Author: Aaron Rodriguez

By Tom Murray

A few weeks ago, I attended the Earth Day Network’s Climate Leadership Gala in Washington, DC.  Each year the event brings together more than 300 leaders from business, government and the NGO community to celebrate achievements in working towards a clean energy future. This year’s top honor, the Climate Visionary Award, was presented to Unilever CEO Paul Polman for his commitment to fighting climate change.

Bold, passionate leadership like Polman’s is essential to tackling climate change while helping to create an economy that benefits us all. He understands that it’s not a choice between business and the environment. In fact, a thriving economy depends on a thriving environment.

Corporate sustainability leadership is now more important than ever. It’s clear that the Trump Administration’s efforts to roll-back environmental protections have thrust U.S. businesses into a critical leadership role on clean energy and climate change. (In fact, I’ll be talking with business leaders later today about how they are “responding to the new norm” at the Sustainable Brands Conference.)

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A thriving economy depends on a thriving environment – why business must lead on climate – @tpmurray
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Over the past 25 years at EDF we’ve seen corporate sustainability go from simple operational efficiencies to global supply chain collaborations; now it’s time to go further. Business must continue to raise the bar for sustainability leadership.

How?

1. Set big goals, then tell the world

 Thinking big and setting big goals, are required to drive big innovation and big results.  Many large companies have demonstrated that if you commit to aggressive, science-based, sustainability goals, you can deliver meaningful business and environmental results. For example, Walmart, a longtime EDF partner with a track record of setting aggressive yet achievable climate goals, has recently set its sights even higher by setting a goal to source half of the company’s energy from renewable sources by 2025 and by launching Project Gigaton, a cumulative one gigaton emissions reduction in its supply chain by 2030.

And Walmart is not the only one. Other companies are stepping up as well – especially around commitments to go 100 percent renewable. Whether its online marketplace eBay committing to 100 percent renewable power in all data centers & offices by 2025, Tesco, one of the world’s largest retailers, announcing science-based targets and committing to 100 percent renewable electricity by 2030 or AB InBev committing to 100 percent renewable power, companies from diverse industries are taking a positive step forward.

While setting goals is a great first step, companies also need to communicate about the goals and progress. Not only does this increase transparency into a business’ sustainability efforts, it lets the world know that sustainability is core to its business. Publicly committing to sustainability goals sends a strong signal to suppliers, shareholders and customers.

2. Collaborate for scale

In December 2016 I wrote about Smithfield Foods, the world’s number one pork producer, and its plan to cut greenhouse gas emissions 25 percent by 2025. The commitment was important both because Smithfield was the first major protein company to adopt a greenhouse gas reduction goal but also because the reductions would come from across Smithfield’s supply chain, on company-owned farms, at processing facilities and throughout its transportation network.

Smithfield understands that some environmental challenges are too big to handle on their own, and they know collaboration is the key to deliver impact at scale.

Other companies are also looking beyond their own supply chain and forming mutually beneficial partnerships. Take the recent partnership between UPS and Sealed Air Corporation, for example. The two companies have announced the opening of a Packaging Innovation Center in Louisville, Kentucky where they will solve the packaging and shipping challenges of e-commerce retailers but also drive new efficiencies while minimizing waste. This is a critical issue that is material to both their businesses, and by joining forces, are finding ways to solve an environmental challenge while improving their bottom lines.

3. Publicly support smart climate policy

I can’t stress how critical it is right now for business leaders to move beyond their comfort zones and make their voices heard on smart climate and environmental policy. If you want to be a sustainability leader, continuing to hoe your own garden is no longer enough.  You need to align your strategy, operations, AND advocacy.  We know that environmental safeguards drive innovation, create jobs, and support long-term strategic planning.

The good news is leading voices are chiming in, from CEOs signing an open letter to Trump to more than 1,000 companies signing the Low-Carbon USA letter, in favor of environmental policies.

Some companies like Tiffany & Co. are also taking a public stand on their own. The company used its usual ad position in the New York Times to tell President Trump directly that Tiffany is backing policies that will lead us to a clean energy future.

