Climate Change: What’s Next With Regulation and Renewable Energy

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Climate Change: What’s Next With Regulation and Renewable Energy

Podcast In the Public Interest

Episode Guests

  • Otum_Peggy Peggy Otum

    Partner

    Co-Chair, Energy, Environment and Natural Resources Practice

    +1 628 235 1161
  • Farber-Daniel

    Daniel Farber

    Professor, UC Berkeley’s Center for Law, Energy & the Environment

  • Hanna-Mars

    Marsden Hanna

    Head of Sustainability and Climate Policy, Google

In This Episode

As President Biden’s first executive orders demonstrate, climate change is now at the heart of the federal environmental policy agenda. Outside of government, there’s a growing momentum among private companies to focus on and invest in renewable energy. In this episode, WilmerHale podcast co-host and Partner John Walsh welcomes Partner Peggy Otum, who leads a discussion with special guests Professor Daniel Farber and Marsden Hanna on climate change and renewable energy. 

Otum is the co-chair of WilmerHale’s Energy, Environment and Natural Resources Practice. Her practice focuses on representing corporate clients in a variety of environmental regulatory compliance, litigation and transactional matters. Farber is a professor at UC Berkeley’s Center for Law, Energy & the Environment, and Hanna is the Head of Sustainability and Climate Policy at Google. 

Farber and Hanna discuss how the Biden Administration is reinvigorating efforts around climate change regulation, the growing commitment from private companies like Google to counteract climate change (and why they’re doing it), the role of technology in addressing climate change, and what they expect to see from the Biden Administration in the march toward sustainability. 

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    Speakers: John Walsh, Peggy Otum, Daniel Farber and Marsden Hanna

    Walsh: As President Biden’s first executive orders demonstrate, climate change is now at the heart of federal environmental policy agenda. But regardless of who sits in the White House, the private sector has focused on this very important topic for years. For example, major companies implementing climate pledges such as Google’s announcement that it will run on carbon-free energy by 2030. Today I’m joined by my fellow WilmerHale Partner Peggy Otum, Co-Chair of our Energy, Environment and Natural Resources Practice. For over 16 years Peggy has focused on complex environmental litigation and regulatory compliance matters spanning really the entire country. Peggy, Professor Farber and Mr. Hanna work at the forefront of climate change issues and we hope you’ll enjoy their dynamic discussion on this very important and timely topic. And with that, Peggy, I’m going to hand it over to you.

    Otum: Hi, I’m Peggy Otum. I’m the Co-Chair of WilmerHale’s Energy, Environment and Natural Resources group, and I’m delighted to welcome Mars Hannah and Professor Dan Farber today to discuss a topic that is, without a doubt, one of the most critical policy issues of the day  climate regulation. Let me begin by introducing our guests. Mars Hanna is the head of Sustainability and Climate Policy for Google. Prior to joining Google, Mars was a director at a company that provides software for the utility sector. Mars has also worked on climate and energy policy in the government, having served in both the State Department and the Department of Energy. Professor Dan Farber is the Sho Sato Professor of Law at UC Berkeley and the Director of Berkeley Center for Law, Energy & the Environment. Dan was a Supreme Court Clerk for Justice John Paul Stevens, and has devoted his distinguished legal career to teaching and writing about environmental and constitutional law. Welcome to you both. Professor Farber, let’s begin with you. Climate change was at the core of President Biden’s campaign platform, the Biden Plan, which is not to be confused with the Green New Deal. And now, climate is the centerpiece of President Biden’s first set of executive orders, which aim to tackle climate change through a whole of government approach, with the goal of achieving net zero greenhouse gas emissions by 2050, and carbon-free electricity by 2035. To achieve these goals, can you tell us what roles you see Congress playing, the federal agencies that would be part of this whole of government approach, and finally what role do you see individual states playing?

