Tech Drivers

How Microsoft's new carbon-negative plan will test the idea of a climate economy

Key Points
  • Microsoft's plan to make up for every bit of carbon it has put into the atmosphere since it was founded in 1975 will require a mix of old and new solutions.
  • 100% renewable electricity by 2025, electric vehicles on campuses and alternate sources of business travel are familiar pledges.
  • But soaking up all the carbon in the air already is a new corporate goal and will require novel technology, such as direct air capture.
Microsoft CEO Satya Nadella speaks during a climate initiative event at the tech giant's campus in Redmond, Washington, on Jan. 16, 2020.
David Ryder | Bloomberg | Getty Images

Microsoft shook up the debate about global warming last week by vowing to make its operations carbon negative — meaning it will take more carbon out of the environment than it emits by 2030, and move rapidly to mop up the equivalent of every bit of carbon it has put into the atmosphere since its founding in 1975.

Some of Microsoft's tricks for reducing its carbon emissions are already familiar — using electricity from renewable sources (electricity production accounts for one-third of U.S. carbon emissions, according to the Energy Information Administration), with Microsoft pledging to use 100% renewable electricity by 2025 topping the list. The company is also pursuing energy conservation measures at its buildings and switching to electric vehicles for use on its office campuses. Some of its challenges, like reducing emissions from business travel when there are no good carbon-free alternatives for most air travel, will also seem familiar.

"There's a lot of discussion about who is going to roll out the strategy next,'' said Erica Belmont, an assistant engineering professor at the University of Wyoming and co-author of an influential 2018 National Academies of Sciences, Engineering and Medicine study on how to go beyond conservation, as Microsoft wants to do, to actually removing carbon that's in the air now.

That will be the hard part. And it may require a big assist from companies Microsoft sells to, companies it buys products and services from, and any office worker running Windows. Along with offsetting carbon emitted by Microsoft's suppliers, the electricity your computer or phone is using to read this story is a source of energy use that produces many times more carbon than Microsoft itself uses, the company says.

New technologies are getting cheaper

Microsoft is counting on everything from planting massive numbers of trees to soak up carbon and using technologies to capture carbon and sequester it in soil — burying it, essentially — to more exotic technologies, like direct air capture, in which arrays of machines take in ambient air, remove the CO2 from it, and use the carbon in chemicals or concrete. Another option is bioenergy produced from carbon capture and storage, or BECCS, which captures and contains carbon contained in plants when they are burned.

"We know this can be done," said Julio Friedmann, senior research scholar at Columbia University's Center on Global Energy Policy and a former deputy assistant secretary of energy under President Barack Obama. "All of these technologies are where solar was in 2005 — not cheap, but about to get cheap.''

VIDEO2:3902:39
Microsoft to become carbon negative by 2030

Microsoft also will use what amounts to private-sector carbon taxes, or fees it imposes on its supply-chain partners, and on itself for intracompany transactions, in order to raise the price of activities that use lots of carbon. Internal carbon taxes, now $15 a ton, will begin to be phased in on Microsoft's partners this July, a company spokesperson said.

The company's methods for reducing its carbon emissions to near zero are straightforward, and similar to what other businesses and consumers are doing. Its ideas for actually pulling carbon out of the atmosphere are more long-term, and experts are split on which ideas have more potential.

There's a demand-side revolution that I hope Microsoft will help exploit. People don't realize that they have also underestimated the options to conserve and mitigate our way out of it.
Amory Lovins
co-founder and chairman emeritus of the Rocky Mountain Institute

Switching to renewable power is the easiest and most common idea. Fellow tech giant Apple has already reached its goal of powering 100% of its operations with green electricity, the company said in its 2019 sustainability report, as Alphabet says it has done for at least two years in a row. Amazon has pledged to reach 100% usage of renewable electricity by 2030.

Workers at Microsoft will see some of the changes, like replacement of the buses Microsoft uses to ferry workers around its campuses with electric vehicles, and changes in buildings to make them more energy efficient. The company also said it will be holding regular hackathons where employees can pitch conservation ideas.

The push to switch to renewable power sources reflects what's happening across the economy. Including hydroelectricity, renewables now account for almost exactly 20% of U.S. electric power generation, according to the EIA. The percentage is much higher, almost 80% in Microsoft and Amazon's home state of Washington, where the Columbia River and other waterways are abundant sources of hydropower. California got about 32% of its power from renewable sources in 2017, according to state reports, and is committed to reaching 100% by 2045.

