Session 2 of TED's Countdown Dilemma Series from June 2022 features scientists, activists, artists, frontline community leaders and more debating the role for carbon credits in a net-zero future. (Featuring, in order of appearance: Lindsay Levin, Nicole Ng, Derik Broekhoff, Oliver Geden, Elizabeth Willmott, Noorie Rajvanshi, Aaron Rutkoff, Gabrielle Walker, Annette Nazareth, Tasso Azevedo, Mowgli Holmes, David Fenton, Nyombi Morris, Rod Carr, Suzi Kerr, Genevieve Guenther)

I am thrilled to be joined by my brilliant, brilliant colleague Nicole Ng, who's part of the core Countdown team.

Nicole, welcome, and thrilled to host this session together with you.

So the conversations are animated, which is what we wanted, and you'll remember that we talked about, think back to that beautiful little video at the beginning.

We're in the space of dilemmas, and when things kind of feel uncomfortable and grab us, that's the time for each of us to just kind of dig in deeper and really listen.

We've got another set of discussions now to share before we break for lunch, and then this afternoon, as you know, is very much interactive workshops.

And we're going to focus with this piece of the morning quite a lot of our attention on the how, the how of getting from where we are to a different and better place.

And we're going to be hearing from voices from the front lines of the Amazon through to market regulators, standard setters and buyers.

Before Nicole introduces our first speaker, I just want to bring 1 more voice from the parade of people that we had standing in the aisle.

I did say we would make sure we included those voices.

So I just want to invite Julio Friedman from Carbon Direct to just briefly share his comment and then we're going to get into the rest of the conversation.

And I'm a full-time carbon wrangler all day, every day.

And I've spent 30 years in climate, 20 years in carbon management, 12 years in carbon removal, in government, in industry, and in academia.

The very brief thing I would like to share is that We have to build generosity of spirit with the same fervor that we build policy, that we invest in technologies, that we move markets.

And we are easily tempted to throw rocks at people who are taking steps forward.

There's a lot of people in this room who want to hold other people's feet to the fire.

That has a purpose, but at the end of the day, that's empty calories.

We have to work together proactively, firmly, vastly, productively, and in unprecedented ways.

I know you're part of 1 of the workshops this afternoon, so thank you very much indeed.

More time later to hear more voices from the room.

And more voices from the TED World Theatre, but now Nicole, our first speaker.

Great, so let's remind ourselves of the bigger picture.

What's the difference between achieving individual net 0 and global net 0?

Our first speaker has spent 20 years working on carbon credits.

He's advised numerous state, national and multinational carbon programs and is an expert advisor to the Science-Based Targets Initiative and senior scientist at the Stockholm Environment Institute.

Derek Brookhoff, CEO and Director, Stockholm Environment Insitute

Net 0 has become the dominant paradigm for climate ambition.

Many countries have announced net 0 targets, and so many companies are doing the same.

Today, I want to challenge the idea that companies should emphasize achieving net 0 for themselves rather than focus on how best to contribute to global net 0.

Quote, "'A company is not carbon neutral, it contributes to neutrality.

Let me explain why I believe it's essential to make this distinction.

Current net 0 frameworks presume that companies should imitate at a corporate level what must happen globally.

That is, reduce their own emissions as far as possible and balance out the emissions that remain with carbon dioxide removals.

Yet this notion is already leading to a perverse effect on how companies spend their mitigation dollars.

According to at least 1 study, just a handful of companies have already pledged more removals than the entire world could provide.

At a global level, removing carbon dioxide from the atmosphere will be essential for limiting global warming, as the IPCC, for example, has made abundantly clear.

But having corporate actors purchase removals in bulk to achieve their own mini versions of net 0 misses the forest for the trees.

The world desperately needs to reduce emissions.

To move the world towards net 0, companies would do better in the near term to both reduce their own emissions and help others do the same.

The focus on achieving individual net 0 also makes it easy to ignore equity.

Under the Paris Agreement, for example, all countries are expected to contribute to achieving net 0 globally, but wealthy countries are expected both to move faster and to provide mitigation and adaptation finance to developing countries.

