Twenty-eight Democratic senators recently pulled an all-nighter in Congress to bring awareness to climate change issues. The effort, led by Rhode Island Sen. Sheldon Whitehouse, had hoped to "wake up" Congress and get it serious about addressing the issue. While we applaud the actions of these senators trying to bring the important issue of climate change back into the spotlight, will this all-nighter really get past government gridlock and provide some forward movement in the climate change debate?
Since 2010, when President Obama's effort to cap greenhouse gas emissions failed, Congress has yet to take a concrete action on climate change legislation, and the all-nighter hardly counts. In fact, as the Washington Post wrote, "If [Senate Majority Leader Harry Reid] and his colleagues really want action, they don't have to lose sleep. All they have to do is bring a climate change bill to the floor."
But they didn't. Thankfully, some businesses have begun taking things into their own hands. This helps prove the point that moving away from a reliance on fossil fuels makes economic sense. We hope other companies will mimic these moves, and as momentum gathers it may help move us toward policies and legislation that would speed progress further. And no one else would have to spend an entire night in the Senate.
Looking toward the future and putting a price on carbon
Many companies aren't waiting for Congress to pass legislation in order to make changes to their business plans. In December, CDP — formerly known as the Carbon Disclosure Project — reported that more than two dozen of the nation's biggest corporations have put a price on carbon. Companies such as Walmart, The Walt Disney Company, General Electric, ConAgra Foods, Microsoft, DuPont, Google, Delta Air Lines, Shell and Exxon Mobil have incorporated an internal form of a carbon price into their long-term financial planning. Exxon's is in fact one of the highest RMI has seen, if used with rigor. These firms, which generally have a long-term perspective, are baking into their decision-making what Congress has been unwilling to address. We hope others will follow.
Shaping energy markets
Meanwhile, some of the world's largest companies are taking a more proactive approach and investing in renewable energy. A 2013 World Wildlife Fund report found that 102 of the combined Fortune 100 and Global 100 companies have set greenhouse gas reduction goals. And some of those companies are switching from purchasing renewable energy credits to actually investing in on-site projects, as renewable economics become highly competitive. RMI is aiding in this effort through our initiative to help companies overcome some of the learning, strategy selection and transactional challenges they face in trying to source renewable energy today.
Google long has been a proponent of renewable energy, and now can claim to be a carbon-neutral company. While its claim of carbon neutrality is still partially due to the purchase of carbon credits, it also is emitting less carbon per million dollars of revenue each year, due to sourcing more of its electricity from renewables. A senior manager at Google's global infrastructure team has said the company "only makes a deal on a project that makes financial sense to us." And it obviously thinks investing in renewables makes financial sense, as it has made 15 wind and solar investments totaling more than $1 billion. "The fact is that all of these things, procuring power for ourselves, investing in power plants, renewable power plants, they all make business sense, they make sense for us as a company to do," Rick Needham, Google's director of energy and sustainability, told CNBC.
Apple has a goal to power every one of its facilities entirely with renewable energy. It already has achieved 100 percent renewable energy at all of its data centers and its campus in Cupertino. Walmart has 150 solar photovoltaic systems partially powering its stores, clubs and distribution centers, and 350 of its Texas stores receive up to 15 percent of their electricity needs from wind.
The procurement of renewable energy by these large players makes a difference in more than the energy consumption or carbon footprint of the company. According to RMI principal Dan Seif, "Companies have the power to make large investment and procurement decisions that can move and shape energy markets. All the renewables players want to do business with them. And with effort, they can find ways to get past barriers that others cannot tackle."
Take eBay, for example. The company wanted to expand its presence in Utah, but was faced with a law disallowing non-utility energy consumers to buy and transmit power directly from renewable energy developers. Instead of taking the easy way out and powering its new facility with coal, which powers 94 percent of Utah, it worked with state legislators to pass Senate Bill 12, allowing energy customers to buy power directly from developers, making renewable energy available to Utah electricity consumers without raising rates or taxes for Utah residents. eBay recently announced construction of a five-megawatt waste-heat recovery project with geothermal company Ormat that will allow it to use more clean power in Utah.
Addressing climate change through efficiency
Renewables aren't the only way to combat climate change. Other businesses are investing in energy efficiency, both as a way to lower their carbon footprint and as a sound financial decision. The well-known 2009 retrofit of the Empire State Building is now saving over 40 percent of the building's energy use and $4.4 million annually. Even more important, similar retrofits are being evaluated and planned in over 100 large buildings across the country. Inside sources say the Empire State Building energy retrofit was a key factor in launching New York City's groundbreaking Local Law 84: Commercial Building Energy Benchmarking. And New York's benchmarking efforts have spurred eight more municipal and state building energy disclosure policies in major U.S. cities, with more emerging.
The International Monetary Fund headquarters in Washington, D.C., also is going through a retrofit to cut energy use in half and save over $2 million a year. IMF's famously rigorous risk management team was part of planning the effort and shaping the bid specs, so all involved expect success. According to RMI managing director Hutch Hutchinson, "The IMF retrofit execution team will drive the insights and processes into the Washington real estate world and beyond."
This is not to say that we don't need Congress to take action on climate change. On the contrary, real action in Washington is critical and would hugely accelerate change as the playing field for business decision makers finally would be clearer. But in the meantime, while a handful of Senators stay up all night trying to shine a much-needed spotlight on climate change, businesses — acting through nimble, flexible, agile markets — are making visible and in a few cases large shifts toward efficiency and renewable energy, a tangible start to the process of cascading change and scaling solutions.