Careful what you wish for: Trump’s environmental attacks will harm industry

In the same week Apple raised $1 billion through green bonds to invest in clean energy, and Amazon put solar panels on a million square foot processing facility, the Trump administration – at the urging of the worst elements in the oil and gas industry –proposed a two-year delay of sensible rules that would limit emissions of methane and other air pollutants. While a federal court since struck down a previous 90-day delay as unlawful, the two-year delay is still subject to public comment, and many expect the administration’s attacks on methane safeguards to continue through other means.

Natural gas, which is mostly methane, has been put forward as a cleaner alternative to other fossil fuels and as an energy resource that can play a key role in the transition to a lower-carbon future. But now more than ever, that proposition is now called into serious question.

How will natural gas compete in a changing world?

Every year, oil and gas operations around the country emit some 8-10 million metric tons of methane into the air. Methane is a highly potent greenhouse gas, responsible for about a quarter of the climate warming we’re experiencing today – and those emissions come mingled with a host of other smog-forming and carcinogenic pollutants.

There are cost-effective, proven ways to reduce these emissions, and leading companies are already implementing them. The problem is, many companies refuse to address the problem on their own. And now they’re looking to the Trump administration for a free pass to pollute.

When trade associations like the American Petroleum Institute attack cost-effective policies that protect public health and the climate, it sends a signal that the natural gas industry will do everything it can to maximize short-term profits – even at the risk of damaging the reputation of the industry in the eyes of the public and jeopardizing its ability to operate over the long term.

The question is: In an increasingly carbon constrained world, what is the natural gas industry’s plan for the future?

We’re not arguing that gas is at risk of going away tomorrow. The United States leads the world in natural gas production, as new technologies and processes have unlocked massive, cheap reserves. But make no mistake, the transition to cleaner energy in the U.S. and across the globe is irreversible and accelerating. In this context, fighting reasonable and necessary emissions rules only magnifies risk for the natural gas industry and its investors. It’s a head-in-the-sand approach that ignores the realities of what consumers, communities and markets demand.

Capital markets shifting to cleaner companies and forms of energy

The Trump administration’s recent moves come at a time when environmental concerns informing investment decisions are reaching record highs. For example, investors with $10 trillion in assets under management have committed to the Montreal Carbon Pledge to reduce the carbon footprint of their portfolios, with an eye towards portfolio de-carbonization in the long run.

As part of the shift to assets in lower emitting companies and industries, investors are demanding better carbon and methane disclosure as well as proactive environmental management. The recent watershed Exxon vote, in which 62% of investors (including industry titans like BlackRock and Vanguard) demanded better climate risk disclosure from Exxon management, showed that carbon risk considerations have hit the mainstream.

Increasingly, investors see methane simply as a form of carbon risk in need of management, not neglect. And methane waste can be cost-effectively managed – as proven in states like Colorado where production has continued apace even as strict methane rules have come on the books.

On top of investors’ efforts to shift portfolios towards cleaner companies, the divestment movement also continues to grow, driven by a range of environmental risks of owning fossil fuel stocks. Just recently mainstream investor CalSTRS divested from coal. Going forward, increasing numbers of investors will look carefully at the environmental record of oil and natural gas companies in determining their comfort level in continuing to invest.

Some companies lead but no substitute for commonsense rules

Companies like Southwestern Energy, Noble, Shell and others have led on methane emissions by setting methane targets, supporting state-based regulations, and working with the Oil and Gas Methane Partnership to disclose methane emissions. Their efforts certainly deserve recognition, and are supported by some investors who factor strong methane management into investment decision.

Still, voluntary actions by the few are no substitute for rules and oversight that require responsible operations by the thousands of oil and gas companies operating in the United States. Some of these companies simply lack a commitment to sustainability and to operating over the long-term, and will not rein in emissions unless they are required to do so by law.

