One of the most important trends in climate change isn’t anything you heard on the campaign trail, but instead something as basic as data — and the technological exploitation of it.
The big picture: Companies have been disclosing more data on greenhouse gas emissions since the 2015 Paris Agreement, and a new trend cropping up uses that to foster competition for greener energy. Expect far more of this under President-elect Biden.
Why it matters: Data usage is the most important foundation for any effort to reduce emissions, whether through government policy or private-sector efforts.
- “One of the basic theories of management practices is that you can’t manage what you can’t measure,” says Steven Rothstein, an expert at Ceres, a nonprofit urging more sustainable investing.
- “If you don’t know what your emissions are, then how do you measure them?”
The intrigue: A recent diplomatic rebuff illustrate these trends.
- After the French government last fall blocked a $7 billion deal to import U.S. natural gas over concerns about that fuel's role in causing climate change, a little-known company called Xpansiv got an influx of worried calls from energy companies that wanted its services.
- The firm uses data and technology to enable companies to buy and sell products, including natural gas, based on how clean they are.
- “Responsible natural gas producers have been trying to figure out a way to get paid for the good stuff they’re doing,” Xpansiv president John Melby says.
Between the lines: The French government’s move and Xpansiv’s growing business are real-world examples of what I called the game of “crude musical chairs” in a 2019 column.
- The world’s oil, natural gas and coal producers are, metaphorically speaking, encircling a bunch of chairs. As the world tightens its grip on heat-trapping emissions, the use of these fuels drops — and so does the number of chairs.
Catch up fast: Since I wrote that column, China, Europe, America (under Biden) and elsewhere have committed to goals that would slash emissions by 2050. It’s the strongest signal yet that nations are getting serious about taking out more chairs more quickly.
What they’re saying: “There’s growing competition around how you can be more green,” says Brian Stafford, CEO of Diligent, a software firm that helps companies navigate governance issues, including environmental ones.
What’s next: Xpansiv is announcing today a partnership with Validere, an oil and gas data platform, which will allow Xpansiv’s technology to scale from mostly a pilot phase.
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