Among corporate actors with net 0 targets, some have given a nod to moving faster by pledging to reach net 0 well before

Fewer, however, are committing to finance at scale the mitigation efforts of those who can least afford them.

There is an emerging consensus that companies should go beyond their value chains and contribute funding to global mitigation efforts.

Under an equitable approach to global net 0, rich actors should contribute well beyond what it would take to bring their own emissions to net 0.

The focus on achieving net 0 distracts from this, creating the perception that companies that have adopted these targets have done their part, regardless of the larger context or of what equity would demand.

Building on that idea, I would like to contribute to today's discussion 3 principles that could inform more equitable and ambitious corporate net 0 targets.

The idea of achieving net 0 at a corporate level is self-centered.

We need to change the narrative from, we're no longer part of the problem if we've neutralized our emissions, to, we are part of a global solution to climate change.

This means not just imitating what needs to happen globally, but instead taking actions that beneficially advance a global net 0 outcome, including by prioritizing emission reductions over removals in the near term.

From a scientific perspective, there's no reason why the correct level of emissions for any given actor should be net 0.

What is fair and feasible could be net positive, 0 or negative emissions.

Companies should focus on making equitable contributions to global goals, including through near-term support for emission reductions outside their value chains.

Third, connect with larger policy efforts.

No company acting on its own can solve the climate crisis.

We urgently need to focus attention on collective action.

Companies that are truly committed to net 0 need to support climate policies at all levels of government and internationally that advance an equitable, comprehensive and coordinated global transition.

We need to put net 0 in its proper focus.

The point of setting net 0 targets is not for each company to achieve net 0, but to contribute what it can to global net 0.

1 of the ways companies could make the kind of contribution that Derek just talked about is by supporting the development of affordable removals.

As we know, the latest IPCC report deems removals unavoidable.

1 of the leading IPCC authors is our next guest.

He can't be here with us today but a few days back David Bielo sat down with him to better understand the need to scale investment and the role of businesses.

Here is Oliver Gedden from the German Institute for International and Security Affairs.

Thank you for joining us here at TED Countdown.

You're an IPCC lead author and worked on the mitigation report, which had a lot to say about carbon removal.

Can you give us some of that in a nutshell?

Yes, in a nutshell, we need carbon dioxide removal to reach our targets globally and nationally.

It's best to be explained why the so-called net 0 targets they're called net targets because something will be left in terms of emissions, so-called residual emissions, from hard-to-abate applications, aviation, agriculture, other processes, and you need to counterbalance that with carbon dioxide removal.

But we can also use this to get there earlier, to accelerate mitigation, and we might also need it after the point of reaching net 0 to reach net negative emissions globally, to even turn the temperature knob into a different direction, because we might overshoot 1.5 degrees initially.

Of course, we have to invest more in research development demonstration.

We have to come up with incentive schemes to incentivize carbon dioxide removal.

We also have to come up with a system for monitoring, reporting, and verifying these carbon flows, because it's much harder to measure and to verify than simple emissions reductions.

So in this area, whether it's nature-based solutions like tree planting or peatland restoration or kind of the technological side of the house, technological innovation, You are of the view that we need to scale investment now because these things are very expensive in order to bring down the cost for later.

Can you explain why we need to start now?

Well, 1 reason you already gave, we want to scale up.

And from other innovation processes and cycles, we know that there are learning and cost curves we need to go through and it will take some time.

If you take the example of solar photovoltaics, solar PV, that took decades to get to the point where we are right now in terms of technological advancement and cost.

The second reason is there's often a misunderstanding that we will need carbon dioxide removal only later in this century.

And then we can, let's say, first try reducing emissions in a conventional way and then look for the rest, how to counterbalance that.

A technology like direct air capture with carbon storage is several hundreds of dollars per ton removed, and that's way too high.

But it can be brought down cost-wise as wind and solar already proved.

Now there are innovations on not just the technology side, but the financial side, including the newly launched Frontier Fund.

Can you tell us about that and what sort of potential you see from innovations like the Frontier Fund?

