Episode Description
On this episode of Climate News Weekly, James Lawler is joined by GreenBiz Editor at Large Heather Clancy, as well as regular contributors Dina Cappiello and Julio Friedmann. They discuss the latest updates to the Science Based Targets Initiative dashboard and what they really mean for companies’ climate goals, what happens at the Aspen Ideas: Climate festival and CERAWeek, as well as the DOE’s latest Voluntary Carbon Dioxide Removal Purchasing Challenge, and more.
Transcript
James Lawler: [00:00:00] Welcome to Climate News Weekly. I am here with Dina Cappiello, Julio Friedman, and a guest contributor, Heather Clancy, who joins us from Greenbiz, where she is editor at large. One of the articles that we're going to cover today is an article that Heather wrote for Greenbiz about The Science Based Targets Initiative and the participation or the downgrading of some of the larger corporate names under that initiative.
So Heather, a couple of years ago and then maybe less so more recently, one would hear a lot about companies committing to so called science based targets, you know, in their emissions reduction, that they were joining this SBTi initiative and signing up to reach net zero by a particular deadline. Can you tell us sort of what does that mean or how should we, how do we interpret that kind of commitment, and then do we need to reinterpret that?
Heather Clancy: Yeah. So The Science Based Targets Initiative, which is what [00:01:00] SBTI stands for, was created to help companies align their climate aspirations, their corporate emissions reductions with science. So, you know, whatever contribution that their company in their industry should be making to meet the goals of the Paris Accord.
They're primarily a validation body. So like a company will come up with what it thinks are reasonable targets and it will submit to SBTI for validation. It has over the past five or six years really become sort of the gold standard of validation for a target. And that's, you know, why there were so many companies rushing to commit to their frameworks, and they have just, I should be clear. I mean, there's, there's, this story is super nuanced and it's super evolving, but they have various ranges of targets. So you can set a near term target like I am going to do this by 2030, or I'm going to become net [00:02:00] zero. And what has really happened recently and what I wrote about this week was related to the net zero target.
So it's, it's the hardest thing for a company to commit to. It means addressing emissions at scope one, which is your own emissions, scope two, what you purchase through energy and fuel, and scope three, which applies to basically everything else. So, um, what's at issue really in this whole, um, situation is the challenge of setting a target for scope three.
James Lawler: Yeah. So 239 companies, including Microsoft, Unilever, Walmart are going to miss their net zero deadline. And SBTI Initiative has changed the status of a number of companies on the dashboard that is on its website to reflect commitment removed to achieve that goal.
Heather Clancy: Yeah. So I think there's something like 8,000 commitments [00:03:00] in, in the database that, that Science Based Targets Initiative manages, um, could be slightly more than that, and they have a dashboard. So the dashboard really, it measures someone's committed to a target, someone is in process of setting a target, it's been set, and then there's a validated, um, you know, like they're green lighted, and then, but sometimes, um, the status becomes commitment removed.
And what that means is that the company may have committed to something, but it didn't manage within the two-year compliance timeframe to actually submit their idea.
Julio Friedmann: Right. That's exactly what had happened with the Kyoto Protocol. Every country that signed the Kyoto Protocol met its agreements. Guess what? Canada dropped out of the Kyoto Protocol. United States never signed the Kyoto Protocol. So it ended up being that the Kyoto Protocol was fully signed and ratified and didn't deliver anything. So, as we go through this [00:04:00] journey, where companies make strong commitments and then they realize what they are capable of doing and then they revise those commitments, this is part of what should actually happen. It is I think both appropriate to say well, perhaps that means these companies are behind the curve, it is also true that many of these companies are the most forward acting the most forward leaning, right.
James Lawler: Yeah, right. So Walmart is a good example of that, right?
Julio Friedmann: Yeah, and Microsoft.
James Lawler: Right, and Microsoft certainly. So those two, Walmart being one of the first companies to set its net zero targets, you know, for scope one and two and scope three is where the, the challenges are, and that's really the basis on which they're adjusting their commitment.
