COVID-19 response "no model" for climate action, Microsoft climate tech guru Brandon Middaugh & EU carbon markets crash
The newsletter for independent thinkers on carbon and climate.
(source: Breakthrough Institute)
INSIGHTS
Why the COVID-19 response is “no model“ for climate action
A global emergency. Wartime mobilization. Calls to “listen to the scientists.” Demands for radical shifts in policy and human behavior. Tradeoffs between sacrifices today and larger suffering in the future. Politicization by all sides.
The parallels between the ongoing COVID-19 crisis and climate change are obvious. But contrary to the received wisdom among many climate analysts and advocates, those parallels mostly reveal just how different the two challenges are.
The COVID-19 pandemic is unfolding rapidly, demanding all of our attention. Climate change unfolds slowly, over decades, often so imperceptibly that we term the conditions of a changing climate as the “new normal.” COVID-19 presents as a frightening but conceptually simple problem: a novel virus that can be contained by quarantine, social distancing and, hopefully, immunization. Climate change presents as a “wicked” problem, which means its causes, impacts, key actors, and optimal levers for change are heavily contested. Responding to COVID-19 through behavioral shifts means putting our lives temporarily on hold for months to a year. Responding to climate change through behavioral shifts means a lifelong if not multi-generational commitment to population-wide lifestyle changes.
The Breakthrough Institute authors Alex Trembath and Seaver Wang present the most compelling arguments against the COVID-19 crisis serving as a blueprint for climate action. While the temptation to draw parallels to COVID-19 is understandable, we must resist the urge to over simplify the very real and complex climate crisis. LINK
Issue No. 20
Welcome to the latest issue of Carbon Creed - a curated newsletter for people “woke” on carbon and climate. Last week our top articles were Meet Greentown Labs CEO Emily Reichert & Why the coronavirus outbreak is “bad news” for climate change.
My name is Walter McLeod, and I’m glad you’ve joined our tribe. We hope to hear from you as we navigate this weekly journey through the good, bad and ugly of carbon and climate. You can ping me anytime at mcleodwl@carboncreed.com.
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Now, LET’S GO DEEP!
CLIMATE TECH
Meet Brandon Middaugh, director of Microsoft’s $1 billion climate fund
(photo: CNBC)
Just a few months ago, Microsoft made waves in the corporate community by coming out with one of the most ambitious and wide-ranging strategies to reduce carbon emissions from the company’s operations.
Part of that plan was a $1 billion fund that would invest in climate change mitigation technologies — specifically focused on decarbonization.
According to Jonathan Shieber of TechCrunch , it appears that Brandon Middaugh will be leading the new investment fund.
Middaugh has been at Microsoft for more than four years and worked as one of the architects of the company’s climate strategy. In her previous role as part of the company’s Cloud Energy and Sustainability team, Middaugh led the distributed energy strategy and was a part of the partnership Microsoft initiated with the East Coast regional transmission organization, the PJM — which manages the power grid for a large swath of the Northeastern and Mid-Atlantic region of the U.S.
At the launch event, Microsoft committed to going “carbon negative” by 2030 and said that it would remove by 2050 the equivalent of all the carbon it had emitted into the atmosphere since its founding in 1975.
The $1 billion fund is part of that effort to reduce emissions from suppliers and customers by financing projects and technologies that can reduce emissions with new generation or efficiency technologies, or capture and remove carbon from the atmosphere.
Equity and debt investments have to meet four criteria, including: 1) the ability to drive meaningful decarbonization, climate resilience or other sustainability-related goals; 2) have additional market impacts for future climate solutions; 3) can address Microsoft’s own climate debt; and 4) have implications for the unequal distribution of climate impacts. Go deeper here. LINK
Governments
EU carbon markets ‘crash’ as electricity demand collapses under COVID closures
In Italy, the fall in electricity demand reached 20% over the last two weeks. The impact of confinement measures there was visible early on, with a decrease in electricity demand already observed in the week of 2-8 March, according to research by Ember, a climate think tank.