So this Frontier Fund is basically doing an advanced market commitment and giving already a signal that there will be demand.

For the small companies who are now investing in carbon dioxide removal technologies, trying to improve them, it's often unclear, okay, will there be buyers or not?

Only if we, let's say, cross the $100 line from above or early, who's going to invest in that?

And this fund, and you see several other initiatives, although not at that volume, But this fund said, OK, we're going to invest, I think, 925 million US dollars by 2030.

And we're not going to buy the cheapest options, but the most promising ones in the long term, in terms of scalability and, again, durability.

And I think for companies and startups and even researchers who are in that field, it's a great signal to see, okay, somebody's actually going to buy that stuff and price is not their first priority, but potential is the first priority.

1 of the founding companies of the Frontier Fund, Stripe, has been doing that for quite a while and in a scientifically robust way.

They invested a lot in, say, assessing and certifying processes.

And we need that early on to find out what works and what works not.

Of course, governments could do the same, could mandate that, or could have public procurement in that area.

But it's good to see that companies are stepping up as well this early.

So business as we know has a crucial role to play in carbon markets, primarily as purchasers.

Among the companies that are stepping up are those represented by our next 2 guests, And they're here to explore what they're doing, what approach they're taking, and frankly some of the challenges and obstacles along the way.

Nuri Rajvanshani is Siemens US Director of Sustainability and Climate Strategy.

And she leads on its decarbonization plan to achieve carbon neutrality by 2030.

She's a former research fellow for Project Drawdown.

With a background in the public and non-profit sectors in urban sustainability, Elizabeth Wilmot is Microsoft's carbon program lead.

She's responsible for figuring out how to fulfill the company's commitment to be carbon negative by 2030.

And to moderate the conversation, I'm delighted to welcome Executive Editor of Bloomberg Green, Aaron Ruckoff.

I'm Aaron Ruckoff, the editor of Bloomberg Green, and 1 of the roles that I have and that is it's talking to business leaders about how they're approaching decarbonization.

1 way you could look at this conversation that we're having right now is between 2 companies that are at different parts of their journey towards net 0 or carbon negativity.

Liz from Microsoft, I mean you're you're aimed at carbon negativity in the near term, and Siemens is earlier on in the journey.

So 1 of the questions I have for you both as from your different perspectives and where we're at is, how do you begin setting standards?

I know both companies have participated in the task force on voluntary carbon offsets, and that's 1 of the efforts at that center.

I know you're both setting centers for yourself, so I guess 1 opening question, Nouri, for you is, what makes a company an eligible buyer of carbon credits?

And do you think Siemens is at a place where it should be buying carbon credits right now?

And I think we are, as you said, very early on in this journey.

We still have a lot of work to do on reducing our scope 1 and 2 emissions first, and also work to do for our scope 3 emissions.

So we have started thinking about carbon offsets already, carbon credits and what constitutes as good carbon credits and we are setting some internal guidance for that.

So we are looking at projects that have credibility.

They have a lot of certification around it.

But we are also looking at projects that might have benefits, but we are considering the harms that some of the projects might do.

For example, more local for a station project, right?

They might give the credits that we want, but they might also harm the local communities or might harm the biodiversity.

So that's a big consideration when we are selecting projects for our offsetting.

And this is preparatory work, or is the company currently purchasing offsets as part of a strategy?

We haven't made any large-scale purchases yet.

As I said, we have a lot of work still to do in our reduction strategy.

I mean, you're at a place right now where the work that Microsoft is doing, you publish papers in nature, kind of talking about your work in making purchases.

So I guess I'm curious how you're beginning to exert standards over what Microsoft is choosing to buy and what it won't buy.

Right, when we first set our carbon negative commitment in January

we established it based on science and based on, frankly, employee activism.

We have a very robust employee activist community.

And we said that that would be a part of the DNA of the program going forward.

And so when we first issued our procurement process for carbon removal back in the summer of 2020, we tried to do so in as transparent a way as possible.

