Will Big Business Help Fight Trump’s Anti-Environment Agenda?

AP Photo/Elaine Thompson

Solar panels and a green roof are among the sustainably-built features of the new Google building on the company's campus Tuesday, February 16, 2016, in Kirkland, Washington. 

Environmentalists can be excused for feeling apocalyptic about Donald Trump’s presidency. Compared with Barack Obama, who championed the Paris Agreement, enacted the Clean Power Plan and preserved major swaths of open space, President-elect Donald Trump can come off as the planet’s grim reaper, ready to usher in a new era of dirty water, polluted air, and melting glaciers.

Trump’s cabinet selections make crystal clear that his anti-environment rhetoric as a candidate was no mere campaign swagger. To head the Environmental Protection Agency, he has tapped Oklahoma Attorney General Scott Pruitt, a man who has repeatedly sued the agency. For energy secretary, he’s picked Rick Perry, the former Texas governor who once vowed to eliminate that agency. For secretary of state, Trump has tapped ExxonMobil CEO Rex Tillerson. To put the icing on the cake, he wants to install Arctic oil drilling advocate Ryan Zinke, the House Republican from Montana, as interior secretary.

As League of Conservation Voters president Gene Karpinski has put it, the incoming administration looks to be “a polluter paradise that is completely at odds with public support for protecting our air, water, lands, and wildlife.”

But environmentalists may yet have a way to fight back. Though their public protests may fall on deaf ears as long as Trump is in the White House and Republicans control Congress, environmental activists may find more of an audience in corporate boardrooms. At a time when consumers are increasingly eager for green products, services, and energy sources, corporations are seeing the value of resource conservation as a long-term investment strategy, not just good PR or a grudging response to government regulations. And it’s not just Ben & Jerry’s these days that is taking earth stewardship, especially climate change, quite seriously; sustainability is baked into the structure of more and more Fortune 500 businesses. The imperatives of profit have never been so closely intertwined with those of our finite planet.

Take Trump’s pledge to bring back coal. In economic terms, that’s a campaign promise that looks destined to fizzle. Simply put, natural gas, a significantly cleaner fuel than coal, has become a more economically viable energy source. David Victor, an energy policy expert at the University of California, San Diego, says that while the price per unit of energy for natural gas and coal are roughly the same right now, natural gas enjoys a decided market advantage, because 21st century grid operators prefer its properties as a fuel source.

“Modern power plants need to be able to be turned on and off fairly quickly, but a coal plant is the exact opposite of that,” says Victor. “You need to keep a coal plant warm; the ramp-up for a coal plant from a cold start is many hours, if not longer. Gas plants are much more responsive.”

And the “clean coal” that Trump likes to reference? It’s an idea that sounds seductive, but that doesn’t do much to reduce the nation’s greenhouse gas emissions. Clean coal refers to the application of carbon capture and storage technologies to coal-fired power plants—a process that involves diverting carbon dioxide from the smokestack and sequestering it underground in natural geologic formations that prevent it from seeping back to the surface. In practice, this technology is outrageously expensive. The only power plant in the world that has made the numbers come even close to working—the Boundary Dam Power Station in Saskatchewan, Canada—has done so by pumping the carbon dioxide into nearby oil fields, where it has value as an aid for fossil fuel extraction—a process known as enhanced oil recovery. But that can hardly be called a clean technology. While the process itself apparently is not polluting, it produces no net gain in terms of reducing greenhouse gas emissions—the entire point of clean coal. Just storing the CO2 in the ground would be a net improvement. But if the only economically feasible use of carbon capture is to extract more oil, it’s a zero-sum game. That’s because any oil extracted releases enough emissions when it’s burned to cancel out the potential benefit.

Making truly clean coal a financially viable reality would require massive government incentives, whether in the form of tightened-up emission standards or a price on carbon—both approaches that run counter to Trump’s fossil fuel-friendly, roll-back-the-regulations ideology. The technology holds promise in places like China, where the coal industry is booming, and the political appetite exists for a nationwide carbon market. But in the U.S., clean coal is a non sequitur, both fiscally and environmentally, for the foreseeable future.

Even many of the coal company executives with whom Trump is trying to ingratiate himself agree that natural gas is America’s new energy king. “The basic economics of the power sector now favor gas, and that has come directly out of the hide of coal,” says Victor.

 

NOT THAT TRUMP HASN’T ALSO PROMISED to pump up domestic production of natural gas, which is by no means the holy grail of clean energy. It has about half the greenhouse gas emissions of coal, but the “fracking” technology used to extract much of the nation’s natural gas supply is fraught with environmental problems of its own, from air and water pollution to increased earthquakes and habitat destruction.

Nevertheless, some environmental advocates say natural gas offers a pragmatic alternative to dirtier fossil-fuel energy sources as a short-term bridge to buy time for wind and solar to scale up, given that the renewable energy industry is still in its infancy.

