Achieving net-zero carbon emissions by midcentury will require an unprecedented public-private partnership, a transparent carbon offset market and direct air capture, said the founders of a new corporate alliance organized to deal with the causes of climate change.
“When we think about the challenge of removing carbon from the American way of life, we must re-imagine what our obligations are, how we can work with government,” Southern Co. CEO Tom Fanning said in remarks announcing the creation of the Net Zero Business Alliance on Wednesday. “Think back to the missionary zeal when we approached the first landing on the moon. These [carbon] issues are that important. These are things we have to do hand-in-glove with the government.”
In addition to Fanning, the founding members include United Airlines CEO Scott Kirby; John Tyson, chief sustainability officer of Tyson Foods; Weyerhaeuser CFO Russell Hagen; and Occidental Petroleum CEO Vicki Hollub, who was unable to participate in the kickoff session. The group will be expanded to include additional industry sectors in the coming weeks, according to the D.C.-based Bipartisan Policy Center, which organized it.
Fanning used the session to announce that Southern, which set an intermediate goal of 50% carbon emissions reductions from 2007 levels by 2030, met the target last year.
“So, without a forcing mechanism we’ve beat it by 10 years. Now 2020 was an unusual year,” he said referring to the economic slowdown resulting from the coronavirus pandemic. “We get that. But here’s the important point: The entrepreneurial spirit of America, combined with the public policy needed to accomplish big things has [created] an opportunity to achieve these kinds of results in a comprehensive way. And we have to do this not [only] in the silo of energy but in working with my brothers and sisters here in broader industries.”
BPC President Jason Grumet underscored the gravity of the carbon issue by noting that “the scale of this challenge is profoundly and dramatically underappreciated.”
“Solving climate change is going to place a tremendous burden on shareholders, on customers and ultimately on taxpayers,” Grumet said. “The scale of this challenge is a profound logistical issue, and the folks that we know have the capacity to make the kind of changes in the extremely narrow time frame available are the companies … we are working with.”
Though managing significantly different industries, Fanning, Kirby and Hagen believe that to reach the kind of carbon reductions climate scientists are calling for, industry will have to capture carbon dioxide directly from the air and sequester it underground.
Southern has partnered with the U.S. Department of Energy to manage the National Carbon Capture Center in Alabama. The center’s research includes direct air capture.
United has partnered with Occidental on a direct air capture project. Occidental intends to capture the CO2 at well fields and use it to flush out oil and gas from old wells, leaving the carbon underground. The industry has used CO2 for years in old well fields that have lost pressure. The difficulty has been to make certain the carbon does not make its way back to the surface.
Without direct carbon capture, significant reductions to achieve net zero are unlikely, Kirby said. “The reality is we emit 4,000 times the amount of carbon emissions than we did in the pre-industrial era. We cannot plant 4,000 times as many trees.”
Weyerhaeuser grows trees on 11 million acres of land in the United States and 14 million acres in Canada. But Hagen agreed that forestation won’t by itself solve the carbon problem.
“We need to combine all of these solutions. It’s an enormous problem. We do need to continue with the technology to capture carbon and to work on emission reductions,” Hagen said.
He said the development of mature carbon credit markets for long-term sequestration to deal with climate change is well underway.
“We are seeing the emergence of a lot of different stakeholders. Investors are demanding a response. It is really going to be critical that we as companies have a transparent view of the actions we are taking to address not only our shareholders but the broader stakeholder group to begin really driving toward a net-zero solution,” he said.
Markets trading carbon credits are demanding credits that lock up carbon in standing timber for up to 100 years, he said. “As we think about how we are going to engage in this … we have to bring a high standard so our brand, our credibility, stands behind whatever carbon credits we may bring to market.”
Tyson added that his company has been looking at carbon sequestration in farmland. He agreed that carbon credits and carbon markets are beginning to proliferate but said they pose a risk. “We are not yet sure of the science,” he said of carbon sequestration with agriculture. “Demand [for carbon credits] far outstrips the supply of high-quality credits.”
Kirby said climate change cannot be addressed without being honest about the difficulties. “The reality is that batteries will never have energy density to fly long haul aircraft with a lot of people on board. Even hydrogen, which has higher energy density, requires three times the weight as jet fuel,” he said. “There are going to be parts of the economy where we are still emitting carbon.”
He said United’s “100% green” climate plan does not include traditional carbon offsets. “I’ve talked to enough CEOs who just want to check the box. Write a check once a year and [say] `I did my part on carbon.’ We are not going to solve the problem” through such methods, he said.
“I challenge anyone to go up and look at some of these entities that provide carbon offsets to companies to find out what their projects are. It is almost impossible. … I know Weyerhaeuser is doing great things, and others are doing things that are real. But a lot of [purported carbon offset programs] are simply not real.
“At United, we know we’re still going to be emitting carbon into the atmosphere, and when we say ‘100% green,’ we really mean every molecule of carbon dioxide that comes out the back [of a plane] is a molecule that gets sequestered underground.”