Google touts stalled rapprochement package on the energy agenda

Google and other companies will fail to reach ambitious climate targets unless laws and regulations are fastly approved and implemented to increase demand for cleaner forms of energy, according to a new policy statement from the tech giant.

The road to fulfilling some of the policy provisions by enabling the development and access to carbon-free electricity in the United States may be hampered if the Senate is unable to reach an agreement on parts of the House-passed $2.2 trillion climates and safety net budget reconciliation package, which has been on the back burner since February, it said.

The Alphabet Inc. subsidiary said in a document released Thursday that more laws to help drive down the costs of a wide range of carbon-free technologies and related infrastructural facilities are needed to ensure companies can meet carbon reduction goals.

Google approved the policy statement as part of an update to its 2020 declaration that it aims to run its data centers and offices entirely on carbon-free energy by 2030. While Google has become one of the largest corporate buyers of renewable energy, the company fears that unless lawmakers act, it will not meet its goal and that others will suffer a similar fate.

Given its market power and prominence, Google has a responsibility to promote policies that benefit the global economy, according to Caroline Golin, Google's global head of energy policy and market development.

"We will work together for political and policy change to benefit everyone," Golin said during a virtual meeting on the policy statement.

Tax credits and grants to subsidize the above-market costs of clean energy resources like wind and solar should be maintained, according to Google, because they have been shown to help scale up renewable energy across the country. To improve the effectiveness of tax credits, lawmakers should explore expanding their reach to encompass other resources and technology.

"First, incentives should emphasize funding for technologies that are crucial to integrating variable renewable energy resources, such as energy storage and high-voltage transmission," according to the policy statement. "Second, all carbon-free energy solutions should have equal access to incentives."

At last, policymakers should increase support for next-generation technologies and tailor them to drive continued innovation and cost savings, according to the statement.

Google advocated for the continued use of carbon-free technologies such as nuclear and hydropower.

"Many current zero-carbon energy plants throughout the world are in jeopardy of being shut down, even if they could safely operate for decades longer," the company stated. "Losing such significant amounts of carbon-free electricity will increase carbon emissions and make decarbonization of the electricity grid more difficult."

The Build Back Better Act, as well as a bipartisan 2021 bill (S 2475) from Sen. Michael D. Crapo, R-Idaho, were mentioned by Google. A separate tax credit for all carbon-free resources, as well as stand-alone subsidies for storage and transmission, were included in the reconciliation bill. Crapo's bill, which was submitted last summer, would create a technology-neutral tax credit that would phase out whenever technologies were proven commercially viable.

After Senate Energy and Natural Resources Chairman Joe Manchin III, D-W.Va. said he would not support the climate and social spending bill because of its cost, Democrats are scrambling to find a way to win Manchin's vote and pass the bill with 51 Senate votes under reconciliation rules that avoid the need for a filibuster-proof 60 votes.

Critics of the environment.

The Biden administration has been chastised by environmentalists for reneging on the president's climate goals. The White House said this week that throughout the summer, gasoline containing up to 15% ethanol may be sold, potentially worsening air quality in some places.

With the midterm elections just around the horizon, a combination of high fuel prices caused by Russia's conflict with Ukraine and rising inflation has left Democrats in a tight spot for their broad climate plans, according to analysts.

Furthermore, even if the rules spelled out by Google would benefit everyone, it is questionable if some members of Congress would be willing to bow to Google's policy effort. Its parent business, as well as other Big Tech companies, are facing growing bipartisan support for splitting up tech conglomerates, which they believe have too much market influence.

Despite the setbacks, Google is optimistic that it will be able to convince lawmakers to accept tax incentives and other sustainable energy initiatives.

"We don't really consider federal energy policy from the standpoint of the left or the right. We think of it in terms of impact "Golin remarked. "We'll continue to encourage and work with our trade groups and coalition partners to see the most aggressive, effective, and comprehensive climate and energy package that truly impacts and changes the lives of everyone."

Golin stated that decarbonizing the electricity used by corporations like Google and others will need "a whole system shift."

"We need to accelerate the transition to renewable energy now more than ever," she stated. "The reality is that the current regulations and economics that control our system must alter in order to meet a 24/7 carbon-free energy future."

Investors worried about environmental, social, and governance issues are also pressuring companies to not only strive toward decarbonizing their operations, but also to lobby for regulations that support such activities.

Investors filed a record 529 shareholder resolutions on ESG issues for the 2022 proxy season, up 22% from last year, according to a report sponsored by shareholder advocacy group As You Sow. Concerns about climate change account for 22% of those filed, while corporate political influence accounts for 19%, with questions ranging from whether companies' political spending aligns with their publicly stated values to whether companies' political spending aligns with their publicly stated values.

Google's parent company is facing two shareholder proposals regarding its lobbying efforts, one of which comes from Zevin Asset Management and requests that the company issue a report on how its political activities align with the Paris Agreement's ultimate goal of limiting average global warming to 1.5 degrees Celsius.

Alphabet's lobbying operations and proposal have been discussed with the ESG and proxy voting teams at State Street Global Advisors and The Vanguard Group, two of the largest asset managers.

In a statement on the proposal, Marcela Pinilla, director of sustainable investing at Zevin, said, "Alphabet's inconsistent lobbying activities risk eroding its reputation and undermining the investments it has made to decrease global warming emissions from its operations." "Unchecked lobbying that leads to the delay of climate change action will increase the likelihood of global economic systemic threats. On this one, we don't want Alphabet to be on the wrong side of history."

Golin declined to comment on whether the corporation would be ready to divert its political funding away from lawmakers who oppose clean energy initiatives.

She explained, "It's a much wider topic than that." "I am confident that we will always be engaged through coalitions and through our trade groupings."

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