Amazon, whose package deliveries require more vehicles than Microsoft's business, made headlines last year by ordering 100,000 electric trucks from start-up Rivian, in which it has invested venture capital. It plans to make half of its deliveries carbon-free by 2030. Apple also has focused on making its products use less electricity, according to the company's 2018 sustainability report.

Debate over path to carbon negative

When it comes to reducing carbon use below net zero, though, the split among experts is between those who think technology is more promising, and more necessary, and some who think natural means like reforestation and soil sequestration will provide the largest part of the answer.

Favoring the more holistic approach is Amory Lovins, co-founder and chairman emeritus of the Rocky Mountain Institute, a Colorado-based think tank on environment and energy issues. He argues that BECCS and direct air capture are more expensive than reforestation and soil-sequestration approaches that, combined with deep reductions in carbon usage, will be sufficient to hold global warming below 1.5 degrees and will save trillions of dollars of capital investment by 2050, he said.

The key to making a so-called natural systems approach to carbon removal viable is to couple it with sharp reductions in how much carbon is emitted in the first place, Lovins said. He points to a 2018 paper by researchers in the U.K. that predicts a 40% drop in final energy demand from today's levels by 2050, saying such a drop will let the world rely on natural systems rather than machines that suck carbon from ambient air.

"There's a demand-side revolution that I hope Microsoft will help exploit," Lovins said. "People don't realize that they have also underestimated the options to conserve and mitigate our way out of it.''

Microsoft's plan appears to lean more heavily toward new technologies, such as direct air capture, based on a blog post from Microsoft president Brad Smith that noted not all of the technology Microsoft would use is commercially available yet. Direct air capture, according to a 2018 report by the Innovation for Cool Earth Forum, is estimated to cost between $300 and $600 per ton of carbon removed from the atmosphere. This is well above the $100 per ton that experts consider the threshold of commercial viability. Microsoft spokesperson said details haven't been set yet.

Rendering of a large scale Carbon Engineering plant. The start-up, backed by Microsoft founder Bill Gates, among others, is working on direct air capture as a solution to carbon emissions and climate change.
Carbon Engineering

Direct air capture may also be the only major technology now known that can handle the scale of carbon removal needed to keep the increase in global temperatures below 2 degrees Celsius by the end of the century, let alone the 1.5 degree change that the Intergovernmental Panel on Climate Change considers the preferred target, ICEF said. Globally, temperatures have already risen slightly more than 1 degree from preindustrial levels.

"One (DAC) does the work of thousands of trees," Friedmann said.

The idea is that arrays of machines suck vast quantities of air out of the atmosphere and separate out the carbon, which is either stored underground or used to make products such as fuel, chemicals or cement. Small-scale versions of this technology are well known: It's used in controlled environments to separate carbon dioxide used to make soda beverages fizzy, and astronauts on Apollo 13 improvised a direct-air capture system to lower carbon dioxide levels in their damaged spacecraft after an explosion in 1970.

Microsoft's role in this is likely to be to fund and invest in building out DAC plants as costs fall. Its plan includes $1 billion devoted to research into climate technologies, and especially to invest in project debt used to build carbon-removal facilities. This amount is beyond what most companies can easily do, but is a fraction of the company's $166 billion cash position at Sept. 30, or its $125 billion in operating cash flow for the last four quarters. It's also significantly more than the venture capital raised by the three leading start-ups pursuing the technology, according to Crunchbase: New York-based Global Thermostat, Swiss-based Climeworks and the Canadian firm Carbon Engineering, which includes Microsoft founder Bill Gates among its investors.

But it's still quite a bit less than the $10 billion set to be raised for research into negative-emission research by climate taxes in Europe by 2022, according to the Global CCS Institute, which studies carbon capture and storage, or CCS.

A U.S. carbon tax could raise as much as $180 billion in revenue by 2021, the Tax Policy Center estimated last January. That could be rebated to consumers in the form of lower income taxes, used for green investment, or other purposes such as deficit reduction, the center said in a Dec. 2018 report.

Microsoft might increase its own investment some time later but doesn't expect its money to be the decisive blow against climate change. And because direct air capture cleans air that can't easily be traced to one polluter, the technology's use will likely need to be mandated by governments to become widespread.

"We definitely wanted to invest to show that it's a priority," the Microsoft spokesperson said. "Whether it grows depends on the technology that's developed. The company understands this is not something we can address alone.''