Biden's offset reset

A newsletter from POLITICO for leaders building a sustainable future.

May 28, 2024 View in browser   By Jordan Wolman With help from Allison Prang and Zachary Warmbrodt THE BIG IDEA Ali Zaidi, White House national climate adviser, stuck his neck into the hot carbon offsets debate. | Evan Vucci/AP A SWING AT OFFSETS — The Biden administration is stepping into the carbon offsets debate in a big way, laying out new guardrails for corporate participation that could help boost confidence in markets that have come under heavy fire in recent years. The set of best practices released today were discussed at an event featuring officials including Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm are voluntary and so don’t appear to carry much weight in terms of enforcement. But they offer a signal of the administration’s intent to restore confidence in the potential for offsets to help reach net-zero emissions goals. The fact that it’s on the minds of the top White House officials and cabinet secretaries is noteworthy given the radioactive nature of offsets — a promising tool to fight climate change but one that has bedeviled climate wonks over tricky accounting, questions about corporations’ prioritizing them over absolute reductions and claims that they can be used for greenwashing. "These principles are about laying our marker as a U.S. government on how this one type of tool can best support our climate goals and complement the rest of our climate and clean energy efforts at home and on the international stage,” John Podesta, White House senior adviser for international climate policy, said at the event promoting the new principles. While carbon credits can be helpful, market participants must be certain that one credit represents one metric ton of carbon dioxide removed from or kept from being released into the atmosphere beyond what would have otherwise occurred, the administration said in the guidance. The guidance also said companies should prioritize “measurable and feasible emissions reductions” — and that any carbon credits purchased and the activities that generate them should meet high standards and show “real decarbonization” while avoiding other harms. Public claims by credit users should also accurately reflect the nature of their purchased and retired credits — a nod to other federal efforts from the Federal Trade Commission and Commodity Futures Trading Commission to scrutinize environmental marketing claims. All of that is pretty much common sense, but the White House imprimatur could impart extra meaning that could encourage private-sector efforts to bolster the market's integrity. White House National Climate Advisor Ali Zaidi said a lot of people “are skeptical about the role that voluntary carbon markets can play” and are scared by news reports about greenwashing and what has gone wrong with offsets in the past. “The key is this: To see the voluntary markets as a complement, as a way to actually run out faster than compliance markets, run out faster than what is mandatory,” Zaidi said. One particularly noteworthy point on a sticky subject: The guidance supports allowing companies to count credits toward Scope 3 emissions, those generated by a corporation’s value chain, in cases where it would be “unreasonable to expect a company to be able to fully abate those emissions within a given timeframe.” You don’t need to look far to get a sense of the intensity around that debate in particular. The board of the Science-Based Targets initiative, a prominent climate action group, sparked an internal staff revolt and the resignation of an SBTi adviser last month by saying that companies could use carbon credits to curb their Scope 3 emissions. SHAREHOLDER SCOREBOARD EXXON ANGER — Regardless of the outcome of tomorrow’s board elections at ExxonMobil's annual meeting, the oil giant's leadership is likely to come away from the vote having learned an important lesson about shareholder relations: Mess with one of us, you mess with all of us. Stakeholders including the nation’s largest and third-biggest public pension funds have said they plan to vote against either the majority or the entirety of Exxon’s director slate because of its decision to continue litigation against a pair of small investors that withdrew a proposal seeking climate action after the company sued them over it. Now, a $1.5 trillion Norwegian oil fund and top 10 shareholder is joining the party, committing to vote against the reelection of a board member. For those leading the backlash, the fight is more about protecting the rights of investors than Exxon’s stance on efforts to fight global warming. “This is not about climate change,” Marcie Frost, head of