Sharing the lessons learned, sharing the bumps and bruises along the way, as you mentioned, we published that in our white paper and we've also published criteria along with Carbon Direct that indicate what we think should be a standard for high-quality carbon removal, including criteria for environmental justice.

That's not to say we've gotten it perfect, far from it, but we are very committed to helping this nascent market to develop and very committed to supporting efforts like all of those mentioned today and you'll hear from later today focused on integrity in voluntary carbon markets.

So you identified 1 of the sources of sort of spurring you towards action in your employees and talking before this I learned that you know, you, these 2 companies have a relationship, Siemens and Microsoft.

You're kind of both in each other's emissions chain and in Scope 3.

Can you guys talk about that, about how you're linked?

Well, as part of Microsoft's commitment to be carbon negative by 2030, we've said we're going to cut our emissions by more than half by 2030, and that includes our scope 3 emissions.

Fortunately, Siemens is not only 1 of our customers but also 1 of our suppliers in providing switchgear for our data centers and many other pieces of equipment.

And so that's a very proactive partnership we have that Siemens and Microsoft have.

But across all of our supply chain, we've actually issued a supplier code of conduct that, excuse me, a carbon requirement in our supplier code of conduct that requires our suppliers to not only report their emissions, but also reduce their emissions.

And so this is just an example of 1 of the great partnerships that's happened as a result.

And I'm curious, to what extent is it your customers or clients that are driving the standards that you're starting to exert, both on emissions and carbon credits?

Customers like Microsoft, who are really progressive in their thinking, are propelling us to do what we promised faster.

So data centers is our big business and Microsoft, Facebook, many other companies that use switchgear are now demanding net 0 products from us.

So that is making us evaluate our own product carbon footprint, not just in manufacturing, but our own supply chain to figure out how much carbon we are actually emitting when we are manufacturing those products and what we can do to reduce that and when we deliver to the customer, how can we make sure that they are truly net 0.

So that's 1 of the key components of our supply chain work that we are doing.

So just in reference to the conversation that's been happening this morning where it feels like there's a lot of people in this room calling out for standards and integrity, you know, we've identified some things that are spurring your standard setting, right, the employees or customer relationships.

I'm curious, you know, voluntary is another word for unregulated, right?

Would it be better if instead of this being based on...

Based on, you know, these internal spurs to action, if this was a matter of regulation or law or government standards?

Microsoft has been very vocal about that.

In many forums, we've called for the SEC, the Securities and Exchange Commission in the United States to require that companies disclose their greenhouse gas emissions.

And we also have provided comments, multiple rounds of comments to the European Union and to the US federal government on the role for government agencies to play in overseeing the quality of standards, of carbon market standards.

That really matters because government is, I think, the 1 sector that is really well-suited to speak not only to the public interest, but also the planetary interest.

And then government, we are also supportive of the SEC regulations, but also the CSRD regulations that are coming down in Europe.

And we think that the government regulations will bring in the transparency that is lacking right now and what companies like Siemens or Microsoft are pledging but are they actually doing this.

So I mean now in the in the absence of government norms I want to talk about sort of the choices you're making with money especially Microsoft since you're a huge buyer I mean I want to I want to ask questions about the state of the billion-dollar climate fund and sort of talk about how you choose where you're putting your money and what you're sort of looking to see happen with where that money goes.

We want to bring the green premium of these technologies down, not only for carbon reduction, but also carbon removal.

That's true of our procurement processes.

When we purchase sustainable aviation fuel, when we purchase renewable energy, when we purchase carbon removal, and someday soon when we purchase lower-carbon materials, we want to be able to make forward commitments to these solutions, some of which do not exist yet today and many of which do not exist affordably today.

And so we've actually redesigned our internal carbon fee, which we've had since

And it's a fee that we charge across all of our businesses and we collect to pay for these types of activities.

And we increased that considerably to $100 a ton for our business travel activity this year.

And we're using that to fund forward commitments in these areas.

Not only again not only removal but also reduction and as to our 1 billion dollar climate innovation fund I'm happy to say that we've actually invested in several companies that are represented today.