Methane safeguards serve the long-term interests of industry and investors

As the scientific reality of climate change and consumer demand steer the world toward a cleaner energy future, will attacks on environmental protections inflict lasting damage on the oil and gas industry? Only time will tell. It’s likely, however, that if the loudest industry voices continue to oppose rules that could guide it toward a cleaner future, the industry as a whole will suffer.  Unfortunately, that will include the more forward-leaning companies, which will be dragged down by their intransigent peers. This outcome will become all the more likely thanks to the Trump administration’s erosion of environmental safeguards that are fundamental to responsible development.

It’s time for oil and gas operators and mainstream investors with a long-term view to take a look at what rules and regulations are needed to rein in methane emissions in their industry. And they also need decide if they want to align themselves with an administration whose policies may be unwittingly handicapping the very industry it attempts to serve.

Six months into the presidency, where are all the jobs?

We’re halfway through “Energy Week” at the White House–a series of events promoting President Trump’s energy policies. These are policies the administration claims will boost the economy and grow America’s energy dominance (note the change from “energy interdependence” to “energy dominance”), while creating jobs by reviving America’s declining coal industry.

It’s the same plan we’ve heard since Trump’s first day as President. So let’s ask ourselves, is it working?

Slashing climate policies

In March, Trump signed an executive order to dismantle the Clean Power Plan, and on June 1st, he followed through on his promise to pull the U.S. out of the Paris Agreement. These reckless decisions were a major setback to both our nation’s economy and our job market.

The decision to withdraw from Paris was justified by the “economic unfairness” that it would bring upon the country, citing negative effects on jobs. The administration claimed they would continue to be the “cleanest and most environmentally friendly country on Earth”, but not at the expense of our businesses and jobs. After business and world leaders criticized his actions, Trump defended his decision by stating he was simply fulfilling a campaign promise.

This was a campaign promise to bring back [coal] jobs. It’s time we check whether Trump has delivered.

Liz Delaney, Program Director, EDF Climate Corps

America’s job board: where does coal fall on the list?

In addition to his actions on the Clean Power Plan and the Paris agreement, Trump has focused on weakening health protections that reduce the impacts associated with the production of fossil fuels, like coal. Since then, the coal mining industry has added a mere 1,000 jobs, bringing us to a total of just 51,000 coal mining jobs nationwide—keep in mind that’s roughly only .03 percent of the more than 150,000,000 jobs in the U.S—as of May 2017. And of those industry workers, only roughly one-fifth actually mine the coal. These numbers fall far behind the 50,000 coal jobs that EPA Administrator Scott Pruitt claimed have been created in just the time since Trump became president.

It’s time we look at the long-term picture. The economic realities of the past few decades haven’t favored coal power and this isn’t going to change. The decline of coal-related jobs is partly due to the rise in cheap natural gas, combined with increased continuous automation, and the industry is forecasted to see an additional 51% reduction in generation by 2040. We’re heading in a new direction. The U.S. power sector—as states and power companies reaffirm their commitments to de-carbonization—is well-positioned to continue to reduce carbon pollution.

Meanwhile, despite Trump’s best efforts to dismantle their progress, renewables are on track to see a 169 percent increase in generation by 2040, bringing with them clean, local and well-paying jobs. There are an estimated 4-4.5 million clean and sustainability jobs in the U.S. today according to this Now Hiring report. Solar and wind alone account for close to half a million jobs, and energy efficiency makes up another 2.2 million more jobs. The rest are in fields such as natural resources conservation, corporate sustainability and environmental education.

The future of clean jobs only looks more promising. Wind turbine technicians are the fastest-growing occupations in America, adding jobs over nine times faster than the overall economy, just behind solar jobs, which are growing at a rate 17 times faster than the rest of the economy. And, investing in renewables or energy efficiency results in about 5 more jobs than the same investment in fossil fuels. That’s an opportunity we can’t afford to turn our backs on.

Moving the needle in the right direction

If Trump wants to fulfill his campaign promises of creating jobs, then he should redirect his attention from the dying coal industry to the booming clean energy sector. Why? Because it makes economic sense. That’s why business leaders, investors and politicians are demanding that the Trump administration deliver a plan to address climate change with smart policies.