And scaling up they are. In 2015, renewable energy sources accounted for two-thirds of the new electricity generating capacity in the U.S.—3,500 times greater than the new coal capacity. Investment in renewables is spurred on by the provisions of the Clean Power Plan, clean energy incentives in more than 30 states, and a pair of federal tax credits, which were authorized—with bipartisan support in Congress—through 2020 and 2021. Even if Trump is successful in eviscerating these incentives, the clean-energy sector has enough legs at this point to continue expanding, albeit it a reduced rate. For example, the 2016 Annual Energy Outlook, a publication of the U.S. Energy Information Agency, forecast that without the Clean Power Plan in place the growth of wind and solar would drop from 7.5 percent per year to 6 percent per year. Without the federal tax credits, the forecasted growth rate is cut in half.

“The political coalition in favor of continued investment in renewables is much bigger and more powerful than [it] has been at any time in American history,” says Victor, who is one of the authors of an upcoming Brookings Institution report that will offer recommendations on energy policy to the Trump administration. “Trump himself can’t reverse the tax credits. The Republicans, as part of a tax bill, could undo that system of credits. But it’s not a simple left-right question—you have a number of red states in the middle of the country that are big wind producers, for example.”

Thanks to the combination of market dynamics and government incentives, many of the world’s largest corporations already have plenty of eggs in the clean energy basket. Google, the world biggest corporate energy consumer, announced last week that it will be powered entirely by wind and solar in 2017. “I didn’t think it would happen so fast … [but] we’ve seen prices come down precipitously, which has helped us ramp up,” one Google executive told Bloomberg.

Google is one of 83 major corporations that has publicly committed to operating with 100 percent renewable energy as part of the RE100 initiative, a joint project of the climate advocacy nonprofits The Climate Group and CDP; Apple, Walmart, and GM are all on board. Microsoft reached the 100 percent renewable energy milestone in 2014, and a majority of the other RE100 corporations are on track to do the same within a decade. The private-sector accounts for about half of the planet’s energy use, so having the biggest corporate trendsetters decide that renewable energy is a worthwhile investment tips the scales considerably.

Some of the world’s biggest transnational corporations, moreover, are even spending political capital on clean energy. During the Marrakesh climate talks, which unfolded rather quietly in the week of the U.S. presidential election last month, 365 companies signed a statement directed at the incoming administration, urging Trump to uphold the Paris climate agreement and embrace the global effort to dramatically reduce carbon emissions. Mars, Nike, General Mills, Hewlett Packard, Ikea, Intel, Kellogg, Monsanto, Dupont, Unilever, eBay, and Starbucks were among the largest and most influential companies represented.

Sue Reid, vice president of climate and energy programs for CERES, a nonprofit aimed at mobilizing the business community to take action on sustainability issues, and one of the groups behind the Marrakesh declaration, says that 10 years ago the idea that the private sector would lead the way on climate and other environmental issues would have seemed overly optimistic. But she is now fairly confident that, even if Trump does everything in his power to undermine the environmental movement, market forces will at least in part pick up the slack.

“The economic equation has evolved so much, particularly in terms of the traction that clean energy has gotten with private sector entities,” says Reid. “So there is some real staying power now irrespective of what happens in terms of federal policy.”

Not everyone agrees that private-sector environmentalism will offset the damage a Trump administration can do. Though the average global price of solar energy dropped 58 percent between 2010 and 2015, it still provides just 1 percent of global energy supply. And Reid says just 18 companies purchase 60 percent of the renewable energy produced in the U.S. today.

“We definitely need to move beyond that to the small and medium enterprises,” she says. “But part of getting to those price declines was the role of large companies making these commitments. It has allowed renewable energy developers to take those contracts to the bank and get cheaper financing. And that has had this beneficial snowball effect of driving down the cost.”

There is also the uncomfortable fact that the U.S., despite the efforts of the Obama administration, is not on track to meet its 2025 target of cutting emissions to one third of 2005 levels—nor are the signatories of the Paris Agreement on track to limit global warming to a maximum of 2 degrees Celsius. Which means the federal government needs to do more in coming years, not less.

David Festa, senior vice president for ecosystems programs at the Environmental Defense Fund, says he’s not fully convinced that the private sector will pick up where federal efforts lag under Trump, and will shepherd the environmental movement forward. “Optimistic is probably too strong a word,” says Festa. “It’s more like an absence of pessimism.”

But he says the EDF, which long ago migrated from a primarily “sue the bastards” approach to a strategy of “aligning with companies to get things done,” is a firm believer in harnessing market forces to achieve a sustainability agenda. In the 1990s, the organization was instrumental in persuading McDonald’s to do away with Styrofoam packaging, which snowballed into a successful global effort to curb ozone depletion. He sees a similar phenomenon taking hold today on environmental issues ranging from climate change to habitat loss.

“If you look at where some of the smartest and shrewdest business people are, where some of the most famous companies are, where the thought leaders are—including thought leaders on the right—they are looking at the need to be more resilient, the need to use our resources in a way that leaves more nature for future generations,” says Festa. “The next two years are going to be rough, no question. We are going to have to play a lot of defense. But if you step back and look at the longer time frame, the political pendulum will swing back to having productive conversations about the planet. In that light, I move from the absence of pessimism to cautious optimism.”

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