The Way Forward

Taking the leadership mantle is never easy, but now is the time for every corporate leader to get off the sidelines and into the game. There’s plenty of room for more leaders like Polman who are ready to address climate change head-on, creating opportunities for economic growth, new jobs, and a cleaner future.  Will your company be next?

Follow Tom Murray on Twitter: @TPMurray

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By Namrita Kapur

With the U.S. role in the Paris Climate Agreement hanging in the balance, over 280 investors managing a collective $17 trillion in assets spoke up in support of the agreement:

As long-term institutional investors, we believe that the mitigation of climate change is essential for the safeguarding of our investments. . . . . We urge all nations to stand by their commitments to the agreement.

Why do investors care?  As pointed out in a blog earlier this year, for investors, it all comes down to risk and return. And, where climate change is concerned, this is a risk that is omnipresent.

Simply put, investors cannot diversify away from the risks of climate change. Unlike other risks such as currency fluctuations or new regulations, the disruptive impacts of climate change on the global economic system are so pervasive they cannot be offset by simply shifting stock portfolios from one industry to another.

A study from Cambridge University found equity portfolios face losses of up to 45% from climate shocks, with only half of these losses being “hedgeable.” Likewise, The Economist Intelligence Unit estimates that investors are at risk of losing $4.2 trillion by 2100, with losses accruing across sectors from real estate to telecom and manufacturing.

Because investors recognize that climate risk is unavoidable, they support a coordinated global effort as envisioned in the Paris Agreement. It is also why investors have already expressed such strong support for regulatory limits on carbon and methane emissions.  Governments globally will need to take further proactive action to limit greenhouse gases, and incentivize technology shifts towards lower-carbon energy.

Seizing opportunities in a low-carbon economy

Technology changes will require significant adjustments in how global capital is allocated, which is an opportunity investors are eager to seize because of the promise of risk-adjusted returns in the space.

It is estimated that a shift to a clean-energy economy will require $93 trillion in new investments between 2015 and 2030 and the rise of impact investing shows markets are starting to respond to opportunities in renewable energy, grid modernization, and energy efficiency among others.

For example, the green bond market has grown from $11 billion to $81 billion between 2011 and 2016 with projections for 2017 as high as $150 billion. On top of this, leading global investment banks have already pledged billions towards sustainable investing.

And where capital flows, so do jobs.

As we’re seeing in the US, renewable energy jobs grew at a compound annual growth rate of nearly 6% between 2012 and 2015 and the solar industry is creating jobs 12 times faster than the rest of the economy.  Similarly, the methane mitigation industry is putting Americans and Canadians to work limiting highly potent emissions from oil and gas development.

Technology and capital changes are already happening, but are unlikely to happen quickly enough on their own.  Government policies and frameworks that speed this transition, like a price on carbon, will be critical.

Which brings us back to the importance of the Paris Agreement…

The Paris Agreement is crucial to addressing climate change

Investors vote with their dollars, and are strongly backing U.S. participation in the Paris Agreement. Global investors understand the risk of climate change and see the Paris Agreement as a good return on investment, with an optimistic $17 trillion nod to the power of capital markets to provide the innovation and jobs we need if the right policies are in place. The U.S. administration should ensure it is considering the voice of investors and the capital they stand ready to put to use as it makes its decision.

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By Martha Roberts

Earlier this year, Environmental Protection Agency (EPA) Administrator Scott Pruitt announced an effort to seek public input on EPA safeguards that should be revoked or rolled back to “reduce regulatory burden.”

What was the overwhelming message he heard in response?

Let EPA do its job and protect Americans from dangerous pollution.

Numerous news articles have detailed the tens of thousands of responses EPA received from individual Americans decrying Pruitt’s biased, predetermined effort to gut important safeguards. These public comments are still being uploaded onto an official website — but already there are more than 183,000 of them, and the overwhelming majority are in favor of strong EPA safeguards.

