In early July, Amazon announced that it had purchased enough clean electricity to cover the power demands of all offices, data centers, grocery stores and warehouses across its global operations, seven years ahead of its sustainability goal.
This news came on the heels of Google’s acknowledgment that the growing energy demands of its AI operations helped increase its corporate emissions by 13% last year — and that it had backed away from claims that it was already carbon neutral.
If you were to take the ads at face value, you’d be forgiven for believing that Google is stumbling while Amazon is accelerating in the race to clean up climate pollution.
However, while both companies are falling short of their goals, Google’s approach to reducing greenhouse gas emissions is now arguably more defensible.
In fact, there is a growing consensus that how a company gets to net zero is more important than how quickly it does so. Additionally, a new school of thought is emerging that goes beyond the net-zero model of corporate climate action, arguing that companies should focus on achieving broader climate impacts rather than trying to balance every ton of carbon dioxide they emit.
But to understand why, let’s first examine how the two tech giants’ approaches compare and where organizations’ climate strategies often go wrong.
Perverse incentives
The main problem is that the costs and complexity of net-zero emissions plans, which require companies to cut or cancel every ton of climate pollution in their supply chains, can create perverse incentives. Corporate sustainability directors often end up looking for the quickest and cheapest ways to clean up a company’s pollution on paper, rather than looking for the most reliable ways to reduce its emissions in the real world.
This may mean purchasing cheap carbon credits to offset ongoing pollution from your direct operations or those of your suppliers, rather than undertaking the more difficult task of reducing these emissions at the source. These programs may involve paying other parties to plant trees, restore coastal ecosystems, or change agricultural practices in ways that reduce emissions or remove carbon dioxide from the air. The problem is that numerous studies and investigative reports have shown that these efforts often overestimate climate benefits, sometimes exaggeratedly. Net zero targets could also force companies to purchase what are known as renewable energy credits (RECs), which ostensibly support additional renewable electricity generation but raise similar concerns that climate gains are exaggerated. The argument in favor of RECs is that organizations generally cannot purchase a pure stream of clean electricity to power their operations, since grid operators rely on a combination of natural gas, coal, solar, wind and other sources. However, if they provide money or a demand indication that encourages developers to build new renewable energy projects and generate more clean electricity than they would otherwise have, they can claim that this cancels out the ongoing pollution of the electricity they use. Experts, however, are increasingly unconvinced of the value of RECs at this stage. The claim that clean energy projects wouldn’t have been built without this additional support is increasingly less convincing, in a world where such facilities can easily compete in the market on their own, Emily Grubert, an associate professor at Notre Dame. And if the purchase of such credits does not bring about changes that reduce emissions into the atmosphere, it will not be able to balance the company’s ongoing pollution.
Creative accounting
In turn, Amazon is counting on both carbon credits and RECs.
In its sustainability report, it states that it has met its clean electricity goals and reduced emissions by improving energy efficiency, purchasing more carbon-free energy, building renewable energy projects at its facilities, and supporting these projects around the world. It did this, in part, by “purchasing additional environmental attributes (such as renewable energy credits) to signal our support for renewable energy in the networks we operate in, in line with the expected generation of the projects we contract.”
However, there is yet another problem that can arise when an organization pays for clean energy that it is not directly consuming, whether through RECs or power purchase agreements made prior to construction of a project. Simply paying for renewable electricity generation that occurred at some point, somewhere in the world, is not the same as purchasing the amount of electricity that the company consumed in the specific places and times in which it did so. As you may have heard, the sun stops shining and the wind stops blowing, even as Amazon workers and operations continue to work around the world 24 hours a day.
Paying a solar farm operator some additional money for producing electricity he would already generate in the middle of the day does not significantly reverse the emissions that an Amazon distribution center or server farm produces by, say, drawing electricity from a natural gas plant two states away in the middle of the night.
“The reality is that your data centers are increasing demand for fossil fuels,” argued a report from Amazon Employees for Climate Justice, a worker group that has been pushing to take more aggressive action on climate change.
