Google’s Approach to Climate Action May Be More Defensible Than Amazon’s
In the race to combat climate change, two tech giants, Amazon and Google, offer contrasting approaches to reducing their carbon footprints. While Amazon proudly announced it had secured enough clean electricity to cover its global operations seven years ahead of schedule, and Google acknowledged a 13% rise in its corporate emissions due to the demands of AI, a closer look reveals that Google’s strategy may be more effective.
Both companies face significant challenges. The soaring energy needs of AI operations are a major contributor to the growing demands for electricity among tech giants, while the pressure to demonstrate progress towards ambitious sustainability goals can lead to short-sighted decision-making.
The Problem with Net-Zero Goals
The core problem is that the costs and complexities of net-zero emissions plans can create perverse incentives.
Companies can be driven to pursue the quickest, cheapest ways of cleaning up their pollution on paper, rather than the most reliable ways of reducing emissions in the real world. This often involves purchasing inexpensive carbon credits to offset ongoing pollution instead of making the harder choices to reduce their emissions at the source. These credits may involve supporting programs like tree planting or altering agricultural practices to reduce or remove carbon dioxide. Numerous studies have shown that these efforts often overstate the impact that they have on the climate.
Net-zero goals can also push companies to buy renewable energy credits (RECs), in order to support further generation of renewable electricity; however, the argument is that these projects may not contribute as much as believed. Experts are increasingly skeptical of RECs, arguing that projects would have been built anyway without this additional support. If a company’s purchase of such credits doesn’t bring about changes that reduce emissions in the atmosphere, it can’t balance out the company’s ongoing pollution.
Amazon’s Approach: A Focus on Quick Wins
Amazon relies on both carbon credits and RECs to meet its goals. The company claims that it has reduced its emissions by improving energy efficiency, purchasing more carbon-free power, and supporting renewable energy projects around the world. Amazon’s approach is built on “purchasing additional environmental attributes (such as renewable energy credits).” However, purchasing clean power is only a first step, and doesn’t address the fact that the sources may not exactly match with the times and places where Amazon consumes the power.
An Amazon fulfillment center, for instance, drawing electricity from a natural-gas power plant in the middle of the night, isn’t offset by the production of solar energy in the middle of the day.
There is argument over Amazon’s method. Amazon Employees for Climate Justice, a group of workers, maintains that a significant share of Amazon’s RECs aren’t driving development of new projects and furthermore, the group stressed that payments and projects aren’t generating electricity in the same locations and at the same times that Amazon is consuming power. The employee group estimates that 78% of Amazon’s US energy comes from nonrenewable sources and accuses the company of using “creative accounting.”
To its credit, Amazon is making real strides in reducing its waste and emissions. In addition, it’s lobbying US legislators to make it easier to permit electric transmission projects, funding more reliable forms of carbon removal, and working to diversify its mix of electricity sources.
The company has adopted what’s known as a “carbon matching” approach, stressing that it wants to be sure the emissions reduced through its investments in renewables equal or exceed the emissions it continues to produce. However, a recent study by Princeton researchers found a “minimal impact” on long-term power system emissions, because it rarely helps get projects built or clean energy generated where those things wouldn’t have happened anyway.
Google’s Shift Towards More Defensible Practices
Google, while facing its own challenges, is taking steps in a potentially more effective direction, according to its recent sustainability report. The company is no longer buying carbon credits that purport to prevent emissions, and it has distanced itself from claims of achieving carbon neutrality years ago.
Instead, Google is focusing on accelerating a range of carbon solutions and partnerships, aiming for its net-zero goal while simultaneously contributing to broader solutions to mitigate climate change.
This includes funding the development of more expensive but potentially more reliable ways of removing greenhouse gases from the atmosphere through methods like direct air capture. Google pledged $200 million to Frontier.
The 24/7 Carbon-Free Energy Approach
Google has also moved towards purchasing or supporting the generation of clean power in the areas where it operates and across every hour that it consumes electricity—a strategy known as 24/7 carbon-free energy. The goal is to stimulate greater development of carbon-free energy sources that can run at all hours of the day.
More than 150 organizations and governments have signed the 24/7 Carbon-Free Energy Compact. This trend is more expensive than RECs, but incentivizes innovation and development of cleaner sources. In Google’s case, this approach has redirected the company to support more renewable projects in its operating areas and invest in more energy storage projects.
The Impact of AI Energy Consumption
As energy consumption for AI skyrockets, major data center companies like Google and Amazon are pressured to balance AI-driven energy use with their climate goals. One of the major changes should be to procure more clean energy.
“Reduce your emissions; that’s it,” says Jonathan Koomey, an independent researcher studying the energy demands of computing. “We need actual, real, meaningful emissions reductions, not trading around credits that have, at best, an ambiguous effect.”
Google is investing in technology advances to reduce climate pollution across sectors.
The Contribution Model: A New Approach
To address these challenges, researchers are suggesting a different model, known as the “contribution model.” Companies should focus on directly cutting their emissions as much as possible, and then dedicate a percentage of their revenue or set a defensible carbon price to projects to achieve the maximum climate benefit. This frees companies to focus on the quality of projects they are funding and could “replace this race to the bottom with a race to the top.”
This approach may be subject to abuse without safeguards, and not all companies may adopt it, which requires a move away from the goal of achieving net-zero emissions. There’s less risk of accusations of greenwashing.
