By Aaron Dorman
“Fighting climate change and growing the economy go hand in hand,” Michael Bloomberg insisted at the Global Climate Action Summit this fall.
Al Gore, California Gov. Jerry Brown and Harrison Ford repeated this message throughout the main and affiliate events that gathered hundreds of regional politicians, business leaders and environmental advocates to the summit at the Moscone Convention Center in San Francisco.
Bloomberg and Brown co-chaired the summit, billed as a way for cities and non-state actors to form coalitions with each other and the private sector to forge a path to carbon draw down and a renewable economy. Ford and other celebrities such as Alec Baldwin, delivered powerful speeches. Gore rallied the troops.
But they weren’t the only stars. Corporate behemoths such as PepsiCo and dozens of others rolled out sustainability plans to combat climate change.
But that didn’t stop protests. Despite Brown’s (and San Francisco Mayor London Breed’s) consistent opposition to the Trump Administration and promises to make California a leader in the renewable economy, demonstrators gathered outside the convention center and made their way into the main hall to decry California’s continuing fossil fuel portfolio of oil and fracked natural gas.
But even if you came to the summit skeptical that businesses could drive climate solutions, it was hard not to be impressed by the sheer volume and scope of action plans—science-driven goals and commitments—put forward by corporations. Maybe the economic system that’s driving climate change with a dependence on fossil fuels can be the economic system that solves it.
Elan Strait, the U.S. Director of Climate Campaigns and manager of the “We Are Still in Initiative,” celebrated the collection of hundreds of local governments, states and companies that formally announced their fidelity to the Paris Agreement at the summit to counteract the Trump administration’s withdrawal. He also offered a compelling framework for how cooperation between corporations and green groups can meaningfully impact climate change.
“Because consumers are now demanding the places they buy products from to have sustainability policies or have products [that are sustainable], corporations are turning to environmental groups about what is the right thing to do,” Strait said. “I think the companies that are most cooperative are the consumer facing ones. If you sell a product directly to a consumer, then you often have to have a sustainability policy.”
Strait stressed that renewable infrastructure is now an integral part of many local and national economies. The ‘green’ development sector was on full display during the event, as the Bay Area heralded its own innovation and leadership of green infrastructure including: urban forests, public transportation, renewable energy and net-zero carbon buildings.
Among the hundreds of affiliate events that took place across the region, several highlighted the kinds of economic opportunity that renewable infrastructure represented for cities. During a talk on the growing EV presence in the San Francisco Bay Area, ProTerra Chief Commercial Officer Matt Horton explained why his company’s electric buses are critical, not just for climate but for communities.
“We are on the ‘electrify everything side’,” Horton said. “Why buses? These are the workhorses of our nation’s transportation networks. They are also the vehicle class that makes sense to electrify first. They go to the same place every day so you know your routes, you are competing against the least efficient vehicles on the road, few technologies that is more cost effective.”
ProTerra had already sold 700 buses to U.S. cities and that the transition to electrifying public transportation could happen fairly quickly, Horton said. Currently, it is still more expensive to manufacture electric vehicles than their fossil fuel counterparts, but over the course of their life-span—EV buses are expected to last several years longer in addition to being cleaner and that all adds up to saving money.
In addition to the vehicles, there are plans and opportunities for businesses that connect them to a renewable energy grid. One such company is Paired Power., who promoted their work at the expo inside the Yerba Buena Arts Center across from the convention. The company builds solar-powered charging stations for EVs that can be installed in places, such as office parking lots, where drivers can power their work commute.
“From a big picture perspective, if we electrify all the cars, we will more than have to double the entire grid,” explained Mark Bauhaus, chief commercialization officer for Paired Power. “That’s not going to happen. We will electrify cars using clean energy … so we need to have local sources of power that will go directly into cars that will not overtax the grid,” he said. “We need to build infrastructure and the more of that we have the more comfortable people are moving from gas cars to electric cars. If you go back to 1910, there was probably one gas station every 200 miles, it was really dangerous and scary to take your model-t and drive it around; same thing here.”
Bauhaus said that events such as the GCAS are integral to the expansion of companies like Paired Power, providing visibility and motivation for people looking for answers on how to tackle the climate challenge. Building renewable charging stations, particularly in urban areas, could be adopted on a time scale of just a few decades, well within the time frame demanded by the Paris Agreement. Bauhaus maintained the economics for a start-up like Paired Power were already attractive without incentives, but additional tax credits or private investment could help them grow even more quickly.
It is easy to see how the renewable sector that has emerged over the past 15-20 years will grow along with society’s commitment to a carbon draw down; more controversial, and difficult, is the transition existing companies will make to transition away from fossil fuels. This is particularly true of the food and beverage industry, which were well represented at the summit. Unilever and Wal-Mart announced that they were joining the Sabah Restoration Project, which would help halt native vegetation loss in a region of Malaysia driven by demand for palm oil.