The organization stated that a significant portion of Amazon’s RECs are not driving the development of new projects. He also emphasized that these payments and projects are often not generating electricity in the same areas and at the same times that Amazon is consuming energy.
The employee group calculates that 78% of Amazon’s energy in the US comes from non-renewable sources and accuses the company of using “creative accounting” to claim it has met its clean electricity goals.
To its credit, Amazon is investing billions of dollars in renewable energy, electrifying its fleet of delivery vehicles, and otherwise making real progress in reducing its waste and emissions. Additionally, it is lobbying U.S. lawmakers to make it easier to permit electrical transmission projects, funding more reliable forms of carbon removal and working to diversify its mix of electricity sources. The company also insists that it is being careful and selective about the types of carbon offsets it supports, investing only in “additional, quantifiable, real, permanent and socially beneficial” projects.
“Amazon is focused on making the network cleaner and more reliable for everyone,” the company said in response to a query from MIT Technology Review. “An emissions-first approach is the fastest, most cost-effective and scalable way to leverage corporate procurement of clean energy to help decarbonize global energy grids. This includes purchasing renewable energy in places and countries that still rely heavily on fossil fuels to power their grids, and where energy projects can have the greatest impact on carbon reduction.”
The company has adopted what is known as a “carbon matching” approach (which is explained in more detail here), emphasizing that it wants to be sure that the emissions it reduces through its renewable energy investments are equal to or greater than the emissions it she continues to produce.
But a recent study led by Princeton researchers found that carbon matching had a “minimal impact” on long-term power system emissions because it rarely helps build projects or generate clean energy where those things wouldn’t otherwise have happened. anyway.
“It’s a compensation scheme at its core,” Wilson Ricks, study author and energy systems researcher at Princeton, said of the method, without commenting specifically on Amazon.
(Meta, Salesforce, and General Motors have also adopted this model, the study notes.) The problem with claiming that an organization is effectively operating entirely on clean electricity, when it is not doing so directly and may not be doing so completely, is that it takes away any pressure to actually complete the work.
Withdrawal of carbon neutrality claims
Google has also made its own questionable climate claims over the years and faces increasing challenges as the energy it uses for Artificial Intelligence increases.
However, Big Tech is striving to address its energy consumption in arguably more defensible ways, and now appears to be taking some notable course-correction steps, according to its recent sustainability report.
Google says it is no longer buying carbon credits that supposedly prevent emissions. With this move, it also backed away from its claim that it had already achieved carbon neutrality in its operations years ago.
“We are no longer purchasing carbon credits year over year to offset our annual operational emissions,” he told MIT Technology Review in a statement. “Instead, we are focusing on accelerating a range of carbon solutions and partnerships that will help us work towards our net-zero emissions target, while helping to develop broader solutions to mitigate climate change .”
This primarily includes funding the development of more expensive but possibly more reliable ways to remove greenhouse gases from the atmosphere through direct air capture machines or other methods. Google has pledged $200 million to Frontier, an effort to prepay for a billion tons of carbon dioxide that the startups will eventually extract and store.
These commitments may not allow the company to make any claims about its own emissions today, and some of the early-stage approaches it funds may not work at all. However, the hope is that these types of investments can help establish a carbon removal sector, which studies show could be essential to keeping warming under control in the coming decades.
Clean energy 24 hours a day
Additionally, for several years, Google has been working to purchase or support the generation of clean energy in the areas where it operates and at all times that it consumes electricity – an increasingly popular approach known as 24/7 carbon-free energy. day, 7 days a week.
The idea is that this will encourage further development of what grid operators increasingly need: forms of carbon-free energy that can operate at all hours of the day (commonly called “steady generation”), according to demands real energy of companies hour by hour. This can include geothermal plants, nuclear reactors, hydroelectric plants and more.
More than 150 organizations and governments have signed the 24/7 Carbon-Free Energy Compact, a commitment to ensure that clean electricity purchases match your hourly consumption. Among them are Google, Microsoft, SAP and Rivian.