As one comment reminded Pruitt:

Future generations are counting on us to leave an environment that supports good health, and a world worth living in. Don’t jeopardize the progress that has been made by rolling back regulations that are taking us in the right direction. Your job is to protect the environment for the benefit of all, not to squander progress for the financial gain of a few.

Another citizen noted during a listening session:

I actually enjoy breathing clean air and drinking clean water and would find it quite burdensome not to.

It’s well documented that EPA safeguards are an incredible American success story, saving countless lives and improving health across the country. We’ve made tremendous strides in improving air quality, reducing toxic lead and mercury pollution, addressing acid rain, and other remarkable achievements — all while the economy has grown and added jobs.

We still have more work to do though. According to the American Lung Association, more than 125 million Americans live in communities with unhealthy levels of air pollution.

Industry pushes for rollbacks

EPA senior officials are due to present a report to Pruitt today on their progress in identifying safeguards to repeal or roll back – not even two weeks after the rushed public comment period ended.

It’s hard to know if this report will be made public, but we are starting to get a glimpse of the input that Pruitt and his team are hearing from those who oppose vital safeguards.

For instance, the American Petroleum Institute’s (API) 25-page list of requests includes weakening protections against smog and undercutting common-sense standards to curb harmful methane and toxic air pollution from oil and gas production.

API’s list also complains that EPA’s Clean Air Scientific Advisory Panel is “biased” because “it can be difficult for industry representatives to be included on the committees.”

As we wrote about in an earlier post, these industry requests come on top of an earlier solicitation by the Trump Administration for industry proposals to roll back protections — one where trade associations brazenly asked for cuts to important health studies and safeguards.

Politicians target safeguards against mercury, smog, and other dangers

One remarkable letter to EPA came from eight state politicians. As has been well documented, while Scott Pruitt was Oklahoma’s Attorney General he spearheaded an intertwined alliance between state attorneys general and major fossil fuel industries — going so far as to submit industry requests to EPA on Oklahoma letterhead and later noting that’s “actually called representative government in my view of the world.”

In the new letter, Pruitt’s attorney general allies detail a list of twenty bedrock safeguards to weaken or eliminate. These include protections against mercury pollution, smog, soot, and many others.

These eight politicians even ask EPA to reject the agency’s science-based conclusion that greenhouse gases endanger human health and welfare — a conclusion based on an extensive, exhaustive record that was upheld by a federal court of appeals several years ago. Their letter makes no mention of the citizens who would be sickened and harmed by these roll backs.

The signatories are the attorneys general from Michigan, Oklahoma, Indiana, Alabama, Arkansas, West Virginia, Louisiana, and South Carolina.

Scott Pruitt: don’t put Americans’ health at risk

With EPA’s help, we’ve made remarkable progress in cleaning up our air and water. The American public just delivered a clear and overwhelming message to Scott Pruitt – don’t risk that tremendous progress, or the health of our families, by rolling back EPA safeguards.

Administrator Pruitt should listen.

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By Drew Nelson

In a sign of growing recognition of the global methane opportunity, the Government of Canada today proposed new regulations that aim to curb methane emissions across the Canadian oil and gas industry. This marks the first regulatory package to be introduced by the Trudeau administration for Canada to meet its overall climate goals. Now that the proposal is out, the draft federal methane rules will be open for public comment before they are finalized later this year. The new rules, if passed, will reduce waste, save money, create jobs, pollute less, and have Canada keep pace with jurisdictions across the globe that are addressing methane.

Methane is an extremely potent greenhouse gas with over 80 times the warming power of carbon dioxide for the first 20 years it’s in the atmosphere. A common byproduct of oil production, methane is also used widely in the form of natural gas. This means that there is an incentive for oil and gas companies to control these emissions and stop needless energy waste.

During the lead up to the release of the Canadian methane rules, however, the inverse proved true. The Canadian oil and gas lobby worked to weaken and delay implementation of the proposed regulations. Because of concessions that have already been made to appease industry, Canada now has ground to make up to retain its ability to deliver on its climate goals.