Aclima as represented by Peggy Shepard who focuses on hyper local emissions data.

Block Power, which is represented by Donal Baird, which does building electrification, and Cocoa Networks, which is represented by Greg Murray, which does awesome work converting cooking fuel from charcoal to sustainable fuel to not only help air quality, but also help protect Africa's forests.

So That was a long answer, but I just wanted to get all my shoutouts in.

Well, so it's exciting that there are people who kind of passed your screen that are here today.

I mean, you guys do a lot of work sort of indicating how seriously you take it.

But in just looking at the record of your analysis from the past, you know, year or 2 of being in this business, it seems like you're actually rejecting a lot of applicants.

So I guess, since we're talking about standards and integrity, what doesn't pass the smell test for you?

Well, the first year was a real learning experience for all of us.

We issued our first procurement, our first request for proposals in August of 2020, and we got a lot of proposals that were not carbon removal.

And a robust debate can be had about avoided emissions projects, but we simply said, as our colleague Julio Friedman would say, we need to define what carbon removals are.

We need people to know what they are and what they are not.

And so that was a big pile of things that we, I mean, may be good projects, but we had to reject because they simply weren't pulling carbon out of the atmosphere.

And 1 of the things I noticed is that between year 1 and year 2, I mean, I know you have this huge pot of money to spend, you're putting more money in, there's a $300 million fund that was more recently announced for carbon removal, Is it a problem that the growth between year 1 and year 2 is kind of slow?

Like I think you went from 1.4 megatons to 1.5 megatons of carbon removed.

And for a company like Siemens, I'm curious, does that scaling issue present as a limit on your ability to use this market in the future?

Yeah, I mean, that's why we are starting early, right?

We are not ready to purchase yet, but we understand that we need to start looking at what's out there.

I think 1 way we are also engaging is our financial services division is looking for projects like this to invest.

So they think that we can not only bring the capital, but we bring the industrial experience that Siemens has that can help companies like this scale up faster than they have originally planned.

So yeah, we are definitely thinking about that.

And in terms of where the money is going, are you, I mean, is there a kind of carbon removal that you feel like now you're turning to more with the money that you have to spend than you initially expected that you would be like, where are you finding the good removals right now?

It's very, still a very nascent market, but with our redesigned carbon fee and the the increased confidence that we have that we will have more funding in the coming 10 years we are able to purchase more high durability tons from projects like direct air capture like carbon mineralization like biochar and again I would happily direct anyone to our criteria to which are published on our website and all the proposal information which we also publish on our website to show exactly what we're talking about here.

But it is those types that we, because Frank, it is the higher durability types that we're seeking.

Because that is the outcome that we need.

And that is what makes good on the promise of, and the call to action that the IPCC made on removals.

So carbon-free credits has become a sort of umbrella term under which many different credit categories get lumped together.

Yet each has its distinct use cases and contribute to different kinds of outcomes.

Gabriel Walker, a past head speaker and leading thinker on removals, has some ideas for how we might reorganize our thinking by focusing on what we're really trying to achieve.

So I'm gonna tell you something I've actually never told anyone before, which is about a few years ago, I decided to offset my entire adult life.

So I started at the age of 18, and I estimated roughly how many emissions I caused in different stages of my life up to that point.

And I bought the highest-quality carbon credits I could find, because I wanted to be carbon neutral.

But it didn't make me feel any less guilty.

It didn't make me feel any less anxious about the climate crisis.

I think the carbon market is immensely powerful and immensely valuable, and I do think we can use it as a powerful tool for helping to solve the climate crisis.

But I've also started to think that we've been thinking about it the wrong way.

Instead of it as being something to wash away our climate sins, we need to focus on the outcome, figure out how to steer that firehose of money towards the things we're actually trying to achieve.

Now, I think there are 3 really big and important climate outcomes that the carbon market could help with.

So there's reducing fossil emissions as fast as possible, there's protecting natural carbon sinks and there's removing CO2 from the atmosphere.

See all TED Countdown transcripts on Tedtalk

TED Countdown Dilemma Series: Carbon credits [Session 2]