker to announce a switch entirely from traditionally fueled vehicles. It will only produce cars that include an electric motor (either EVs or hybrids) beginning in 2019.

Other companies are continuing to innovate in the EV space:

Though not an automaker, Royal Dutch Shell is planning to partially pivot to hydrogen and biofuel production in response to anticipated reductions in oil demand within the next two decades. CEO Ben Van Beurden said he plans to buy an EV next year, citing concerns for the environment.

In the United States, cities and states are helping lead the transformation to clean transportation.

A consortium of dozens of cities is looking into buying more than 100,000 EVs of all types. Seattle’s transit agency plans to have the largest fleet of zero-emission buses.

States from Oregon to Texas to Connecticut offer incentives for the purchase of zero-emission vehicles. And 10 states follow California’s ZEV program that requires a growing number of zero-emission vehicles as a percentage of total auto sales.

U.S. electric utilities are also innovating, with 44 companies offering some incentive for customers to adopt EVs.

Making a U-turn in the drive toward clean innovation, at least for now, is the U.S. federal government. Federal greenhouse gas emissions targets through 2025 for vehicles, which were finalized under the Obama Administration, have been reopened for review through 2018 despite the U.S. Environmental Protection Agency finding that the standards are affordable and achievable. The U.S. Department of Transportation recently suggested that federal fuel economy standards through 2025 could be frozen at 2021 levels, pausing required improvements in the national fleet’s fuel economy.

More and more estimates show that global EV demand will rise considerably in the coming decades. Bloomberg New Energy Finance (BNEF) and the Energy Information Administration both increased their most recent adoption outlooks, with BNEF predicting that one third of new vehicles worldwide will be electrified by 2040. OPEC’s 2017 prediction for global EV sales by 2020 increased 500 percent over the 2016 prediction.

Nations, states, cities, and companies are leading the way toward a clean transportation future because it makes environmental and economic sense. The U.S. government should be doing all it can to foster this innovation, not curtail it.

 

New research highlights flood risks from sea-level rise

Recent scientific studies on the impacts of sea-level rise can help cities and businesses in coastal areas strengthen their climate resilience planning.  

Coastal flooding is expected to be a particularly costly climate impact. As the seas rise, U.S. cities from Miami to Atlantic City, New Jersey, now routinely deal with tidal flooding, also called nuisance flooding or sunny day flooding. But higher sea levels can also magnify flooding from more rare major storms like hurricanes.

Researchers at Princeton and Rutgers recently took into account the fact that coastal cities face this combination of small (high-probability) and large (low-probability) flooding events. They took observations from the National Oceanic and Atmospheric Administration’s (NOAA) tide gauges and used statistical techniques to measure the occurrence of historically low- and high-probability events across coastal locations. They then used sea-level rise projections to understand how the frequency of low- and high-probability events would change at each location.

The key insight from this study is that sea-level rise will have a different impact on flooding patterns in different regions of the country. Charleston, South Carolina, will see a larger increase in moderate floods than in severe floods (though both types of floods will increase), while Seattle will see the opposite pattern.

The study also demonstrates that flood frequencies will increase dramatically in many coastal areas by 2050. The blue and green dots in the maps below show the places where flood frequencies will increase by hundreds or even thousands of times from today (Alaska and Hawaii were also modeled in the study, but not shown in this map. The full dataset is here).


Source: Princeton University, 2017.

It’s no wonder, then, that cities and businesses across the country are taking steps to prepare for flooding and other climate change risks. We continue to urge them to work together to find the options that work best for the community overall. 

A year after a devastating flood, lessons in building resilience

Nearly one year after a devastating flood in Ellicott City, Maryland, shoppers pass by reopened businesses and shuttered ones in the same block of historic Main Street.

Nearly a year after a devastating flood, business is bustling again along Main Street in Ellicott City, Maryland, but signs of the disaster remain. Just steps away from shops with flags flying and doors open are others with “space available” signs and boarded-up windows. Construction equipment sits at the corner.

Climate change is increasing the odds that communities across the United States will face similar risks. To withstand these disasters, communities must become more resilient, and a C2ES report offers ways for state and local governments to help.