Here are four opportunities for Canada to do just that:

1. Reset the Timeline

The most significant watering down of the regulations was the delayed implementation timetable by as much as three years. These delays will allow an estimated 55 million tons of additional greenhouse gas emissions. Trudeau needs to reset the timetable so the regulations begin in 2019 (not 2020) and full implementation occurs by 2022 (not 2023).

2. Require Quarterly Leak Inspections

Leaks are one of the largest sources of methane emissions in Canada. A recent study from the David Suzuki Foundation found significantly more emissions were escaping from Canadian oil and gas operations, suggesting that there are actually more leaks than what is being reported. However, operators are not currently required to look for, let alone fix these leaks at most oil and gas facilities. This doesn’t pass the common sense test. After all, how can industry reduce these leaks if they don’t even have to look for them?

Methane is invisible and odorless, and many leaks are intermittent. So, if you’re not looking for leaks, you won’t find them. The scientific literature is clear that with more frequent monitoring, the more likely you are to catch and fix leaks. This is a central reason why quarterly leak detection and repair is required in some capacity by both federal and state regulations across the U.S.  Canada’s federal proposal calls for inspections only three times a year, but this should be improved by following best practices that have been proven in other jurisdictions.

3. Tighten the “Potential to Emit” Threshold

“Potential-to-emit” (PTE) is a measurement of how much methane a facility could, in theory, emit. A recent study by Environmental Defence shows that oil facilities have higher methane emissions than gas facilities. This is problematic because many of these high-emitting oil facilities fall below the PTE threshold in the draft regulation. This is a serious gap; you don’t let a driver with a history of speeding have a higher speed limit, so why would you let the leakiest sites avoid having to reduce their emissions? As currently proposed, the regulations would apply to facilities with a PTE greater than 60,000 cubic meters per year, but lowering this threshold and requiring systematic would ensure that the leakiest sites are included.

4. Demand Real Equivalency

Many provinces are expected to develop their own oil and gas methane regulations and petition the federal government to drop federal requirements in exchange for the provincial requirements.  They will maintain that these provincial regulations will achieve equivalent reductions to the federal proposal. Federal Environment and Climate Change Minister Catherine McKenna needs to ensure that what the provinces do are in fact equivalent in terms of reductions, and not just politically expedient. If they let provinces get by with weaker regulations than the federal proposal, then the federal government is explicitly allowing provinces to stymie Canada’s efforts to reach its climate goals.

Reducing methane emissions from the oil and gas industry reduces waste, creates jobs, pollutes less, and ensures Canada keeps pace with the rest of the world. Additionally, these reductions are one of the most effective and affordable ways for Canada to deliver on its climate commitments. For these promising regulations to make a meaningful impact, Canada’s leaders will have to resist the oil and gas lobby, and strengthen the rules before they’re adopted. EDF looks forward to working with the government and other concerned stakeholders to ensure this happens.

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By Andrew Williams

The one fact that Pennsylvania lawmakers needed to hear today is this: Natural gas waste is up 28%.

And yet, the state senate held a hearing yesterday to discuss the impacts of natural gas development in the state, and not one environmental expert was on tap to speak. Consequently, senate leaders don’t have the full picture.

Here’s what state legislators need to know.

Industry-reported data made available this week by the Pennsylvania Department of Environmental Protection indicate that in the year ended 2015, emissions of methane – the main component of natural gas – were up over 28% although production grew by only 12%.

The amount of methane waste is even higher than what was found via a preliminary analysis of the data earlier this month. The simple truth is that while some companies are working to do the right thing and reduce emissions, the bulk of the oil and gas industry in Pennsylvania has a significant methane pollution problem.

Methane is the same product that these companies are aiming to sell. That means there is usable energy, and real dollars, literally going up into thin air. With emissions increasing nearly 30% without a congruent rise in production, it’s clear the industry isn’t doing an adequate job of controlling emissions and conserving Pennsylvania’s natural resources.

This is not only a problem for industry’s bottom line, it’s a problem that impacts millions of Pennsylvanians.