Heather Clancy: It requires, uh, measuring the impact and that the tools for doing so are very rudimentary right now at a lot of companies, many companies measure their emissions by using spreadsheets. You know, they have tons of enterprise resource [00:05:00] planning systems and software systems that help with their financials, but they don't have them on the, uh, emissions reduction tracking or waste management tracking or water.
I mean, many of these other things that, that really apply to setting a, a climate friendly, if you will, strategy. And I think that's part of what it is. It's really the measurement. Like, how do you measure something that, uh, your plant in Vietnam is building for you? How do you measure their emissions? Do you trust that what they're saying is true? How do you get that information?
Like, so no one company can do this on their own. And that's part of the issue is like, when you're setting a target, you have to work with all of your suppliers. But if, if, you know, this supplier works with 80 companies, how do you, how do you scale that? How do you build a network that can inform each other about what's going on, um, without spending all your time doing that and not actually running your business, you know? [00:06:00]
Dina Capiello: I just got back, as you know, from, um, Aspen Ideas, Miami, and I was fortunate enough to have a conversation with Apple's Lisa Jackson, who, as you know, is the equivalent of their CSO, although her title is VP, Environment Policy and Social Initiatives. And we spent about a half hour on stage and you know, here's another company that made a big bold pledge, and I think it was interesting to hear from her perspective, how much of a stretch goal that was and how difficult it truly is.
And listen, I'm not, you know, praising Apple here and endorsing Apple, but I, I, I think that they've been kind of eyes wide open on what is possible and what isn't possible. And like, one of the things we talked about that I think is like relevant to this conversation is right now they can't reduce 10 percent of their emissions. So they are doing nature-based solutions as, as a step, [00:07:00] right? Cause it's urgent right now. So I think that that's a really interesting perspective from a massive company with a massive footprint, lots of scope three emissions about really how challenging this is, and, and one that has made some, really critical investments in renewable energy.
Um, she's pretty confident they're going to meet their net zero target by 2030. Their big target is net zero by 2030 for their entire value chain.
James Lawler: So scope one, two, and three net zero by 2030. That's their goal. Is that right?
Dina Capiello: Yes. I believe so. Yes, it's the entire value chain.
James Lawler: Okay.
Julio Friedmann: A question that your listeners may be asking is, does this represent a retreat or does this represent an admission of difficulty? And those are quite different things. You know, the companies that have been most forward leaning, most proactive, most, uh, ambitious are the ones who are stepping back now and saying, it's harder than we thought we, we are going to need to [00:08:00] extend our goals.
Um, some people can consider that a retreat, other people can consider that at an admission of difficulty in the context of SBTI, this is the discussion. Like, what does this mean from a scientific perspective? If a company like Walmart or Apple says we've crunched the numbers, we're going to miss our deadline, this is what's possible now, and they do it with scientific integrity and rigor, that should actually be welcome into this family of, uh, activities.
James Lawler: Definitely, definitely. Let's move to another story. Dina, could you just say just a few words on where you were last week, Aspen Ideas, and just what you were doing.
Dina Capiello: Yeah, so I just got back from Miami where I attended the Aspen Ideas Climate Festival. I was down there obviously on behalf of RMI, founded as Rocky Mountain Institute, but had the pleasure of sitting down with Lisa Jackson, um, who leads sustainability efforts at Apple and who [00:09:00] I covered as a reporter. So, so we go way back when she was EPA administrator, the first for, uh, President Obama.
And so we also talked about, you know, um, affecting change from public policy, right, from the government side and now from the corporate side and and what she thought about that. Um, yeah, that was one of the many things I did wnd then I also led a couple of sessions on visioning and, uh, with future climate leaders of what a future in 2150 would look like given the exponential change that we're seeing now in certain sectors of the clean energy economy.
James Lawler: So, um, there is some news this week about the US Department of Energy, Fossil Energy Carbon Management Division, launching a voluntary carbon purchasing challenge. Julio, tell us about this. What is this voluntary carbon dioxide removal purchasing challenge and what is the DOE doing? Who's getting involved? What will it mean?