    Farber: Hi. It’s great to have the chance to talk with you today. In terms of legislation, Congress had plans for really big climate legislation through Congress, but they lost seats in the House and they have a razor thin majority in the Senate. Really, it could not be any slimmer. And that means the legislative plans are going to have to be scaled down. For example, the Clean Future Act, which the House Energy Committee is drafting, is a lot more moderate than the Green New Deal. But still it will be very, very tough to get through the Senate. I think probably the most promising option is a Green Infrastructure Bill. It wouldn’t impose regulations, but it would really accelerate the adoption of renewables, battery storage, new transmission and other new technologies. So that would be a really big deal. That would move us forward a lot. Other legislation, I think, is going to be more small scale. I could see legislation dealing with a transmission system which we really need, for example, and at the agency level, our Center actually put together a roadmap for Biden. Trump rolled back well over 100 of Obama’s environmental regulations, many of them on climate change, and one of Biden’s first orders of business is going to be to start undoing those, which has already begun. But it’s going to take a long time to work through the list. We tried to set some priorities that we thought might be helpful to the Administration. I think at least on some of these matters, we’re going to see ramping up of regulation, especially on fuel efficiency standards for vehicles and methane leaks from the oil and gas industry. Methane’s a very potent greenhouse gas, so that’s a big deal. I think you also asked about what was going on outside of Washington, and, I think, we’re going to see states continuing to move ahead aggressively. California is charging ahead. I think New York will be. A number of other states have set ambitious targets and, I think, they’re going to keep going forward. I think, knowing that the federal government has their backs will encourage more state activity. And, finally, coal will continue to decline, even as it did under Trump, and that’s good news both for addressing climate change and for public health.

    Otum: Turning to you, Mars, can you tell us how the Biden Administration’s climate focus impacts what Google is doing in the sustainability and climate space.

    Hanna: Certainly, well first of all, let me say thank you so much, Peggy and John, for the opportunity to chat with you today. This is an issue we care deeply about. Sustainability and climate action has been a core value for us since our founding in 1998. We’ve been carbon neutral for our operations since 2007. We’ve matched 100 percent of our electricity consumption with renewable energy every year since 2017. And now, we’re working to build solutions across our operations, with our partners, and for our users that are going to help enable everyone, everywhere to take action on climate. Policy is one of the most critical areas of work for us and for solving climate change, and we’ve long been engaged in advocating for policy solutions that are going to help accelerate a clean energy future. For example, we were very supportive of the Clean Power Plan under the Obama Administration, which sought to regulate CO2 emissions, greenhouse gas emissions from power plants under the authority of the Clean Air Act. We’ve been active in helping found the Renewable Energy Buyer’s Alliance, which is a coalition that brings together over 300 energy buyers, developers, and service providers to advocate for market reforms that are going to unlock access for thousands of companies to be able to purchase clean energy for their operations. And we’ve worked with state regulators, utilities and state legislatures and other electricity customers in a number of states around the country, including Georgia, North Carolina, Minnesota, Nevada, and beyond to help establish programs for customers in these states to be able to purchase clean energy for their operations. So turning to the Biden Administration, I think we are very encouraged by the Administration’s ambitious approach to tackle climate and their central focus on this issue, as you said, across all areas of the federal government. In particular, we’re excited about the efforts to create 100 percent clean electricity system. We should be very clear that this is an extremely ambitious goal, reaching 100 percent clean energy by the timeline the Administration seeks requires accelerating the pace of carbon free technology deployment by four times compared to the historic rate. So, to achieve this kind of acceleration, we see very important roles for policies like a National Clean Energy standard that are going to help put goalposts and timelines in place for markets, for buyers, for utilities and other load-serving entities to rapidly decarbonize in the time frame that’s needed. At the same time, we know that ensuring this transition is cost-effective is a paramount goal and ensuring that the burden is limited on Americans and on energy customers. We found that one of the most effective tools for ensuring cost effectiveness is market competition. And so, to that end, we are very supportive of expanding and improving wholesale electricity markets that can help create an open platform for energy technologies to compete, and for customers to benefit from lower energy costs. And lastly, we know that infrastructure investment is essential. Dan spoke about this a moment ago, and we couldn’t agree more that investing in transmission of expansion and other cost-effective measures that are going to bring clean energy from the resource-rich areas of the country to load centers is very important. So, we look forward to engaging with all of these issues across the federal government.

    Otum: Thanks, Mars. Google is, obviously, deeply committed to climate issues and has long had a climate policy seeking to reduce its carbon footprint. Can you help our audience understand where that commitment comes from?  We’re increasingly seeing tech companies and other companies in non-extractive sectors make public pledges to make their operations carbon neutral. In fact, just today, FedEx announced its commitment to carbon neutral operations by 2040. Where does that motivation come from, particularly given that many people don’t see tech companies as major contributors to the climate problem.