Another group led by Coca-Cola and Mars Incorporated launched the Climate-Resilient Value Chains Leadership Platform. The goal of this cooperative is to monitor and analyze how these businesses can address climate change through sustainable sourcing and transportation. “Supply chains, the engines of global growth, are broken,” said Barry Parkin the Chief Sustainability and Procurement Officer of Mars Incorporated. “To fix them, we must shift to long-term models for corporate buying that are anchored on building mutuality, reliability, resilience, and risk management into the core of our buying patterns.”
These companies have committed to more energy efficiency in production, but the broader, more uncomfortable issues question whether their growth models are sustainable over the long-term. Science-based models can help these companies lower their per-capita carbon footprint, but managing climate depends on lowering emissions in the aggregate. The most recent IPCC report, released this week, calls for a carbon neutral planet by 2047, and the U.N. Environment Program released data last year suggesting ‘green’ economic growth may be impossible.
A panel on better farming practices highlighted this problem: the conflict between supply-side companies transitioning to more efficient or fossil-free manufacturing and demand-side needs to grow markets.
The companies had an answer.
Parkin and Christine Daugherty, a VP for Global Sustainable Agriculture and Responsible Sourcing at PepsiCo, explained their companies’ new commitments as part of the Climate-Resilient Value Chains Leaders Platform.
“The consumer today wants to have that emotional connection to their food,” Daugherty said, echoing what Strait said about WWF’s work with corporations. They want to have the understanding that the food was sourced responsibly, grown sustainably, we really are working on addressing those consumer changes where the nutritional desires are changing, addressing the issue of environmental stewardship.”
Parkin acknowledged that the Mars company was aware of the gap between stated goals and progress (“an area the size of Scotland gets deforested every year,” he said). Mars was moving away from palm oil and analyzing how to make vanilla production more sustainable in Madagascar, including paying more and educating farmers.
Jeremy Oppenheim, a founder and managing partner with the environmental consulting group SYSTEMIQ, was encouraged by the corporate announcements but wanted to see more. “We will have to push for more regulation and tough policy and the companies will have to come out arguing in favor of that,” Oppenheim said. “That is not where most of our food companies and ag companies have historically been. They want to argue that the market will solve these problems, and it won’t and it’s not … this is not going to be solved by magic and a bit of block chain and hope that will give us the dramatic pivot we need.”
Oppenheim went further, encouraging Mars and PepsiCo to use their considerable marketing resources to encouraging better consumer practices. “You guys know how to influence consumers in an astonishing way,” Oppenheim said. “What I would like to see, maybe it’s there: spend half your marketing budgeting, transforming consumer preferences, towards the kinds of goods that are more nutritious and better for the environment. “
Corporations have been working directly with environmental partners for a long time, sometimes to criticism (link). Whether including fossil fuels in one’s portfolio is a sign of pragmatism, fatalism or political opportunism remains to be seen. This debate won’t go away, not only because the climate change crisis won’t go away, but because Bloomberg himself may be eyeing a Presidential run in 2020, according to a New York Times article.
Although companies may be using science-based targets, what do scientists themselves say about using the economy to solve climate change? Glaciologist and author Richard Alley teaches a course at Pennsylvania State University on “Energy, the Environment and Our Future,” which includes analysis of how estimating (and paying) the real cost of burning carbon can provide justification for transitioning away from fossil fuels.
“The usual economic analyses make certain assumptions,” Alley says. “In principle, relaxing any of these assumptions might lead to an efficient path in which either more or less investment now is optimal to slow global warming. But my reading of the literature is that all or almost all of them point to doing more now to slow global warming.”
According to Alley, these assumptions economists build into their models include: GDP is a valid measure of well-being, GDP growth can continue indefinitely, and that money as capital is more valuable to the present generation than to future generations. In other words, “we’re more important,” Alley says.
“If we were to actually reach the economically efficient level of investment, then much more interesting discussions would result, because so many other considerations – species extinction, native/indigenous lifestyles, quality of life for future generations – point to doing more than the path that is calculated to be economically efficient using those economic assumptions.”
While there is more dialogue than ever between businesses, politicians, and scientists, that doesn’t mean the latter are about to jump into the other roles to address climate change. “My impression is that some climate scientists are happy to take political stances—as citizens, they see a responsibility to do so,” Alley says. “I also believe that many of us are reticent on endorsing particular individuals or policies, because of the danger that the science might become more politicized as a consequence.”
Alley notes that he is a registered Republican.
Including everyone is the dialog is critical. Oppenheim closed out his panel remarks with this call to action: “We are sleepwalking our way into an ecological disaster, and real risk of ecological collapse in parts of the world. We are sleepwalking into a health disaster, and we know about it. And we’re waving our arms at these problems. So I think the first thing we need to do is look very, very, hard in the mirror and be clear about the scale of the problem. We are all involved, as consumers, as big companies, we are all part of this.”