There’s a way for Trump to make good on his campaign promises to bring back America's jobs and lead us closer to becoming energy “dominant”. The answer is to invest in clean energy and energy efficiency jobs.


Follow Liz on Twitter, @lizdelaneylobo


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Business will not walk backward on climate

Our businessman president just flunked one of the most important tests of his presidency: failing to listen to business leaders on the Paris climate agreement.

Despite the hundreds of companies and corporate CEOs calling for continued U.S. leadership on climate – in full-page ads in the Wall Street Journal and New York Times, on the Low Carbon USA website, and in direct outreach to the administration – Trump chose to side with the laggards. This is deeply disappointing and will harm American workers and business by undermining our competitiveness in the global clean energy economy.

Trump’s decision to withdraw from the Paris agreement, however, will not stem the tide of American businesses taking action to stabilize the climate and safeguard our planet. Private sector leaders, unlike our president, have moved beyond the false choice of a healthy economy or a healthy environment; we need both. Which is why leading companies and investors are poised to deliver clean air, clean water and clean energy in ways that increase jobs, incomes and competitiveness.

Tom Murray, VP Corporate Partnerships, EDF

While the Trump administration has ceded global leadership on climate, corporate America is moving ahead with plans to invest in clean energy and cut emissions. Long-term, global competitiveness demands it.

Leadership on climate and energy is driven by long-term economics, not short-term politics.

American business won’t back down from this latest challenge. In fact, it seems the business community is more motivated on climate than ever before. Cargill CEO David MacLennan summed it up best: “Cargill has no intention of backing away from our efforts to address climate change in our supply chains around the world and in fact this would inspire us to work even harder.”

Companies need to forge ahead by pursing aggressive science-based, emissions reduction targets and expanding their efforts to slash emissions throughout their operations and supply chains. Take PepsiCo, which recently announced that its climate goal to reduce absolute GHG emissions across its value chain by at least 20% by 2030 has been approved by the Science Based Targets initiative.

Business leaders can use Hewlett Packard Enterprises as a model. The information technology company created the world’s first comprehensive supply chain management program based on climate science and requires 80% of manufacturing suppliers to set science-based emissions reduction targets by 2025.

And just last week – despite the unsettled future of U.S. participation in the Paris Agreement – Tyson Foods announced it will develop science-based greenhouse gas and outcome-based water conservation targets for their entire supply chain.

These high-impact corporate initiatives need to be applauded, and the tools and resources used to achieve these goals should be replicated across industries.

Business will not allow positive climate momentum to come to a halt

The clean energy momentum generated by business over the last decade will not come to an abrupt halt. Companies like Apple, AB InBev and Walmart will not turn their back on the clean energy commitments they’ve made to customers, employees and the planet. Investors, like we saw with ExxonMobil, will keep pressure on companies to clearly report how climate change is affecting business.  And CEOs like General Electric's Jeffrey Immelt or Tesla's Elon Musk, who have been outspoken about remaining in the Paris agreement, will not back away from their company’s climate efforts because they understand how leaving Paris will make it harder to do business around the world. These voices need to keep encouraging others in the business community to join their efforts.

What is the plan? Inaction is unacceptable.

In this new post-Paris world, companies must now demand that the Trump administration and Congress deliver a plan to address climate change. Leading cities, states and companies will continue to move forward, but won’t be enough to deliver the reductions required from the world’s second largest emitter.  Smart climate and energy policy is required to provide the deep emission reductions the world needs and the certainty that business needs for planning, investment decisions, and job growth.

Unfortunately, the president failed to listen to the business community he was once a proud part of for so many years. With the President lagging behind, real business leaders will continue to step up lead the way to a thriving clean energy economy; EDF will have their back. We will continue to engage with business in this time of uncertainty to help shape a future where both business and nature prosper.

If the president won’t listen to business leaders in the future on climate, I hope he will follow the words of one of his favorite presidents, Abraham Lincoln, who said, “I walk slowly, but I never walk backward.”