    Hanna: So, this has been an issue that we’ve been active on for a very long time, and it’s something that goes to our values as a company and what we care about, and who we want to be. It’s something that our founders, Larry and Sergey, are personally passionate about. Our CEO, Sundar Pichai, and many of our executives, including Ruth Porat, our CFO, and others know that this is a critical issue that we need to be engaged in supporting. Beyond that, we also see this as a tremendous business opportunity and an important area for demonstrating financial value and shareholder and stakeholder value. We know that in a growing number of markets around the world, clean energy is the cheapest resource that is available on the grid. So, if we are able to supply our data centers with zero carbon energy resources, we can reduce our costs, we can hedge against steel price volatility and a number of other financial benefits that come from supplying your facilities with carbon-free resources. Beyond that, we know that technologies, like artificial intelligence, and machine learning have great potential to help industries across the world decarbonize through applications that would help them increase energy efficiency. We know there’s a lot of financial value for companies and stakeholders across the chain, and then finally, we know this is an issue that’s important to our users and important to folks that interact with Google, and we know that building core products and building sustainability into what we do is something that’s important to them, and we want to be responsive to user requests.

    Otum: Great. Thanks, Mars. Professor Farber, you’ve heard about Google’s investments in addressing climate and we know that, in recent years, companies like Google and Amazon and Walmart have been increasingly investing in renewable energy development, and working with states to increase support for alternative energy development. We know that this is an area that you’ve studied closely. Can you tell us what your research shows, specifically, what overall impact can the private sector have on renewable energy development?

    Farber: That’s a great question. Historically, the industry position on environmental matters has often been to resist regulation and sort of drag their feet, and what we’ve seen with climate change for a number of major companies, not by any means limited just to the ones that we’ve talked about so far, we’ve really seen companies taking the initiative, and not waiting for the federal government to tell them what to do. In fact, really moving beyond what we would expect in the way of simply reducing their own emissions, and in some cases, for example, working with their suppliers to reduce emissions higher up in the supply chain. It’s really hard to put a number to this. There’s no central recording or monitoring of corporate actions, so I don’t know that I could give you like a figure in terms of how many tons a year of carbon have been saved, but it’s clearly quite substantial. And, it’s not just limited to the sort of blue state-oriented firms like the tech companies; it includes Walmart, which you mentioned, but also a whole slew of other companies across the country, of all different sizes. And I think this has been really important because one of the big issues that we are facing with renewable energy is scaling up, and the more that we can accelerate the scaling up, the more it becomes self-sustaining because that drives down costs that leads to new infrastructure, and so on. It also leads to technological improvements. Google and some of the other tech companies have done a lot of work in terms of their own data centers using artificial intelligence to reduce cooling costs, and a lot of that technology can be applied to other industries and to major commercial buildings in a way that should enable us to save a lot of electricity and a lot of carbon emissions going forward.

    Otum: Thank you. And, Mars, can you tell us what Google has been doing in the renewable space over the past few years, and what the company’s goals are when it comes to renewable energy use and investment?

    Hanna: Certainly. So, this is an issue we’ve been active on for a long time. We’ve been carbon neutral since 2007. We achieved that at the time through the purchase of emissions offsets, and we’re very proud of our efforts to be the first major company in 2007 to be 100 percent carbon neutral for our operations, and this was a big step. We were also very clear-eyed at the time that offset purchases are not a substitute for operating sustainably over the long term, and we knew that we would need to find another way to run our company on clean energy. So, we began purchasing renewable energy in 2010. We did our first power purchase agreement for 114 megawatts of wind in Iowa, and we helped with this process and over the coming years scale up the corporate power purchase agreement, which has catalyzed something of a movement in corporate action on renewables and, I think, over the last five years something like 32 gigawatts of renewable energy have been installed in the United States as a result of corporates who are out there seeking to buy renewable energy for their facilities. So, we scaled up our work in this area and by 2017, we were very excited to announce that we had achieved a 100 percent renewable energy match for the first time. That’s an achievement we have maintained every year since. We want to be very clear what that means. This is a global and an annual goal for us. So, over the course of a year, we’re purchasing the same quantity of renewable energy somewhere in the world, as we are consuming at all of our facilities everywhere in the world. It doesn’t mean that a renewable energy is supplied to our facilities in every hour, and it doesn’t necessarily mean that’s matched in every location. What it does mean is in some hours we’re oversupplied in some regions, in other hours in other locations, we’re undersupplied. But over the course of the year, those match out 100 percent. So, we’re very proud of that, but we also know that to truly address climate change, we need to go much further than this. We need to get grids themselves to zero carbon, and that requires operating within the physical structure of electricity grids, which is to match supply and demand in real time. So, we’re excited to announce last September that we’ve now set a goal to power our company with a carbon-free energy resource in every hour of every day at every location by 2030. So, this is a much more ambitious task for us, and one we’re very excited about. We know that getting to 24/7 carbon-free energy will require a suite of new approaches that will include transactions, new technologies, and policy. So, thinking through each of these on the transaction side, we know that we’re going to need to be getting more creative, and doing things like blending wind and solar together, and looking for other ways to bring other users and other buyers into a transaction. On the technology front, we’re opening up the aperture to a much broader set of carbon-free energy technologies so we know that things like long duration energy storage will be important, and we’re looking into other opportunities around enhanced geothermal, advanced nuclear, carbon cap and storage and other energy resources that are zero carbon. And lastly, on the policy front, we know that supporting the development and deployment of the next generation of carbon-free technologies is going to be important, so we’re leaning into that effort as well as efforts to expand markets and empower customers to take control of their energy use.

