Make it Climate-Radical, Business-Friendly, Socially Just, and Fully Transparent
The piece below is co-authored by my friend Peter Ebsen. Peter and I recently put forth this submission to the Science-Based Targets Initiative (SBTi). We admire the SBTi, and we share their goal of “driving ambitious corporate climate action.” To that end, we see room for improvement in their guidelines to corporations on reaching net-zero targets.
The SBTi submission inspired us to co-author a two-part series exploring some of the thoughts and ideas behind our suggestions to SBTi. In short, we suggest shortening timeframes for corporate net-zero commitments, treating carbon removal as equivalent to emission reduction, prohibiting deforestation, and enhancing disclosure/transparency. We understand that some of our proposals may be counter to views of environmentalists whom we respect. Accordingly, we welcome feedback and believe discussion and debate on these important topics will be helpful.
Disclosure: Neither Peter nor Mark are neutral on this topic. Peter has spent his entire career thinking about, and getting directly involved in, carbon markets to achieve climate goals. Most recently, he co-founded SilviCarbon, a carbon dioxide removal aggregator. Mark is the former CEO of The Nature Conservancy (2008–19) and is an advisor to and investor in several companies in the carbon removal business.
The March to Net Zero
There’s been a lot of good news in the world of corporate climate commitments recently. We’ve reached a consensus around net zero as the desired end goal. This clarity has led to even more commitments. Almost everyone, it seems, is getting in formation as the private sector drives inevitably towards our shared vision. It’s a clear-cut victory that proves optimists like us right. Right?
We initially thought so. But after taking a closer look, questions arose for us.
Here are the two concerns about corporate net-zero commitments that we’ve been grappling with:
A. Timeframes for net-zero commitments are often vague or very long.
Time is not on our side.
Most environmentalists agree with the Intergovernmental Panel on Climate Change (IPCC). The world needs to reach net-zero by 2050 and get at least halfway there by 2030. But—we shouldn’t deceive ourselves—progress on reaching global net emission reduction goals has been poor. We’re on track for just a 0.5% net reduction from 2010 levels by 2030. That’s compared to the 45% net reduction needed by 2030 to reach net-zero by 2050. Clearly, we need to accelerate our effort by many orders of magnitude.
Given this bleak trajectory, we don’t believe we should encourage or reward vague long-term pledges, however well-intentioned they may be. We should insist on clearer near-term commitments.
- If you are a large corporation with the means and the desire to be viewed as a climate leader, you should reach net-zero much sooner. As early as next year.
- If you don’t have the financial capacity to do so, commit to doing as much as you can now and give an explanation as to why you can’t do more immediately.
- And for all companies, if you want credit for setting the goal, you need to show your plan. Improve your disclosures so we can better understand your roadmap. What are your current net emissions, how will you reduce them, what are the costs of the net emission reductions you make, and what would be the costs of those you choose not to make?
B. There is some undue ambiguity about what net-zero actually means.
There are two points of some contention worth zeroing in on.
- Net-zero means net zero.
Net zero’s meaning should be clear. Any entity that wants to be net-zero—whether it is a country, a company, or something else—must have its anthropogenic greenhouse gas emissions balanced by its anthropogenic carbon dioxide removals. The inflows and outflows of greenhouse gases into and out of the atmosphere within a given time period (e.g. a calendar year) must be in balance. That’s the IPCC definition. Each company is responsible for ensuring that its greenhouse gas emissions are balanced with carbon dioxide removals.
- In a net-zero framework, carbon removal is equivalent to emission reduction.
Given this definition, the climate emergency, and the lack of progress we’ve made thus far, we don’t agree with the SBTi that emissions reductions are always better and that carbon removals should only be used as a last resort.
This should be good news for companies who are ambitious about reaching net-zero ASAP. Removal presents a major opportunity to achieve progress quickly and cost-efficiently (costs per ton of net emission reduction).
Many environmentalists don’t agree.