I was listening to a recent episode of the Open Circuit podcast and was struck by what Jane Flegal had to say about corporate net-zero commitments:
To me having voluntary corporate net-zero commitments and actions makes sense if your belief about how we solve climate change is that we're going to follow a property rights logic, where every single company on the planet has an emissions liability that requires an offset or a reduction
That, to me, was never a coherent strategy for climate. It may work for other pollution problems where you have obvious, affordable substitutes and local impacts, but the atmosphere doesn't care whose books a ton of carbon sits on. In a voluntary system, you're just rewarding companies for optimizing their own accounting position, not for solving the coordination failures and infrastructure failures that actually determine the pace of decarbonization.
I had a front row seat to this because I left the White House and went to Stripe to help launch Frontier, which was this advanced market commitment for permanent carbon removal ... I was in charge of market development and I was talking to buyers with ambitious net-zero commitments, and they were just sort of like, why would I spend $900 a ton on this carbon removal project today if I could go buy a $4 a ton forestry offset.
It became very clear to me that this isn't just an issue of the offset market being trash, it's about the entire incentive structure and framework of individual corporate footprinting and accounting being totally incompatible with what we actually need to do to accelerate decarbonization.
The problem is the solution that I offer is going to be deeply unsatisfying for people who like to measure widgets because I think you should evaluate companies on one, their investment additionality. Do the actions that they're taking cause more clean energy or clean energy infrastructure to exist than otherwise would? And that is definitively not purchasing an unbundled renewable energy certificate from somewhere. It will be harder to measure. You could just look at expenditures, but it's not as clean as here's my net-zero ledger.
And second is the need for transparency about the stated climate outcomes these companies want to see, and transparency about the instrumental actions they're taking to achieve them. Whether that's financing first of a kind projects, funding transmission. I would like to see, even on the solutions set around distributed energy and demand flexibility and grid enhancing technologies, if these companies are spending a bunch of money to address the actual barriers to scaling those things. Including the policy and regulatory and incentive barriers. If what we're actually doing here is talking about how to accelerate decarbonization, the marginal dollar spent on lobbying for that stuff is much more important than a dollar spent buying an unbundled REC.
Her article for the Searchlight Institute can be found here: Beyond Carbon Accounting.