Dec 24, 2020 - Energy & Environment

States and companies are now hotbeds of climate action

Illustration of a map of the United States comprised of solar panels
Illustration: Annelise Capossela/Axios

In the four years since the U.S. federal government last paid serious attention to climate change, the problem has become a top priority across states and corporations.

Why it matters: Washington, D.C. isn't the only place, or even the most important place, where meaningful climate change action is likely to happen in the coming years.

Where it stands: President-elect Joe Biden will attempt to force some changes at the federal level, but he's also expected to lean on states to show America’s progress on the global stage. Meanwhile, companies’ rhetoric on the problem in recent years will now be put to a test.

The big picture: Numerous states, cities and companies have pledged aggressive climate change goals over the past several years. It’s a trend driven by a multitude of factors, including growing urgency of the problem, cheaper clean energy technologies and investors increasingly concerned about the financial repercussions of a warming world.

By the numbers:

  • Since 2018, nine states have enacted standards mandating electricity to eventually emit zero carbon dioxide, which represents more than 20% of U.S. electric sales, according to the Clean Air Task Force, an environmental group.
  • Since 2018, nearly 30 utilities have pledged new, aggressive carbon reduction goals. When combined with the above states, these goals cover more than 50% of all electricity emissions, according to the group.
  • A record number of companies — nearly 10,000 — disclosed their environmental footprints, including on climate change, according to a new report by CDP, a nonprofit focused on corporate disclosures. That’s a 70% increase since the Paris Climate Agreement in 2015 and 14% compared to last year.

Driving the news: The incoming Biden administration, led by international climate change envoy John Kerry, is expected to lean more heavily on state action, given the limitations of big policy at the federal level, to make commitments to the Paris Climate Agreement, according to several people familiar with the transition team’s thinking.

  • Action by states, cities and private business could cut U.S. emissions up to 37% by 2030 compared to 2005 levels, according to a 2019 report by a consortium of environmental groups and former state leaders.
  • That percentage could rise to nearly 50% if the federal government reengaged, the report said.

The intrigue: Since Biden announced his appointment, Kerry has also already highlighted the shift among businesses.

  • “Real business people, real leaders within the business world understand that this is an imperative,” Kerry said in a recent interview with NPR. “They also understand that there's money to be made in producing the products.”
  • A coalition of U.S. Chamber of Commerce member companies created in 2017 with six companies now has 60, according to Hugh Welsh, president of DSM North America, whose science-based business spans a lot of sectors, including climate and energy.
  • That effort helped spawn an internal task force at the Chamber that is asking its members about, among other topics, what a carbon tax would look like.
  • Welsh says the shift is due to changing membership.
  • “They [the Chamber] are beginning to see the future of its enterprise is less coal, natural gas and coal companies and more tech companies,” says Welsh, adding that tech companies support action on climate change.

Yes, but: Collaboration is far from guaranteed.

  • It’s politically easier for companies to speak positively about climate change when the threat of big policy is not imminent, which was the case under President Trump. Under Biden, companies, and especially oil and gas firms, will be expected to show whether they actually support tougher climate regulations.
  • Biden will also face pressure from liberals to target fossil-fuel companies in different ways, such as investigating organizations they have funded in the past that sowed doubt about climate change, Sen. Sheldon Whitehouse (D-R.I.) told Axios recently.

Go deeper: Big tech takes the climate change lead

Go deeper