Follow Tom on Twitter, @tpmurray


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No “alternative facts” needed: leading on sustainability is smart business strategy

A Businessman is looking out the window in a modern panoramic meeting room in New York. The concept of the meeting of the Board of Director of the huge transnational corporation.

For the people who dedicate their lives to helping keep the planet livable, it’s hard to wrap one’s mind around our new weird, warped, post-election world. Every day seems to bring some new government official denying facts and science (aka reality), or doing unthinkable damage to the suddenly-less-venerable institutions they now lead.

As someone who has a 20-year track record of working side-by-side with the private sector to create positive environmental change, I can just imagine how anxious business executives must be feeling these days. The specter of a three a.m. tweet from the White House demanding that they run their company according to a Presidential whim, rather than the realities of the global marketplace (or the expectations of shareholders), can make for a lot of sleepless nights.

Unlike certain “business-executive-Presidents", however, real CEOs have to be fact-driven.

And the forward-thinking executives—the ones who are thinking hard about the long-term growth, profitability and resiliency of their companies—are well aware of the facts. They know that human-caused climate change is real, and carries with it huge costs. Executives selling food grown in rapidly changing landscapes and/or products dependent on materials from across the globe aren’t playing in a fantasy world where climate change is a “hoax invented by China.”

And they know that how we deal with climate change will determine whether we will be a driver or a destroyer of business value. As a peer-reviewed study in the journal Nature recently found (and the New York Times reported): "even if the world is able to stave off an increase in atmospheric temperatures of 2 degrees Celsius or 3.6 degrees Fahrenheit — a goal agreed to as part of the Paris deal — climate change could wipe out $1.7 trillion worth of global financial assets."

So, I’m hopeful that, at least in terms of sustainability, the rational decisions being made on Wall Street will act as a counter-balance to what appears to be erratic decisions coming out of Washington. Consider just a few of the recent announcements and actions of the private sector:

  • In just the past 3 months, Google, Microsoft, Pepsi, Smithfield Foods, Walmart and many others have continued to lead the way and prove what’s possible through bold, science-based goals, investments in clean energy and expanded efforts to drive down emissions in their operations and supply chains.
  • At the recent World Economic Forum (WEF) in Davos, Unilever CEO Paul Polman said “to make America great again, climate action is very logical. This is a very convincing story for job creation and economic growth.” My colleagues at EDF Climate Corps back this up with data; the sustainability sector is booming with jobs that 1.) can’t be outsourced, and 2.) are readily available in all fifty states.
  • A WEF report on the future of retail talks about “the golden age of the consumer” and the implications and opportunities that are created for sustainability by addressing how goods are delivered—what is called the “last mile of delivery”—and how products are packaged.
  • Commenting on that same report, Walmart CEO Doug McMillon pointed out that sustainability will impact retail in ways far beyond logistics and packaging: in this age of social media sharing, the push for transparency in supply chains will be customer-driven. McMillon knows that “retailers will only survive if their business creates shared value that benefits shareholders and society.”
  • Finally, in a recent op-ed entitled Why Walmart is doubling down on its commitment to climate change, Walmart board member Rob Walton, gave a simple answer: because it’s good for business! “We set [our climate goals] because we wanted to help address climate change and improve lives, while also strengthening our company and reducing expenses,” he said. “We thought it would be a win-win: good for society, and good for Walmart.  Eleven years later, that's exactly what we've seen.”

    Elizabeth Sturcken, Managing Director, EDF+Business

    Elizabeth Sturcken, Managing Director, EDF+Business

That’s a long list—and one that adds to the mounting evidence that corporate America “gets it”:

momentum for business leadership on sustainability is here to stay. Which is in no way surprising, because after my many years of working with business, I’ve seen firsthand the immense value creation that comes with moving forward—not backward—on environmental issues.