    Otum: You talked about what’s motivating Google to really pursue these very ambitious climate goals. I’m hoping you can expand a little bit about that because we’re seeing private companies focus increasingly on legal and business risks presented by climate change and, I think, that’s due, in part, to investor demands for voluntary climate risk disclosures and customers becoming more interested and more activist in terms of how companies are looking at climate and other environmental, social and corporate governance risks. Can you tell us how Google looks at this and what role, if any, outside stakeholders play with respect to Google’s actions in the climate space?

    Hanna: Certainly. I think, for us, the motivation for action really comes from inside, from the values, as I mentioned, of who we want to be as a company, and the importance of taking action on this issue. That’s why we’re now in our third decade of action. So, it really goes back to our values and to important business opportunities and business sense, at the end of the day. And so, it’s something that we will continue to be active on, regardless of the policy environment that we operate in. That’s something that we’re very passionate about.

    Otum: Professor Farber, what’s your view on how stakeholder climate activism can affect corporate decision-making? What role do stakeholders have in shaping climate policies?

    Farber: I think the kind of internal motivation that Mars is talking about is really important at some companies, and probably plays a role in a lot of other companies. However, not all companies are like Google maybe in the way they’re thinking about this problem and there are a lot of companies that, if anything, have been resistant to change their business models, rely on fossil fuels in one way or another or just sort of built into their assumptions about what the future’s going to look like. And, I think, for those other companies, the roles of stakeholders like investors, employees and consumers has been really important. You can see that, for example, even with the oil industry where investment managers, like Flagstone and institutional investors have really pushed the industry to start revealing more risks, and also to start thinking about what the industry’s future is going to look like. From the point of view of investors, it’s not just a matter of investing in things that you approve of, it’s a matter of whether companies really have a business model that’s going to survive and thrive in upcoming years. So, on that basis, I think, we’re going to see a lot of activity spreading through more sectors of the economy. Some of what we’re seeing, in response to that, is just corporate window dressing, PR, but we’re also seeing some real rethinking of strategies, even in fossil fuel companies like BP, and we’re certainly seeing a lot of utilities even in red states where they’re not under pressure at all from regulators. But they’re starting to think about what their future is going to look like as the energy system is transformed. So, I think all of that’s very positive. And I’m hopeful that that trend is going to increase.

    Otum: As part of that trend, technology has a role to play. Mars, we know that Google is constantly innovating in product development. I’m wondering if you can tell us how technology factors in here, and if there are technical applications that industries can use to address greenhouse gas emissions, and address their other climate impacts?’

    Hanna: Certainly. So, technology is the secret sauce that makes Google work, and it’s something we are committed to deploying in the climate space. We know that no company alone can solve this issue, and it’s important for us to be building products and services and technologies that can help industries and users take action on climate change. We’re doing this in a couple of different ways. With our partners, we are building solutions that are going to help cities, in particular, and city policymakers develop low carbon action plans. So, we have a platform called the Environmental Insights Explorer that brings together aggregated and anonymized data from Google Maps about transportation emissions, building emissions, solar rooftop potential and other environmental datasets in the city. And, we can surface those at a municipal level, and use that as a baseline for city policymakers to set mitigation goals, set so rooftop installation goals and design policy interventions using high-quality on the ground data. So, this tool is available in 3,000 cities now, and we’ve made a commitment to work with 500 cities around the world to utilize this to reduce a gigaton of carbon by 2030, which, for scale, is about the size of Germany. Since this is something that we are very passionate about, we know that these kinds of technology applications are critical for policymakers. Industry is an important constituency as well. As I mentioned earlier, some of the work we’re doing around artificial intelligence for our data centers, we’ve deployed AI within our facilities to help optimize the energy consumption of the building, and we found that when we do this, we’re able to get a 30 percent reduction in the electricity that’s used for cooling. And, this is on top of all of the design and operational work we’ve done to operate some of the most efficient data centers in the industry. So, we think that that kind of technology has substantial applications for other industries around the world. We’re now making this available to commercial buildings, industrial facilities, other data centers and other large complex entities that can benefit from this kind of systems optimization. Beyond that, we’re helping support other uses of AI that are going to lead to mitigation and adaptation solutions. So, for example, we’re using AI to improve flood forecasting in India, and then use that information to target hyper-local alerts so that those who are going to be impacted most by a change in climate, can use technology to adapt to climate change. We’re working with organizations like Climate Trace, which is a consortium of organizations in the AI space that are committed to using AI for remote emissions measurement, and, I think, there will be some exciting announcements from that consortium in the coming months. So, we’re very excited to be supporting platforms, and using our technology.

