As the world looks to reset in the wake of the COVID-19 pandemic, we have an opportunity to ensure that the sustainability commitments companies make are tied to tangible actions and lead to the ultimate goal: slashing greenhouse gas emissions from our economy.
Many of America’s corporations, despite (or thanks to) their profit motive and responsibility to shareholders, have placed themselves on the front lines fighting climate change. In our fast-moving world in the middle of a crisis, we’re now beyond the transitional strategies of 5 years ago when it comes to corporate sustainability. Topping that list: we’ve got to stop patting ourselves on the back for buying unbundled Renewable Energy Credits (RECs) and claiming 100% renewable energy. RECs were engineered as a signaling tool for clean power demand years ago, but today (and for a while now) they’ve done nothing to incentivize the construction of new renewable energy projects.
Without more investments in new clean energy infrastructure at scale, we will not decarbonize our electricity grid in time to beat climate change.
That is why we need to ensure that new renewable energy generation is tied to specific carbon emissions reductions. Our electricity system is responsible for almost a third of our country’s carbon footprint. We have the technology to refurbish our grid in large swaths–particularly since only 2% of the country’s electricity comes from solar sources. We now need the urgency to act.
You don’t need to be an energy or carbon expert to understand that we’re still burning dirty fossil fuels to create electricity in certain parts of the country more than others. That means that the environmental and health impacts of turning on the lights or charging our phones are dramatically different depending on where in the country you live.
While California has experienced strong political and regulatory push to change its electricity mix and build more clean energy infrastructure, many states around the country are still behind. While solar power accounts for 13% of electricity generation in California, it only accounts for 0.2% of the electricity generation of a Sun Belt state like Tennessee.
The unfortunate reality is that as companies look to make investments in renewable energy, they are stuck in a system that ignores the real-world connection between a megawatt-hour of clean electricity being produced and the carbon emissions it is responsible for avoiding.
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That means that the corporate carbon accounting system that companies use to credit their reductions, counts a $2 REC from a years-old hydro plant in Vermont just the same as a $40 REC from a new solar project in West Virginia. Just one look at the EPA’s Green Power Partner list shows that a majority of the companies being championed for leading the charge to become 100% Renewable, are doing so by buying hundreds of thousands of dollars worth of RECs, but have no new clean energy projects to show for it.
Ignoring the actual carbon impact of a REC is not only obscuring the action companies are taking, but it is a dangerous blindspot for all of us that take the climate crisis seriously and are now more in tune with environmental justice and wrestling with questions of equity.
The reality is that the middle part of the country, where there is no regulatory or political incentive to change the electricity mix, is staying the same and the corporations that have been leading the charge on climate change are not incentivized to act there. For those of us living here in “fly over” states and advocating for our communities, it is hard to convince well-meaning executives at NGOs on the Coasts that what’s working in California and even New Jersey is not working here. Our clean energy revolution has been lopsided, and we need a reset.
In the past year, the world has dramatically changed and the climate crisis is top of mind more now than ever before. It is time to transition out of the old way of doing things in corporate sustainability and invest in new renewable energy projects that are tied to clear carbon emissions reductions from the grid.
Researchers, advocates, and entrepreneurs have done the hard work of looking for new and interesting tools for companies to measure their carbon footprints, make new commitments, and reduce their emissions. We need more of that innovation and a corporate sustainability community that embraces those new tools.
For the better part of the past year, my company has been working with some of these folks to offer another option to finance new solar projects without a long-term PPA contract and expand the communities where these investments happen and the type of companies that can participate in building new clean energy infrastructure. Our goal with Clearloop is to more tightly align the construction of new solar projects with carbon emissions reductions in our electricity grid.
The transaction is simple–companies looking to reduce their carbon emissions can do so by building solar projects to replace electric power generated from fossil fuels with clean, renewable solar power.
We recently released a white paper titled “Solar in the Shadows: Expanding Access to Clean Energy in Forgotten America“ in conjunction with WattTime and Downstream Strategies to map out and share with more innovators the great opportunity we all have to make climate action investments across our country.
Businesses are not waiting on governments or regulations to make the first moves, so we must build on those learnings to help them continue to drive climate action directly. A reset brings new ideas that push conventional wisdom and allows companies to use more tools to help in the fight against climate change. This is where companies of all sizes can step in and build to offset their footprints, expand access to clean energy, and ultimately decarbonize our grid. For many generations, our country has prided itself on our resilience in the face of adversity and the entrepreneurial spirit that keeps our ideas at the cutting-edge of the world. It’s time for us to tap into that spirit again and keep innovations in corporate sustainability fresh. We’re excited to offer a new and improved tool for those on the front lines fighting climate change and hope that the corporate sustainability system will reset with us. We have a common enemy and a shared goal to ensure sunnier days ahead.
“Renewables, Energy Storage and How Utilities are Preparing for a Sustainable Future” is the focus of the October DISTRIBUTECH+ virtual event. Learn about the event here and REGISTER to see the full agenda. It’s free!