And a further fall in demand is expected to happen after the Italian government announced new lockdown measures on Sunday (22 March), ordering factory closures and halting all production considered “non-essential”.
This means “even more industry and services will shut down and the impact on electricity demand could even exceed 20%,” said Ember.
There is a silver lining to this. Last week, German think-tank Agora Energiewende reported a dive in CO2 emissions related to falling electricity demand.
German industry alone is on track to emit 10 to 25 million tons less CO2 than business as usual, according to the think-tank’s projections, meaning Germany could end up reaching and even exceeding its climate target for 2020.
Carbon market “the first victim”
But the falling price of electricity is also threatening the EU carbon market, which risks becoming “the first victim” of the demand slump because of an oversupply of CO2 allowances, according to Máximo Miccinilli from the Centre on Regulation in Europe, a Brussels-based think tank.
“The EU Emissions Trading System (ETS) is certainly the most exposed climate policy instrument to the COVID-19 shock,” Miccinilli wrote in a briefing note.
“The uncertainty and instability of the system may undermine the plans to phase-out coal. It may also reduce public income from auctioning revenues and may slow down low-carbon investments,” Miccinilli said.
CO2 prices have sunk to €15.45 a tonne on Monday (23 March), down from around €23 at the beginning of March, according to data by Ember. And demand is not expected to pick up any time soon, Miccinilli said, predicting that “the CO2 price will hardly recover in 2020” because of the prolonged economic uncertainty caused by the COVID-19 pandemic.
Europe is thus at a crossroads - applaud short term carbon emissions reductions due to a global recession or fret over the collapse in long term CO2 pricing. LINK
Corporate Citizen
BP Agrees to Draft Climate Change Shareholder Resolution
(photo: DANIEL LEAL-OLIVAS/AGENCE FRANCE-PRESSE/GETTY IMAGES/WSJ)
Amazon shareholders wouldn’t do it.
Apple shareholders wouldn’t do it.
This week British Petroleum (BP) PLC said it has agreed to draft a shareholder resolution to be voted on next year that would enshrine its pledge to reach carbon neutrality by 2050, as investors push major oil companies to diversify their portfolios to cleaner energy.
The British energy company said the resolution would address BP’s overall greenhouse-gas emissions from its operations to the products it buys and sells and lay out how it would boost investment in clean energy.
“BP has to change, and faster than ever, because the world is changing fast, and so are society’s expectations of us,”
- BP CEO Bernard Looney
In February, BP became one of the first major oil-and-gas companies to pledge to reach net-zero emissions by 2050 in line with the Paris Agreement, but was scant on details. It said Friday it would provide more information at its coming capital markets day in September and that work on a possible resolution would follow. “Over time, as investment goes up in low- and no-carbon, we see it going down in oil and gas,” the company said.
BP said it would work on the shareholder proposal with Follow This, a group of investors in oil-and-gas companies that push major oil companies to fall in line with the Paris Agreement. In response, Follow This said it has withdrawn its climate change resolution that would have been voted on this year by BP’s shareholders.
In 2019, BP’s board eventually supported a different shareholder proposal, backed by the investor group Climate Action 100+, for the company to provide more disclosures around its greenhouse gas emissions and carbon-intensive investments.
Its latest move comes as energy companies are facing pressure from investors to dial down their exposure to fossil fuels as governments ready regulations to punish big polluters. The smart energy companies see what’s coming and will make the hard decision to transition to a low carbon business model. LINK
RESOURCES
The Keeling Curve a daily record of global atmospheric CO2 concentration.
Congressional Policy Tracker a summary of current federal energy legislation.
Click Clean your favorite apps and tech company clean power rankings.
Advancing Inclusion Through Clean Energy Jobs a report by the Brookings Institute.
Guide to Understanding the 5 Different Types of Electric Vehicles – read this before you buy or lease your next electric car.
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Curated by Walter McLeod, Founder and Editor-in-Chief of Carbon Creed and Managing Partner with Eco Capitol Energy.