We must fundamentally rethink “net-zero” climate plans. Here are six ways how.
Fund research and development
There are all sorts of areas where the world has yet to figure out how to effectively, affordably, and rapidly slash emissions, including aviation, maritime shipping, fertilizer, cattle farming, steel, and cement.
So companies looking to accelerate their path to zero emissions and maximize their impact on climate change should also fund the early-stage research, development, and scale-up efforts needed, whether through their own R&D departments, external research grants, or investments in startups .
Some companies are doing this in various ways. In 2020, for example, Amazon set up the $2 billion Climate Pledge Fund to develop technologies and services that can help it and other companies achieve climate goals. It’s invested in companies like Infinium, which is developing renewable electrofuels to clean up aviation; Beta Technologies, a maker of electric vertical take-off and landing aircraft; and CMC Machinery, which produces boxes customized for specific products, reducing waste and the need for plastic air pillows.
Each of these investments could potentially help Amazon reduce its materials and emissions as it moves massive amounts of products around the world.
Microsoft operates a similar venture effort through its $1 billion Climate Innovation Fund.
Move beyond renewable-energy credits
One of the biggest emissions sources for most companies is electricity. But businesses generally don’t clean up their power consumption by directly sourcing carbon-free electricity, since most have limited sway over the mix of sources on their local grid.
As a workaround, many simply purchase renewable-energy credits that provide additional revenue to wind, solar, geothermal, or other clean energy projects. The basic idea is that the added support helps projects get built, so carbon-free electricity is generated that wouldn’t ‘t have been otherwise. Thus, the credits can be counted against the share of a company’s overall power consumption that isn’t clean.
But while these credits may be beneficial in various ways, notably signaling to utilities that there’s growing demand for clean electricity, it’s becoming harder to claim that they’re effectively cleaning up the power consumption of a company that isn’t actually drawing electricity from the plants in question. Such projects often aren’t even operating on the same grids, or capable of producing electricity across all the hours the companies are consuming it.