Decarbonizing the Future: Amazon’s Plan of Action

What is the US doing to pick up the slack since withdrawing from the Paris Agreement?

By Greg Pustorino

With more effects of climate change visible each year –harsher weather and warmer average temperatures among them– many US companies have pledged to be carbon neutral by 2050. Since President Trump abandoned the Paris Agreement in 2017, US companies have been forced to impose their own goals and restrictions in order to reduce pollution and greenhouse gas emissions. The Paris Agreement identified that a 2oC increase in average global temperature would have devastating effects on the environment and be irreversible for many decades. The goal of the Agreement is to limit the increase in global temperature to 1.5oC by 2050 and to reach peak greenhouse gas emission as quickly as possible. After 2050, the Agreement seeks to drastically reduce the rise in average temperature over the long term. 

In recent years, climate scientists have observed that Antarctic ice sheets are melting 70% faster and the oceans are warming 40% faster than previously predicted. This has led companies like Microsoft, Unilever, Apple, and Amazon to pledge to be carbon neutral by 2040 or even 2030 with stricter guidelines than the original Paris Agreement. Amazon last year announced its Climate Pledge with the tagline “Paris Ten Years Early…” and already has six signatories including telecommunications giant Verizon. 

Amazon’s Climate Pledge has three main tenets that its signatories must adhere to: regular reporting of greenhouse gas emissions, carbon elimination, and carbon offset. Organizations like Greenhouse Gas Protocol are responsible for measuring and tracking greenhouse gas emissions for member companies and for making the data publicly available for transparency. Carbon elimination, or decarbonization, can be achieved by switching to renewable energy sources, reducing material waste, and increasing efficiency. Carbon emissions offset techniques such as reforestation or forest conservancy are able to balance out any greenhouse gas emissions that cannot be eliminated through decarbonization.

With this pledge, and similar carbon neutral commitments, carbon accounting becomes very important as companies have to decide what their carbon footprint is first, before they try to eliminate it. Carbon accounting is especially important and difficult for large complex companies, like Amazon, whose supply chains are tightly interwoven with hundreds of other companies and suppliers. For this reason, Amazon has developed a sophisticated accounting system to keep track of emissions that indirectly contribute to the company’s carbon footprint. This system implements dollar-based emissions factors that correlate a certain amount of carbon dioxide emission to a specific spending activity. These factors are able to break down the quantity of carbon emissions that come from different components of a product or service. Therefore, if Amazon purchases a shipment of computers, these factors tell what the emission levels are for each component that goes into a computer, all the way down the supply chain from material refining to constructing the CPU to storing the computers before they are sold. These emissions levels are then added to the company’s carbon tab.   

Amazon also utilizes information from the Federal Highway Administration to calculate aggregate emissions from customer’s driving to physical Amazon stores or Whole Foods Markets, and internalizes their emissions into the company. The last sector of Amazon’s carbon accounting deals with emissions from Amazon’s delivery fleet, or the use of other delivery services like UPS, and their packaging. 

Combating these issues, there are soft changes that big companies like Amazon can benefit from that do not change the company’s structure or revenue streams. The first is switching to renewable energy sources, with Amazon setting the goal of being 80% renewable by 2024 and 100% renewable by 2030. This includes installing solar panels on warehouses and sorting centers and purchasing 100,000 no emissions electric delivery vans. Both of these investments, though expensive initially, will pay off in the long run in reduced utility demands and lower fuel costs for Amazon’s delivery fleet. Amazon also launched 15 wind and solar projects that produce enough clean energy to power 368,000 US homes annually. With rising traditional energy costs, these green energy investments will also pay off as Amazon has to rely less and less on energy from the grid. 

Frustration-Free Packaging is another example of how Amazon’s commitment to decarbonizing will not harm, but help, its business. Amazon has partnered with the toy company Hasbro to design 100% recycled packaging that uses less material and allows items to be shipped in their original packaging, reducing the need for double boxing. Over the past 10 years, Amazon has avoided the use of 500 million shipping boxes, reducing their packaging waste, and therefore cost, by 16%. 

None of the above changes have altered how Amazon functions as a company; they are simply quantifying the company’s carbon emissions (and that of their supply chains) and investing in technology that can make the business more efficient in terms of both emissions and costs. However, major changes start to take place with the third tenet of Amazon’s plan: investment into carbon offsets. 

Jeff Bezos pledged $100 million to The Nature Conservancy in order to aid with reforestation. Moreover, Amazon created a $2 billion Climate Pledge Fund, which invests in companies that develop technologies that aid in decarbonization and protect the environment. These more radical investments are what makes The Climate Pledge stricter than the original Paris Agreement, and are what Amazon hopes will help the world meet the goals of the Agreement 10 years ahead of schedule. 

US companies coming together to pledge to fight climate change irrespective of government policy is a promising sign that the goals of the Paris Agreement will be met. And the increased regulations and efficiency standards that the Agreement promotes have an effect on countries like the US who are not signatories of the Agreement. They require imports into member countries to meet certain standards of emissions and efficiency, which in effect makes the US adhere to the same standards if it wants to export goods to any of the 197 countries that signed the Paris Agreement. □


Work Cited

  1. Image source
  2. 2016, November 23. EU Emissions Trading System (EU ETS). Climate Action – European Commission. https://ec.europa.eu/clima/policies/ets_en
  3. 2016, November 23. Paris Agreement. Climate Action – European Commission. https://ec.europa.eu/clima/policies/international/negotiations/paris_en
  4. Net zero carbon by 2040. (n.d.). Retrieved September 20, 2020, from https://www.theclimatepledge.com
  5. The Climate Pledge. (2019, September 19). US Day One Blog. https://blog.aboutamazon.com/sustainability/the-climate-pledge