As Washington talks climate rules and legislation, carbon emitters are burnishing their climate credentials.
TC Energy, the company behind the Keystone XL pipeline, pledged days before President Joe Biden’s inauguration to buy carbon emissions offsets for the project, which the administration halted.
General Motors announced in January it plans by 2035 for the bulk of cars it sells to be electric. Volkswagen said it expects it will double sales of electric vehicles, or EVs, in 2021. Volvo intends to only sell electric cars by 2030. “There is no long-term future for cars with an internal combustion engine,” said Henrik Green, Volvo’s chief technology officer.
And the American Petroleum Institute, a lobbying arm for the petroleum business, made a big splash last week, publicly backing an “economy-wide” carbon tax.
That move drew guffaws from environmentalists who said API wants regulatory cuts in exchange, condemnation from Republicans who said it would raise consumer costs and tepid acceptance from moderates in and out of Congress.
Yet it was the latest in a steady drumbeat of announcements from fossil fuel companies and industry allies that underscores the possibility that Democrats will craft sweeping climate legislation and that carbon-heavy sectors will have to adapt in response.
Like former President Barack Obama, Biden made climate an early focus in his administration, assumed office with the country in a financial crisis and plans to reinvigorate the economy in part by investing in renewable energy and low-carbon jobs.
But unlike Obama, Biden may find mildly friendly allies for his climate agenda in corporate America and diminished corporate forces fighting against his environmental proposals.
“There’s something new happening here,” said Andrew Logan of Ceres, a sustainable investment advocacy group. “The pressure for change is now coming from the inside, as well as from the outside.”
API and other oil and gas industry groups have been under pressure from the public, activists and shareholders to align their actions and public statements with climate science since at least the 1990s, with member companies distancing themselves over the trade group’s climate positions.
That pattern fractured last year when BP left three trade groups over their climate policies, and it continued in January when French supermajor Total parted API over climate “divergences.”
BP, Shell and Total have also cut ties with refining lobby American Fuel and Petrochemical Manufacturers.
“We’ve seen a select few companies, but some big ones and important ones, actually leave trade groups over their positioning on climate, which is kind of amazing, when you step back and think,” Logan said. “Where I’m withholding judgement is how far does that actually move things.”
Verena Radulovic, director of corporate engagement at the Center for Climate and Energy Solutions, said companies are under pressure from investors, competitors and the public to consider climate.
“A lot of companies across a lot of sectors are primed for these conversations,” Radulovic said by phone. “Multiple audiences care about this. It’s not just government.”
Since the Paris climate agreement of 2015, companies are meeting goals to cut emissions, according to Science Based Targets, an international coalition that shows companies how rapidly they must slash emissions and provides technical assistance to help them do so.
More than 330 companies cut their emissions 25 percent since 2015, the group said in a study released in January.
General Motors and rival Ford set goals under the SBT framework, as have Volkswagen and Volvo.
Kathy Mulvey, accountability campaign director with the Union of Concerned Scientists, said investors have gotten more sophisticated about companies’ climate records and positions in recent years, adding that she noticed an uptick after Paris in the frequency with which companies claim they are meeting international climate targets.
Duran Fiack, a Lehman College political science professor, said: “While we had President Trump for four years, and clearly not a strong climate change agenda and regulatory agenda, other things have been happening. The price of renewable energy has dropped. Countries have been moving forward with their emissions-reduction objectives.”
Big U.S. companies compete in a global market and often lag European competitors on climate, Mulvey said. While the Trump administration muscled into existence broad environmental deregulation, other countries ratcheted up their climate efforts.
“The bar is being raised really,” she said. “The rest of the world has not stood still for the last four years.”
Climate science has not stood still either.
Emissions declined in 2020 but rebounded to pre-pandemic levels, and last year was the fifth-warmest on record, the National Oceanic and Atmospheric Administration said. Wildfires charred the West, filled lungs with smoke and turned metropolises like San Francisco into eerie cityscapes under orange skies, and the country had a record number of natural disasters that cost a billion dollars or more.
There were 22 so-called “billion-dollar” disasters in 2020, a figure that included fires, drought, heat waves, tornadoes, cyclones and severe weather like derechos and hail, NOAA said. It was an “unprecedented” number of disasters and cost about $95 billion, NOAA said.
“The evidence of harm is in front of people in all walks of life,” Mulvey said.
In 2009, 44 percent of adults in America said climate change was a “major threat” to the nation’s welfare, according to the Pew Research Center. By 2020, that figure hit 60 percent, though Democrats are more worried than Republicans.
While carbon price legislation advanced out of the House in 2009 with 211 Democrats and eight Republicans voting yes, carbon taxes remain anathema to today’s GOP.
Rep. Garret Graves, R-La., ranking member of the House Select Committee on the Climate Crisis, called API’s support of a carbon price a “cop-out approach to appease the radical left,” while Sen. John Barrasso, R-Wyo., said Thursday, “Proposals that impose a cost on carbon will hurt American families.”
The Biden administration is preparing a multitrillion-dollar public works package expected to be unveiled Wednesday that includes significant low-carbon energy elements.
Sam Ori, executive director of the Energy Policy Institute at the University of Chicago, said Obama and Biden zeroed in on climate early in their presidencies, though the Biden team has more tools at its disposal and has taken a more aggressive spending tack.
“I think that’s a big difference with the Biden administration,” Ori said by phone of the difference in economic recovery approaches. “They’re going to spend more, and they’re working to weave clean energy into the foundation of a lot of this and thinking through how to recover in a way that’s beneficial for the climate.”
There is a greater sense now than in 2009 that climate perils are present, Ori said.
“Across party lines there is an increase in the belief that this is a real issue,” he said. But it’s also true, he said, that technology supporting a green economy is more available and less expensive.
No matter the changes from the Obama years, count Ori skeptical that companies will meet their pledges without consumer demand.
“I really am super skeptical of any of that,” he said of corporate pledges generally. “I think all that is really just positioning.
“If you look at the auto companies and this stuff about 2030, all-electric fleets and everything, electric models from GM, they’re only going to do that if people buy the cars,” he said.
Mulvey is in the same camp, eyeballing API’s carbon price backing with a jaundiced view.
“If it’s trying to earn trust, I think its first step is to get out of the way on climate action,” she said. “What strings might be attached, what kinds of poison-pill tradeoffs I think are very important questions.”