The Princeton study notes that time matching is more expensive than other approaches, but concludes that it generates “significant reductions in system-level CO2 emissions” while “encouraging advanced clean energy generation and technologies.” of long-term storage, which would otherwise not be accepted by the market”.
In the case of Google, the quest for 24/7 matching led the company to support more renewable energy projects in the areas in which it operates and to invest in more energy storage projects. It has also entered into purchase agreements with power plants that can provide carbon-free electricity 24 hours a day. This includes several agreements with Fervo Energy, an enhanced geothermal energy startup.
The company says its goal is to achieve net-zero emissions across all of its supply chains by 2030, with all of its electricity use synchronized, hour-by-hour, with clean sources across all networks on which it operates.
Power-intensive AI
Which brings us back to the growing problem of AI power consumption.
Jonathan Koomey, an independent researcher who studies the energy demands of computing, argues that the hype about increased electricity use for AI is exaggerated. He notes that AI accounts for only a small portion of the overall energy consumption of information technology, which produces about 1.4% of global emissions.
However, leading data center companies such as Google, Amazon and others will need to make significant changes to ensure they stay ahead of the rise in AI-driven energy use while staying on top of their climate goals.
They will have to improve overall energy efficiency, purchase more clean energy and use their influence as large employers to pressure utilities to increase carbon-free generation in the areas where they operate, he says. But the clear focus must be on directly reducing corporate climate pollution, not manipulating RECs and offsets. “Reduce your emissions; That’s it,” says Koomey. “We need real, true and meaningful emissions reductions, not credit trading that has, at best, an ambiguous effect.”
Google says it is already making progress on its AI footprint, while also emphasizing that it is leveraging Artificial Intelligence to find ways to reduce climate pollution across industries. This includes efforts like Tapestry, a project within Company retain heat.
“AI holds immense promise for driving climate action,” the company said in its report.
The contribution model
Google and Amazon’s contrasting approaches are reminiscent of an instructive hypothesis that a team of carbon market researchers outlined in a paper in January of this year. They noted that one company could do the hard and expensive work of directly eliminating nearly every ton of its emissions, while another could simply buy cheap offsets to supposedly address them. In this case, the first would have done greater good for the climate, but only the second could say it reached its net zero target.
Because of these challenges and the perverse incentives that drive companies to seek cheap compensation, authors have begun to advocate a different approach, known as the “contribution model.”
Like Koomey and others, they emphasize that organizations should devote the majority of their money and energy to directly reducing their emissions as much as possible. However, they say they must adopt a new way of dealing with what is left (either because the remaining pollution is occurring outside of their direct operations or because there are no affordable, transmission-free alternatives yet).
Instead of trying to cancel every ton of ongoing emissions, a company could choose a percentage of its revenue or set a defensible carbon price on those tons, and then dedicate all of that money to getting the most climate benefit that money can get. can buy, says Libby Blanchard, a researcher at the University of Cambridge. (She co-authored the contribution model paper with Barbara Haya of the University of California, Berkeley, and Bill Anderegg of the University of Utah.)
This could mean funding well-managed forestry projects that help retain carbon dioxide, protect biodiversity and improve air and water quality. It could mean supporting research and development of the technologies still needed to slow global warming and efforts to scale them up, as Google appears to be doing. Or it could even mean lobbying for stricter climate laws, as few things can drive change as quickly as public policy.
However, the main difference is that it will not be able to claim that these actions canceled every ton of remaining emissions – only that it took real and responsible steps to “contribute” to solving the problem of climate change.
The hope is that this approach will free companies to focus on the quality of the projects they finance, rather than the quantity of cheap offsets they buy, Blanchard says. This could “replace this race to the bottom with a race to the top,” she says.
As with any approach presented to for-profit organizations that employ experienced accountants and lawyers, there will certainly be ways to abuse this method in the absence of adequate safeguards and oversight.
And many companies may refuse to adopt it, as they will not be able to claim they have achieved net-zero emissions, which has become the de facto standard for corporate climate action.
But Blanchard says there is an obvious incentive for them to move away from that goal.
“There is much less risk of being sued or accused of greenwashing,” she says.
( fonte: MIT Technology Review )
