On Tuesday, Microsoft announced some major updates to its sustainability commitments. The company said it would double its internal price on carbon emissions, meaning it will charge itself more for its emissions from operations, buildings, and data centers, and join a group advocating for a national carbon tax and dividend. These are nice steps for sure (and who doesn’t a love a little Earth Day-timed climate action?) but they’re also wholly inadequate and come at a time when Microsoft is helping companies fueling the very rise in carbon emissions that’s driving climate change.
Let’s start with the good stuff and give the $860-billion company a big ol’ belly rub. In the absence of a national, let alone global, set of comprehensive climate policies, companies have very little incentive to do anything about climate change. Yet Microsoft has slapped an internal price on carbon, which it raised this week to $15 per ton.
“This internal Microsoft ‘tax’ was established in 2012 to hold our business divisions financially responsible for reducing their carbon emissions,” the company wrote in a blog announcing the new price. “The funds from this higher fee will both maintain Microsoft’s carbon neutrality and help us take a tech-first approach that will put sustainability at the core of every part of our business and technology to work for sustainable outcomes.”
It’s a smart business decision because carbon will almost surely be priced one way or another in the future as the world tries to get a handle on emissions. In that light, it makes sense Microsoft would charge itself internally so it won’t be a shock to profits if or when governments put a price on carbon. The company currently collects a fee used to offset emissions by investing in renewables, funding sustainability projects, and improving transparency among other measures, according to a voluntary disclosure on its climate activities. According to a 2017 report from CDP, a group that tracks corporate reports on climate activities, at least 1,400 companies worldwide have an internal carbon price including tech giants like Alphabet, Adobe, and parts of Samsung.
But the internal price Microsoft put on carbon is also pretty weak. A report funded by the hippies at the World Bank found that in order to keep global warming below 2 degrees Celsius (3.6 degrees Fahrenheit), a carbon price would have to be at least $40–$80 per ton of carbon dioxide in 2020. Those numbers would have to rise to at least $50-$100 by 2030 (again, that’s an at least estimate and it could have to be much higher to materially affect emissions). So while Microsoft may well be ahead of some of its peers on the climate front (cough, cough Amazon), it’s not pricing carbon in a way that’s actually going to move the needle.
Then there’s was the company’s other big announcement, that it would be joining the Climate Leadership Council, a conservative-leaning group advocating for a national carbon fee and dividend in the U.S. Legislation based on the group’s proposal have been introduced multiple times by centrist Democrat and the more climate-friendly Republican members of Congress, but these proposals have gone absolutely nowhere with rank and file members. It’s hard to imagine Microsoft’s addition to the gang is going to make much difference.
But Microsoft will at least find familiar company in the form of the group’s founding members: Big Oil. The list includes Exxon, BP, Shell, and other companies Microsoft has provided technology to speed up production of the very fossil fuels driving us to a climate disaster. As Gizmodo’s Brian Merchant put in February, while Microsoft and other tech giants “may put on a progressive air towards climate change and extol their own clean energy investments, they are in reality deep into the process of automating the climate crisis.”
In February, Microsoft put out a very different sounding press release crowing that “ExxonMobil said today a new partnership with Microsoft Corp. will make its Permian Basin [ground zero for fracking] operations the largest-ever oil and gas acreage to use cloud technology and is expected to generate billions in net cash flow over the next decade through improvements in analyses and enhancements to operational efficiencies.” In December, Microsoft talked up its relationship with BP. And in November, the company again touted how Exxon subsidiary XTO is using Microsoft Azure cloud computing platform to find all those fossil fuels more efficiently.
But hey, on the bright side the company’s announcement this week said scientists and people working on climate solutions will also get access to Azure and data stored there. Here’s hoping they can figure out solutions faster than the oil and gas guys can find new fossil fuel deposits.