On July 30, 2016, more than six inches of rain fell in two hours in a low-lying area in central Maryland bounded by two rivers. Water gushed down a historic Ellicott City street lined with antique shops, art galleries, boutiques, and restaurants. The flood damaged 90 businesses and caused more than $22 million in damages to infrastructure.

The economic damage didn’t stop there. The county where Ellicott City is located lost between $42 million and $67 million in economic activity and as much as $1.3 million in tax revenues because of the flood.

With the help of loans from the state and private donations, more than 90 percent of the damaged businesses have reopened, and some new ones are moving in.

The National Weather Service classified the storm as a thousand-year rainfall event – meaning that scientists using historic data calculate a one-in-a-thousand chance of an event like this occurring each year. But as the climate keeps changing, the odds of seeing extreme weather go up, increasing the risks to communities and businesses throughout the country.

Almost 40 percent of small businesses nationwide never reopen their doors following a disaster event. Those closings can have an especially big impact; small businesses account for more than half of U.S. sales and jobs.

Small business owners often are unaware of their climate risks and lack the time and resources to prepare for the impacts. Fewer than half of Maryland small businesses that replied to a C2ES survey said they knew about climate risks. Most said they lacked resources to learn about them, and that available resources do not directly address local risks most relevant to them.

But state and local governments in Maryland and elsewhere can help their small businesses become more climate-resilient by following the recommendations in C2ES’s framework for engagement.

When engaging with small businesses on weather and climate resilience, the C2ES framework recommends state and local officials:

1.    Use trusted messengers to convey climate information. These include organizations that small businesses frequently interact with, like city or county chambers of commerce, trade associations, and other business organizations.

2.    Leverage existing channels of communication. State agencies and local agencies often already interact with businesses on preparedness, emergency planning, flood management, long-term planning, and economic development. Climate resilience information can be incorporated into these interactions. Likewise, existing resilience efforts can be broadened to include the business community.

3.    Identify new opportunities. New programs and information can be developed on small business resilience, such as public-private partnerships and business resilience networks. Training materials and other resources can be distributed via trusted messengers.

4.    Distribute targeted information. Businesses need more information on what they can realistically do to become more resilient to extreme weather and climate change. Sector- and location-specific information can help businesses better understand their risks and opportunities for enhancing resilience. 

The extreme weather risk to communities like Ellicott City will only increase as the Earth’s atmosphere continues to warm from rising greenhouse gas emissions. But state and local governments have opportunities to open new channels of communication to help small businesses become more climate resilient and able to survive disasters.

Bipartisan support grows for carbon capture

Bipartisan support is growing on Capitol Hill and beyond to accelerate carbon capture deployment on power plants and industrial sources like steel and cement plants. This support comes from lawmakers who share a common interest in increasing the production of domestic energy resources and reducing carbon emissions.

On July 12, a bill co-sponsored by 25 senators was introduced that would provide a performance-based incentive to capture CO2, put it to productive use, and store it safely and permanently underground.

The FUTURE Act (Furthering carbon capture, Utilization, Technology, Underground storage, and Reduced Emissions) would extend and expand a federal tax credit, known as Section 45Q, which incentivizes capturing carbon dioxide (CO2) from power and industrial sources for enhanced oil recovery (EOR) and other uses. CO2-EOR is a decades-old process that produces domestic oil from existing fields, while safely and permanently storing billions of tons of CO2. Recent analysis demonstrates its climate benefits.

Bill supporters cross the aisle and the country. They include Sens. Heidi Heitkamp (D-ND), Shelley Moore Capito (R-WV), Sheldon Whitehouse (D-RI), John Barrasso (R-WY), Tim Kaine (D-VA), and Lindsey Graham (R-SC).

Other bipartisan bills would help unleash private capital to scale up more carbon capture projects. The Carbon Capture Improvement Act, introduced in April by Sens. Rob Portman (R-OH) and Michael Bennet (D-CO), would authorize states to use private activity bonds to help finance carbon capture equipment. A companion bill was introduced by Reps. Carlos Curbelo (R-FL) and Marc Veasey (D-TX). Private activity bonds are widely used to develop U.S. infrastructure, such as airports and water and sewer projects. (Join a free C2ES webinar on private activity bonds July 24.)