At SB's third annual #NewMetrics Conference last September, the need for next-generation sustainability goals — which measure progress toward real-world goal-lines such as carbon budgets, water tables, and living wages — emerged as a key theme. To dig deeper, #NewMetrics channel co-curator Bill Baue discussed this question of “endzone” goals with prominent voices in the field, including Andrew Winston, author of The Big Pivot; GE’s Gretchen Hancock; Bob Willard and GISR's Allen White.
In this latest installment of the #SustyGoals series, Baue speaks with Stephen Harper, Global Director of Environment and Energy Policy at Intel, about the tech giant’s new science-based climate policy, released last month.
Bill Baue: What prompted Intel to create this new climate policy and to tie it so closely to the science?
Stephen Harper: We’ve had several iterations of climate policy statements over time and I realized, to my chagrin, that the most recent one was 6 or 7 years old. So we decided to update it to bring it into the 21st century. We do a lot of consultations and engagements with socially responsible investment groups and NGOs in the energy efficiency, climate, and environmental space generally. A clear message from them is for companies to have a climate policy based upon the science, to strongly support the validity of the science, given that there continues to be a lot of misinformation out there.
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What we stated about the science in the document got strengthened over time as a result of us reaching out to 5 or 6 NGOs to get their input on earlier drafts. One of the things we heard from them was where we had perhaps not stated the science as clearly or strongly as possible. So the draft went through some evolution over time from strong to stronger on that particular element.
Baue: Your policy calls climate change a classic economic externality, and the solution is to find ways to “price carbon and the damaging climatic impacts of greenhouse gases.” How do you see setting the price for the carbon being linked to what the science says needs to happen? If there is just a price, is that enough of a signal to the marketplace? Or does that price itself need to be linked to the science?
I think a great theoretical question is “what is the price?” That’s true not just of carbon in the climate change context, but it’s true of pretty much any environmental problem because almost all environmental problems are externality issues. I don’t think anyone knows what the “right” price is. The key is to make it expensive enough that people’s behavior changes. Part of the problem in the European trading system is that, both directly and indirectly, they set the price for carbon too low and as a result very little behavior has changed.
Baue: What I’m hearing you say is making it based on science would be an inexact science because it is a dynamic interplay with the marketplace.
Harper: Right. Determining the “right price” is inexact in a number of ways. We don’t know exactly how far we have to reduce our emissions to get to what the right atmospheric concentration or the right trajectory of what carbon emissions should be. In part, that’s something we can never know because that’s a political judgment. There is no bright line that says this is good and that is bad. It is a decision about risk.
There is a lot of uncertainty in the science about if you reduce concentrations to that level, what does that mean in terms of global temperatures and extreme weather events, etc... You start with inexactitude in the science, the fact that the “right” outcome is to a significant degree a political decision, and then you’ve got the question of, once you decide what the goal is, what is the right price to get you to that goal? There’s imprecision involved there, as well.
One of the nice things about cap and trade as opposed to carbon tax is that you set the goal. You can screw it up like the Europeans have. But, assuming you don’t run into problems like that, you can decide as a society that we want to have our total level emissions of carbon, or CO2 equivalent, in the following years to be X and we’re going to ratchet that down by 5 percent every year. You can set up a system that will guarantee that result. As opposed to a carbon tax where you say this is the level we want to get to and we will start with a tax at this per unit of emission and adjust based on experience.
Baue: What’s displayed in the policy is that very trajectory, where you represent what the science is telling us around the emissions pathway that needs to be followed, and how Intel’s emissions line up with that historically. You’ve gone from being over the curve to being under the curve — you’re within the threshold, so to speak. How are you planning to stay within that trajectory, in line with the scientific pathway? I know you have a 10 percent reduction per processor. How does that translate to absolute emissions?
Harper: Let me back up. Our direct emissions really have two components. There is a little bit of CO2 emitted from our boilers on site and there are emissions associated with our use of fluorinated gases. You can’t make semiconducters without fluorinated gases. The fluorine atom is very stable and that stability is very useful when you are making products that are as small in size and exact in manufacturing as our products are. Everyone in our industry depends on fluorinated gases. Unfortunately, the stability of the fluorine atom that makes it useful for our purposes is what makes it problematic environmentally. They live forever, which is why a lot of the fluorinated gases have very high GWPs.
We’re in a situation that’s very different from other industries where their emissions are waste. Our emissions are associated with the use of these gases in the production process. We have dramatically reduced our total emissions of fluorinated gases, both Intel and the industry, under a voluntary agreement with the EPA. At one point, we reduced our total emissions by over 50 percent as a company and the industry was well ahead of its 10 percent reduction commitment. That goal ended in 2012 and the industry was ahead of it. We’re doing even better.
We’re also not a big part of the overall emissions picture. The entire semiconductor industry is a small fraction of a fraction of 1 percent of the whole US Greenhouse Gas Inventory. What has driven us is a fear that people will ban the use of fluorinated gases. You’ll see in the policy statement a lot of emphasis should be on emissions, not use. That’s where we’ve put our focus. We try to substitute lower GWP gases for higher GWP gases, and to be more efficient in recycling and reuse, and where it is needed, develop destruction technologies that turn those gases into other things that are less harmful.
Part 2 ...