We must fundamentally rethink “net-zero” climate plans. Here are six ways how.

Research and development funding

There are all kinds of areas where the world has yet to figure out how to effectively, affordably, and quickly cut emissions, including aviation, shipping, fertilizer, livestock, steel and cement.

So companies looking to accelerate their path to zero emissions and maximize their impact on climate change should also fund needed early-stage research, development and expansion efforts, whether through their own R&D departments, external research grants, or investments in start-ups.

Some companies do this in different ways. In 2020, for example, Amazon created $2 billion Climate Pledge Fund To develop technologies and services that can help them and other companies achieve climate goals. It has invested in companies like Infinium, which is developing renewable electric fuels for cleaning aviation; Beta Technologies, maker of electric vertical take-off and landing aircraft; and CMC Machinery, which produces custom boxes for specific products, reducing waste and the need for plastic air cushions.

Each of these investments can help Amazon reduce its materials and emissions as it moves huge amounts of products around the world.

Microsoft is running a similar project effort with a billion dollars Climate Innovation Fund.

Going beyond renewable energy credits

Electricity is one of the largest sources of emissions for most companies. But companies generally do not clean up their energy consumption by directly acquiring carbon-neutral electricity, since most of them have a limited impact on the mix of sources on their local grid.

As an alternative, many simply buy renewable energy credits that provide additional revenue for wind, solar, geothermal, or other clean energy projects. The basic idea is that the additional support helps build projects, so carbon-free electricity is generated that wouldn’t have happened otherwise. Thus, the credits can be calculated against the share of the total energy consumption of the unclean company.

A single wind turbine rotates next to the exhaust of a coal-fired industrial plant

MS TECH | Karsten Cole / Getty Images

But while these credits may be useful in various ways, particularly by signaling to utilities that there is a growing demand for clean electricity, it has become difficult to claim that they effectively clean up the energy consumption of a company that does not actually draw electricity from the plants in question. Such projects often do not run on the same networks, or are able to produce electricity for all the hours the companies consume.

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