So, for all that has changed in these times of “alternative facts,” those who care about having a livable, thriving planet can feel confident that they have a powerful ally in business. Because when it comes to our climate, our health and our planet itself, if we’re not making progress, we’re losing.

Will the new President flunk the climate business test?

The climate business test for TrumpFive years ago I turned in my laptop and brought my business consulting experience to Environmental Defense Fund. Some might see that move as making a break. I saw it as honoring a connection.

Public service may be the noblest calling. But it is also among the hardest. That’s why I believe business leaders have a role in government. Strong business leaders ask questions – and care about the answers. They consult experts who know more than them – and then solve thorny problems that matter to peoples’ lives. They take accountability.

So as a student of business, for much of my life I have casually told friends I would like to see an experienced business person in the Oval Office.

Now we have one.

As Donald Trump takes office, he must draw on the best skills represented in the business world.

Trump and his administration must make an urgent commitment on the economic issue of climate change and clean energy, before a problem worsens, accountability mounts, and the U.S., as the world’s second largest pollution emitter, is seen as a deadbeat on the global stage.

Trump’s handling of climate may well define his legacy, especially for generations of Americans to come.

Yet Mr. Trump has called climate change a hoax, nominated a climate skeptic to head our Environmental Protection Agency, and suggested he may pull the United States out of the Paris Climate Agreement.

We will learn a lot about the administration’s economic prowess by whether it remains lashed to a special interest agenda, or studies up and seizes climate action for the economic opportunity that it is.

The incoming administration should take a page from Gary Garfield – ex-CEO of Tennessee based Bridgestone. In an open letter to the President-Elect, Mr. Garfield observed: “A hasty decision on [leaving the Paris climate agreement], will likely isolate our nation, cede technology, innovation and jobs to China, and limit market access for our exporters.”

But it doesn’t have to be that way. Gary Garfield notes: “A decision to stay the course on climate and institute policies harnessing American ingenuity to create truly efficient clean energy technology — akin to the effort behind the Manhattan Project — will help drive both jobs and our economy for decades to come.” Mr. Garfield should know a business opportunity when he sees one; he grew profits at Bridgestone five-fold in six years.

And he is not alone. From technology to power, and investment to oil and gas, business leaders across sectors have pinpointed the urgency of addressing climate change, not just because it is the right thing to do, but because de-carbonization is one of the great economic opportunities in the 21st century:

  • “With tens of billions of dollars of U.S. renewable energy investment in the works this year alone, and far more globally, the question for American political leadership is whether they want to harness this momentum and potential for economic growth” – Jonas Kron, Trillium Asset Management
  • “We support [California’s] vision for a clean energy future and agree that we need to take action today to meet the challenge.” – Melissa Lavinson, PG&E Corporation
  • “In Statoil, we acknowledge that there is overwhelming evidence for human-induced climate change. Climate change is happening.”
  • “Finding more renewable and low-carbon energy alternatives and reducing energy intensity lowers operating costs and can enhance operational flexibility.” – Walmart

Low Carbon USAAnd there are scores more business leaders who recognize the data on climate change’s seriousness and recognize the responsibility – and the opportunity – their companies have to rise to the challenge. Over 600 business leaders wrote to Trump, Congress, and global leaders, to support continuation of low carbon policies, investment in the low carbon economy, and continued U.S. participation in the Paris Agreement.

There is no question that business leaders have spoken, and will continue to speak up.

Now the question is: Will Donald Trump have the business sense to listen and lead?


Additional reading:

Business won't back down on clean energy future

With a record $1.4 trillion in sustainability assets, investors bail on fossil fuels


Follow Ben Ratner on Twitter, @RatnerBen


 

America knows better: Addressing climate change is good business

President-elect Donald Trump made claims of his own business smarts a cornerstone of his campaign. Vote for him, the logic went, and send a first-rate businessman to the Oval Office to apply business acumen to make America great. Unfortunately, Trump’s actions to date on climate and energy – notably charging a climate change denier with leading the EPA transition and signaling desire to abandon the historic Paris climate accords – send a message of business obliviousness.