    Otum: That’s great. One last question to each of you. The Biden Administration has certainly been very very active with respect to climate already with the executive orders it has issued, and there certainly seems to be momentum within the Administration, and the United States’ resurgence on the international level is all very encouraging. But, for those who may be skeptical about real change happening in addressing climate, can you tell us what you are hoping to see as next steps from the Administration or next steps at large in terms of climate?  What are some of the key next steps that you think are important to sustaining the momentum that we’re already seeing?

    Hanna: We’ve seen over the last six to nine months a tremendous gain in momentum on this issue both nationally with the focus that the Administration has placed on this issue, with the number of utilities and states that have committed to getting to zero carbon energy grids. We’ve seen countries like Japan and South Korea commit to 100 percent net zero economy goals by mid-century. China has taken on a net zero goal by 2060. The European Union continues to invest in the European Green Deal. They’re increased their targets for 2030 to 55 percent reduction. So, we’ve really seen an unprecedented advance in political momentum, and, I think, we’re hoping that the Administration will continue to engage heavily in this space, both domestically and internationally. At home, I think we’re hopeful to learn more about their plans for things like a clean energy standard nationally, for investment in infrastructure, for continued measures to manage greenhouse gas emissions under existing authorities, like the Clean Air Act, and we’ll be watching keenly to see where the Administration heads in the coming months and years. On the international front, COP26 is certainly going to be a major moment for the world, and we’re excited by the employment of Presidential envoy, John Kerry, to help lead the charge for the Administration going to the COP this year, and we’ll be watching and doing our best to support a really robust outcome at the COP, so lots to do.

    Farber: Yeah, I certainly agree with all that. I think the Administration is really dead serious about addressing the climate issue. It’s a high priority for them. They have the advantage of working in a context where a lot of major firms are already wanting to move in this direction. A lot of states are already wanting to move in this direction, and frankly the market is telling us that economically it’s the right way to go. I think we can expect to see a bunch of regulatory things coming out of EPA, out of Interior, out of the Securities and Exchange Commission about corporate disclosures and out of the Federal Energy Commission over utility regulation, over the next couple of years. I think the hallmarks of this Administration’s actions are going to be connecting the climate issue with jobs and economic success. I think that’s really important in terms of generating political momentum, and I think we’re also going to see a lot more emphasis than we’ve had in the past on climate justice, on making sure that communities are not left behind by this change, and, I think, that’s also going to be not only worthwhile for its own sake, but I think it will also pay political dividends in deepening support for the Administration’s actions. So, I’m actually pretty optimistic. The challenges we’re facing are enormous, and we shouldn’t minimize that, but I’m hoping that we’re at last at the point where we’re ready to really roll up our sleeves as a country and get to work on the issue.

    Otum: Thanks so much, Mars and Dan for sharing your insights with us today. For our audience, if you’d like to learn more about the work that Mars and Dan are doing on climate and sustainability issues, please see Google’s climate goals at sustainability.Google and you can learn more about Dan’s work on the UC Berkeley webpage for the Center for Law, Energy & the Environment. Thank you.

    Walsh: Thanks, Peggy, Mars and Dan for sharing with us today. I’m sure I’m not alone in saying that I’m very interested to see what happens next in this important area. And, thank you, everyone, for joining us on this episode of In the Public Interest. We hope you’ll join us for our next episode as well. If you’ve enjoyed this podcast, please take a minute to share it with a friend and subscribe, rate and review us wherever you get your podcasts. See you next time on In the Public Interest