California’s public employees’ retirement system, said in a memo. “The company's decision to seek new, broad corporate power puts every issue on the table.” Emily Mir, an Exxon spokesperson, said the company does not understand how CalPERS “can make such a poor fiduciary decision” by defending “the abuse of a shareholder process by proponents who have publicly stated they have no interest in creating shareholder value” — and that it’s CalPERS’ vote against the board that will “chill” investors. Exxon, which won the right to continue its case against one of the shareholder activists last week, bypassed the traditional lane of asking the Securities and Exchange Commission to rule on whether proxy proposals can be left off the corporate ballot. Democratic financial officers also wrote to large investors including Vanguard, BlackRock and JPMorgan urging them to vote against Exxon’s slate of directors. None of the 18 firms disclosed how they planned to vote. The shareholder unrest comes as Exxon continues to fight legal challenges over its intransigence on climate issues, including efforts being backed by the company’s founding family, the Wall Street Journal reports. The company did get a boost from Republican states’ new complaint to the Supreme Court in which they defend the company against lawsuits from Democrats seeking climate damages. WASHINGTON WATCH THE GREAT IRA SWITCH — Two major trade groups that fought against the Inflation Reduction Act as it wound through Congress two years ago would defend President Joe Biden’s signature climate law if the GOP wins back the White House. Both the U.S. Chamber of Commerce and American Petroleum Institute said they would work to keep the IRA intact despite former President Donald Trump’s vows to eradicate it, Kelsey Brugger reports. “Business is going to defend the Inflation Reduction Act,” said Christopher Guith, senior vice president at the Chamber’s Global Energy Institute, adding that the Inflation Reduction Act is instrumental for “energy security, competitiveness, and the business case for the energy transition.” That doesn’t mean Republicans won’t still try to undo parts of the law they don’t like, with a particular wrath directed toward electric vehicles. But in the business and fossil fuel communities, there’s been a warming up to the IRA, especially provisions boosting hydrogen projects and those that capture and store carbon dioxide. DATA DIVE OUT OF VOGUE — Attacks on environmental, social and governance principles might either be a fading fad in conservative media — or a response to corporate retreats and conservatives’ declared victory on the issue. Mentions of “ESG” and “woke capital” in conservative media outlets like Fox News, Breitbart, New York Post and Newsmax are down 78 percent from their peak in June 2023, though they have ticked up since October. Engagement on these topics via likes, retweets and shares of related news articles has fallen 93 percent from its April 2023 peak. The data, collected from political consulting firm Bully Pulpit International, showed that the June 2023 spike in mentions of ESG topics coincided with House Republicans’ targeting of now-finalized gas stove regulations from the Biden administration. Republicans’ attacks on ESG over the past several years seem to have prompted Wall Street firms to move away from coordinating net-zero and sustainability goals, but those efforts don’t seem to have done much to sway voters. YOU TELL US GAME ON — Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. Join us every Tuesday as we keep you in the loop on the world of sustainability. Team Sustainability is editor Greg Mott and reporters Jordan Wolman and Allison Prang. Reach us all at gmott@politico.com, jwolman@politico.com and aprang@politico.com. Sign up for the Long Game. It's free! WHAT WE'RE CLICKING — The Washington Post looks at the barriers to retrofitting older school buildings with air conditioning to help students and educators cope with global warming. — Steven Chu, who was energy secretary in the Obama era, tells the Financial Times that “totally amoral” Wall Street analysts are hurting the climate transition. — The New York Times has a take on why President Joe Biden is steering Americans away from Chinese models as he pushes for wider adoption of electric vehicles.   Follow us on Twitter Debra Kahn @debra_kahn Greg Mott @gwmott Jordan Wolman @jordanwolman Allison Prang @AllisonPrang   Follow us

To change your alert settings, please log in at https://login.politico.com/?redirect=https%3A%2F%2Fwww.politico.com/settings This email was sent to rouf@idiot.cloudns.cc by: POLITICO, LLC 1000 Wilson Blvd. Arlington, VA, 22209, USA Unsubscribe | Privacy Policy | Terms of Service