More than 1.5 million Pennsylvanians live within half a mile of an oil or gas facility, and methane isn’t the only emission that’s concerning. These facilities also emit other harmful pollutants that can trigger asthma attacks, increase smog, and exacerbate health problems.

The good news is that Pennsylvanians don’t have to choose between their environment and their economy. With the right policies in place, both can thrive. But that’s only possible if the state moves forward to address industry’s methane emissions.

Fortunately, technologies that can reduce nearly half of these emissions are some of the most affordable pollution controls in the energy industry. And many of the service and manufacturing companies that develop these technologies are headquartered in Pennsylvania, meaning there’s a huge opportunity for companies to affordably reduce their pollution as they grow good-paying jobs.

With emissions on a rapid rise, it’s clear that the state should step in and require pollution controls to be implemented statewide.

In January 2016, Governor Tom Wolf proposed a blueprint to reduce industry’s emissions. A year and a half later, there has been little action.

That’s due in no small part to a bill championed by many of the same senators in yesterday’s hearing that aims to prevent Pennsylvania from taking any action on methane that goes beyond federal efforts. That’s hugely problematic, and here’s why.

In April, the Environmental Protection Agency issued a 90-day stay on existing protections that would have cut methane pollution from new oil and gas facilities, and there is a possibility that the agency will rescind these protections altogether. This means that if Pennsylvania defers to the federal government for protections, well, they won’t be there. Tying Pennsylvania policies to whatever is happening in D.C. hardly serves the interest of Pennsylvania citizens and communities – instead, it’s a bouquet to industry.

Other major energy producing states, including: Colorado, Wyoming and Ohio, have been successful at crafting policies that require companies to use affordable and readily available technology to reduce emissions. And industry growth hasn’t been impacted – seven out of 10 gas companies surveyed in Colorado confirm that.

Since promising to reduce methane emissions, Pennsylvania has green-lighted nearly 2000 new drilling projects, yet zero new protections have been implemented.

With emissions increasing at an alarming rate, that has to change. We have to have a better balance. Pennsylvania’s elected leaders must be willing to put measures in place that can support Pennsylvania’s economy while protecting the health of our citizens and communities. The record clearly shows that both are possible.

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The Government of Canada announced draft regulations to curb air and climate pollution from the oil and gas industry, as a[…]

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By Erica Morehouse

Auction results from the May California-Quebec carbon auction showed increased demand after a California Court of Appeal upheld the legality of California’s auction design last month.

These auction results should send a clear message to legislators that California has a strong carbon market design that can weather legal challenges and the inevitable bumps of the political process.

They also indicate it’s high time to extend, adapt, and strengthen the cap-and-trade program as the backbone of California’s effort to meet its ambitious 2030 target – something the California legislature has an opportunity to do by June 15 in concert with the governor’s budget.

Results from the May 16 auction

• The auction offered more than 75 million current vintage allowances (available for 2017 or later compliance) and all of them sold at a price of $13.80, 23 cents above the minimum floor price. This is the first time the auction has cleared above the floor since November of 2015.
• Allowances held by the utilities, Quebec, and ARB sold with over $500 million expected for California’s Greenhouse Gas Reduction Fund (GGRF).
• Almost 10 million future allowances were offered that will not be available for use until 2020 or later; a little over 2 million of those allowances sold. This is significantly higher than the 600,000 that sold in February but future allowances tend to have the most variability in demand.

Demand increased significantly from February, but why?

1. The market has clearly reacted positively by increasing demand in the wake of the Court of Appeals ruling. The appeal to the California Supreme Court and uncertainty about cap-and-trade’s future after 2020 may still be impacting market behavior, however.

2. Regulated businesses need a certain number of allowances to cover their emissions. Demand for allowances is in part driven by this simple reality, and since businesses have been laying low the last few auctions, it makes sense they would need to buy allowances this quarter. Economist Chris Busch describes why these “market fundamentals” led him to predict that at least 50-65 million allowances would be sold in this auction.