Julio Friedmann: Sure. So [00:10:00] using money that was appropriated in the bipartisan infrastructure law, the Department of Energy basically created a purchasing pilot program in which they said, we are going to buy CO2 removal as a service, and we're going to put out a solicitation, and get inputs.
They did that a while ago. Uh, and, uh, in fact, they are going through right now and reviewing all of the submissions to that response. One of the things that they wanted very much to do is to crowd in money from the private sector. 35 million is a great start, we're going to learn a bunch from that, but it's not going to cover all of our needs by any stretch. And so they wanted to get private companies to start doing more of the same and they announced this challenge and the letter of intent requests that has come from it. And in doing so, also pointed out that Google has already made that commitment. Google has said, hey, we got 35 million dollars, we want to do the same thing, right.
This is part of the basis on which this [00:11:00] pilot program was created. They said, we're going to identify good projects that will provide a basis for companies to start buying more, that will incentivize people to scale good technologies, to avoid bad projects and invest in good ones, to lay sort of procurement rules for the government, all of this important stuff and in doing so, scale the entire enterprise. So, uh, I thought it was actually very exciting to see that and hopefully we'll see more.
With her announcement, Secretary Granholm is also throwing down the gauntlet and saying, hey all, we got something we'd all like you to do. And if they can turn 35 million into 200 million, that's a win for everybody right?
Dina Capiello: And this is to basically, Julio, this is basically to just create a market and an incentive for carbon dioxide removal, right? That's what, that's what's behind it.
Julio Friedmann: Right. So, all advanced technology began with government procurements. All of them. Doesn't matter whether it's chips or flat screen TVs or [00:12:00] batteries or LEDs, or solar panels, governments buy things and that gets you down the supply curve. So they're trying to do that with CO2 removal as well and it mirrors other countries, the European Union, the UK have also made purchasing commitments they just haven't begun buying yet. So they've said they'll do these CO2 purchases.
James Lawler: There's also an interesting feature of this commitment. Um, and I'm reading from Department of Energy's website and now they're their press release on the effort, while no new funding will be made available through this challenge, “it aims to foster further private spending on removal credits by connecting top suppliers and buyers, as well as creating a leaderboard of carbon removal purchases. This leaderboard will enhance market transparency, giving organizations interested in carbon removal credit purchases greater confidence to move forward. So to encourage as many entities as possible to join the challenge, DOE does not envision a floor to participate and will encourage purchasers to disclose all removal credit purchases, not just those matching the DOE Purchase Pilot Prize Winners.” So [00:13:00] it's a, it's an effort to stimulate involvement from the private sector and also create this transparency and market confidence.
Julio Friedmann: Yeah. And importantly, now you can count it against your SBTI commitment.
James Lawler: That's right. It connects so well, as we do here, on Climate News Weekly, to other stories. Brilliant.
Dina Capiello: Can I ask a crazy question, Julio? Which is, As CDR starts, you know, comes, develops, like, wouldn't that be a great barometer for a price on carbon? We would know, actually, how much, roughly, it would cost to take carbon out of the atmosphere. This has been a long-time debate, as you know.
Julio Friedmann: Right.
Dina Capiello: Pricing carbon, we would actually have a real number based on the technology.
Julio Friedmann: That is not a crazy question. That's a clever question.
James Lawler: Yeah, I love that.
Julio Friedmann: And, this has been part of the discussion. There is a question as to what the social cost of carbon is, right? It's actually very hard to estimate. It's very hard to calculate. It's very hard to put into policy. That [00:14:00] is a theoretical economic exercise. This kind of activity the Department of Energy is doing is the opposite. They're like, we're going to create empirical data. What will people pay and what does it cost? And based on that, we can have a different perspective on what this is.
Especially for the most expensive of these technology baskets, the direct air capture people, that is the backstop technology. That's the one that we can scale a whole lot and cost the most. So if you're going to peg a global price on carbon to anything, the backstop technology ends up being important.
James Lawler: Okay. Um, Julio, what is CERA week? And what are you looking forward to there?