In contrast, a smart business approach would embrace tackling greenhouse gas emissions and supporting clean energy. Here are four reasons why:

  1. Create American jobs – The opportunity to create new American jobs in the transition to clean energy is tremendous. There are now more jobs in solar energy than in coal mining, and the number of solar jobs has grown more than 20 percent in each of the last three years. States like Florida and Nevada are bountiful in sun and can contribute to American energy self-sufficiency.Moreover, just as smart action to nurture domestic clean energy can accelerate jobs in the renewable sector, there are jobs on the line helping the oil and gas industry reduce its air pollution in a cost effective way. Environmental Defense Fund found that there are over 70 American firms employing Americans to help keep potent methane emissions in natural gas pipelines and out of the atmosphere. These jobs, thriving in states like Texas and Pennsylvania, are mainly small business and above average wages – exactly what we all want to see more of. Of course, it’s a competitive global economy, and taking our foot off the pedal in creating green jobs could well cede the space to others like China, which already leads the United States in clean energy investment. Whatever a politician’s personal views on climate change, it is undeniable that global demand is growing for clean energy solutions. Growing demand means growing commercial opportunity for the United States in terms of innovation and exports. But only if we seize it.
  1. Listen to leading American businesses – Savvy business people listen to each other. So Mr. Trump should be interested to learn that 154 American businesses supported the American Businesses Act on Climate Pledge in the run-up to the Paris climate accords. These businesses are a part of the backbone of the American economy, employing nearly 11 million people across all 50 states, with a then market capitalization of over $7 trillion. Participating companies of particular interest: 21st Century Fox, Dupont, Wal-Mart, even a name that will be familiar to any casino magnate – MGM Resorts.These companies not only voiced support for a strong Paris outcome, they committed to increase their low-carbon investments in line with the direction of America’s leadership. Pulling out the rug from American businesses investing in low-carbon would send a destabilizing signal to the market. More recently, 365 companies including Unilever, Intel, General Mills and others reinforced that “implementing the Paris Agreement will enable and encourage businesses and investors to turn the billions of dollars in existing low-carbon investments into the trillions of dollars the world needs to bring clean energy and prosperity to all”. In sum, the overwhelming voice of businesses who have weighed in on the Paris talks are supportive of climate action. This business groundswell cannot be ignored. Nor should Trump ignore his own prior signing of a 2009 letter that failure to act on climate and the environment would cause “catastrophic and irreversible consequences for humanity and our planet.”
  1. It hits home – Continued American leadership on climate change can help mitigate physical risks to some of Mr. Trump’s most cherished investments, for example the Mar-a-Lago golf club in Palm Beach. NOAA found that “tidal flooding is increasing in frequency within the U.S. coastal communities due to sea level rise from climate change and local land subsidence.”Just a week before the election, the Palm Beach Daily News reported that the local Shore Protection Board unanimously recommended a six-figure “coastal vulnerability evaluation” as flooding has remained long after high tide in certain cases.
  1. Voters want clean energy – One of many things that will change for Donald Trump is that going from CEO to President means having a boss – actually about 300 of million of them. A recent Gallup poll found that 64% of Americans worry “a fair amount” or “a great deal” about climate change, an increase from last year, and including 84% of Democrats, 64% of independents, and 40% of Republicans. Clean energy is also wildly popular, with over 80% of Americans saying they support increased wind and solar, according to a recent Pew Poll.

Early on the campaign trail, Donald Trump often used his association with his alma mater, the Wharton School at the University of Pennsylvania, as Exhibit A in establishing his business smarts. Political leaders including Mr. Trump must learn from experts like Wharton’s Professor Eric Orts, who noted that moving away from President Obama’s climate change polices would come with stiff costs.

From missing out on job creation to ignoring business leaders who have studied the issue and have a stake in its resolution, and from fueling risk to Trump’s own business interests to overlooking voter desires, the case is clear that the costs are stiff indeed. Climate action is good business, and the smart money says it’s time to stay the course.