3. The stabilizing forces built into California’s program prevent big price swings when the market reacts to new developments. We can see this through California’s private secondary market, which shows daily allowance prices, and acts as a kind of barometer for how and whether the market is reacting to particular events. For example, after the California Court of Appeal on April 6 upheld the legality of California’s auction design, prices on the secondary market went up by 54 cents. When the California state senate on May 1 introduced SB 775, which would have overhauled the current cap-and-trade program and eliminated the auction allowances after 2020, the market dipped by roughly 20 cents – but recovered May 10 after the bill did not come up for a vote as anticipated. This means price shifts have been very small – mostly less than one dollar.

What will happen in the auctions if the legislature extends the cap-and-trade program?

An extension of the cap-and-trade program would lead to more robust demand for allowances — leading to a rising allowance price that better reflects the cost of a ton of carbon pollution reductions, taking into account the 2030 target that was put into law last year. With the price likely rising above the floor, we would expect to see future auctions being fully subscribed — translating into significantly more revenue for the GGRF to invest in projects that reduce carbon pollution.

Some observers have painted a dire picture of allowance prices spiking overnight. But that’s not how we’ve seen carbon markets behave in the past — and there’s no reason to think it will happen now. Instead, we’d expect a gradual strengthening of the allowance price over time, as compliance entities weighed the current price of allowances against the anticipated cost of reducing emissions in the future as the cap becomes more ambitious.

What’s more, the system already has a number of design features in place to protect against such a surge in prices, including offsets, the ability to draw on allowances “banked” from previous years, and a reserve pool of allowances (the “allowance price containment reserve”) that would be released into the market if prices rise high enough.

The governor is pushing hard for a deal on cap and trade by the budget deadline of June 15, so I’m hopeful the next auction will give us much to celebrate.

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A new report from Environmental Defense Fund reveals key barriers to innovation in an important, but challenging class of chemistry – preservatives.[…]

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By Jack Pratt

Today, Environmental Defense Fund joined other groups in challenging a Food and Drug Administration (FDA) rule that allows chemical and food manufacturers to decide for themselves – in secret – what chemicals and food additives can be added to foods. The practice puts our health at risk and does not fulfill Congress’ requirement that FDA determine that chemical additives are safe before they can be used in food.

Americans would be shocked to learn that food companies routinely add novel chemicals to our food without first getting FDA approval. In doing so, the companies are exploiting a loophole exempting ingredients “Generally Recognized as Safe” (GRAS) from formal FDA review and approval.

Originally intended for ingredients like vinegar and olive oil, industry now abuses the GRAS loophole by bypassing FDA review and making safety determinations in secret. The alarming result: even FDA does not know what is in our food. In fact, FDA has no way to know what chemicals are actually being used in which food or in what quantities—even in baby food.

Last year, the FDA issued a final rule formalizing this outrageous practice. We described this decision as a lost opportunity for safer food additives when the decision was made. Today, EDF and our colleagues at the Center for Food Safety (CFS), Breast Cancer Prevention Partners, Center for Science in the Public Interest, and Environmental Working Group, represented by CFS and the environmental law firm Earthjustice, joined in filing suit against the FDA for unconstitutionally and illegally delegating that authority to self-interested food and chemical manufacturers.

It is disappointing that the groups were forced to take legal action. In addition to being a bad policy that doesn’t comply with law, or protect public health, the FDA is oddly out of touch with public sentiment. Just last week an industry funded survey showed overwhelming consumer concern about chemicals in food, including cancer causing chemicals, while showing diminished confidence in the food supply. This continues a trend that has been building for years. Food companies would be wise to take notice: adding secret chemicals without FDA scientific review to our food is no way to improve confidence in their products.

But with thousands of secret chemicals in our food, we can’t wait for industry or FDA to wise up. Today’s lawsuit seeks to force FDA to do what should be common sense—determine that food additives are safe before they can be added to our food.

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President Trump unveiled a budget proposal for Fiscal Year 2018 that would significantly set back coastal restoration and protection efforts[…]

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