Julio Friedmann: So traditionally CERA week has been the opposite of where Dina was last week. The Aspen Ideas, uh, Environmental Program actually was designed explicitly as a counterbalance against CERA week where they said, we're going to focus on energy transition, CERA week, we'll focus on existing energy. Happily CERA week is moving much more towards energy transition, and happily Aspen is no longer counter [00:15:00] scheduling these things, so people can go to both, which is helpful.
So CERA week, C-E-R-A for your listeners, uh, is Cambridge Energy Research Associates. This was Dan Yergin original advisory group, Dan Yergin, author of The Prize, The Quest and The New Map, uh, now owned fully by S&P Global. So they have a big party and event in Houston every year, ministers and leaders from around the world, whether they are the head of Aramco or the Minister of Industry from the UK, all of these people come and they talk.
Uh, that includes generally leaders of energy companies, utilities, and people who set policy, important, uh, legislators, all these people come to Houston. Traditionally, it's been like a few thousand people over the past couple of years, it's grown a lot and a lot of the people who are coming now are coming to discuss and work on energy transition.
A lot of this is happening in what's called the [00:16:00] Agora, which is a sidebar program. That's where I'll be speaking around biomass and carbon removal and the Agora is a place where they focus on innovation. There's two anchor hubs, one on hydrogen, one on carbon management, one on climate as well and this brings people who are in the traditional energy sector into thinking about energy transition.
Dina Capiello: And we will be there too, RMI. I will not personally be there, but we will have a bunch of people on the ground talking about hydrogen and some of the other technologies, um, needed for the transition.
Julio Friedmann: One thing I would leave your listeners with about CERA week, this is where the carbon is, this is where the emissions are. So it's important for meetings like this to actually take place to reconsider their future, to think about the energy transition, to look at new technologies and innovation. Like, if we want to reduce emissions, this is one of the important meetings where this will take place.
It is not by any means a done deal. There's going to be a lot of talk about stock buybacks [00:17:00] and production increases and shell and all of these other sorts of things. There'll be a lot of talk about geopolitics. There'll be a lot of talk about Russia and Ukraine, about the future of demand for oil and gas, all of these will be on the agenda, but I'm excited about the fact that the biggest energy conference in the world around traditional oil and gas about traditional energy is now thinking hard and deeply about the energy transition.
James Lawler: Yeah, all right. We have two stories from Financial Times that we'd also like to touch on this week. One is that the European Union has delayed its deforestation import rules. So these are a set of rules that the EU had formulated around basically supply chains for forest products, as I understand it. Um, so if you wanted to import something related, you know, you wanted to import a wood product, you had to be able to, to say definitively that it did not come from a deforested area. And this set of rules has [00:18:00] faced some significant pushback, and so there's some delays, but Julio, tell us how to think about this, what's going on?
Julio Friedmann: Yeah, this is kind of the theme for the episode, isn't it? The EU set very ambitious targets that were quite reasonable. They said, we do not want to encourage deforestation, we want to stop it and therefore we want to set rules around imports into our economic block. And in doing so, we want to discourage deforestation formally through standards and regulation. Great idea.
As they got into it, they also discovered this was harder than what they thought. Real scientific validation of this, understanding and securing the supply chains, making sure there's enough supply to meet EU demand, all of these things are sort of emerging and so they've delayed the implementation of these rules. It doesn't say the rules are bad or wrong. It just says we need more time to make sure we do it well. So again, it reflects this idea of high ambition, then being countered a bit by reality, you make a new plan as you go.
James Lawler: Uh, one more story that we saw this week in Financial [00:19:00] Times was on the aviation industry being likely to miss its target to reach net zero by 2050. This article is based on statements from Ruud Sondag, who is the recently departed head of Amsterdam Schiphol Airport. How is the airline industry thinking they would actually get there in the first place, if they were at all, Julio, and what has dawned on them since making their initial commitment?
Julio Friedmann: Right. So net zero by 2050 is good for everybody so everyone's trying to get there, right, including the aviation sector. Um, very few groups have been more ambitious or more proactive than Schiphol Airport. Uh, very few groups have been more proactive and more, uh, ambitious than the Netherlands government and so the fact that Ruud is saying that this is harder than we thought is again, part of the theme of the week. It turns out that airplanes fly on jet fuel.
James Lawler: Aha! [00:20:00]
Julio Friedmann: This is an important thing that - heavier than air flight requires a lot of design characteristics that you can't move very much. There are plans to do things like make hydrogen airplanes and refit airport infrastructure for hydrogen, probably in the near term for short haul only, which is only a small fraction of the emissions, you're not talking about going from, you know, Los Angeles to Japan on hydrogen by 2050. It just will take too long and be too hard.
James Lawler: When do you think people will be flying with hydrogen or electric planes? Like at what, if you had to peg that to a year when this would actually be happening?
Julio Friedmann: From a technology perspective if we pushed really hard, maybe 2070 we could have a fully decarbonized system with zero carbon fuels and with electricity and stuff like that. My guess though is never.
James Lawler: Right.
Julio Friedmann: My guess is we will never do that and the reason why is because we can make sustainable aviation fuels That is [00:21:00] also hard, that is also difficult. And part of Ruud's comments reflects the fact that it's simply going to take longer than people thought. We need to scale up the supply chains. Right now, sustainable aviation fuel is made from used cooking oil, which is not exactly scalable, and it represents less than 0.1 percent of the aviation fuel made in the world. So Ruud's comments reflect that reality, it's just going to be harder and take longer than we thought.
James Lawler: So to give a little bit of context around that, I believe that last year in the United States, there were about 37 million gallons of sustainable aviation fuel that were actually produced. Um, 37 million gallons, that's 37 million out of 1.4 billion gallons.
Julio Friedmann: Right, and so it's just a very tough slope. So when somebody like Ruud who really knows his business, who is committed to the cause of climate action, who has worked as hard as anyone in the world to make these changes comes out and says, we're going to miss our [00:22:00] targets, that's important to know.
It's also not a declaration of failure. It's a warning bell. We might be able to meet our targets, but we sure as shooting, are going to have to spend a lot more money, innovate harder and do more work. We're not on an endless glide path that delivers this, we have to increase ambition, we have to match that with increased investment, infrastructure, innovation, all these other things.
Heather Clancy: So I'm optimistic about a couple of things. One is that I do think companies are really finally realizing that they need to become more involved in policy. And I know that there's concern over big business buying policy and we have corporations in the United States.
I'm speaking only for the U.S. right now because I don't have a good enough handle on other countries, but you know, there is frustration with how much corporate money goes toward, um, policy setting, but I do think that we will see more companies speaking [00:23:00] up on climate. Unilever actually just published this great policy guide, a couple of weeks ago about how it's going to engage with trade associations.
So, the U.S. Chamber of Commerce in particular has been very, um, much in the way of many climate regulations. And I think you're going to see companies start to take that on and say, you know what, we really need the policy to support us, we cannot do this alone. If there is not a, a price to pay for not doing this then it's not going to happen because the bad actors will make sure that it doesn't happen.
So I'm really optimistic about that. I feel like that tide is starting to turn there. I also feel that there is just an intolerance, um, among younger folks for this kind of behavior. No one's going to have an answer right away, you can't just flip a switch, I mean, that's the only thing that we need the really good intentioned activists to know is just you can't just turn the power off. Like [00:24:00] I'm sorry, you don't want your power turned off and no one does so it's going to take longer than we want but I do feel that, um, the, the sort of groundswell of individuals that really care about this and that are now coming into, um, the workforce and up into middle management, up in, you know, and they can change how operational, um, decisions are made that include those things. So I'm optimistic about that.
James Lawler: That's it for this episode of Climate News Weekly. Heather, thanks so much for being here. Julio, Dina, great to see you guys, and thanks so much to our producers, Emma Crow-Willard and Martin, who put this together each week. See you next week.
Climate News Weekly: SBTI updates, CERAWeek, and more