Building the low-carbon economy on firm foundations

When Jean-Claude Juncker took office as the President of the European Commission last year, reforming Europe’s energy policy was top of his priority list, starting with the launch of a strategy for a forward-looking Energy Union based on the determination to go green. Transitioning to a sustainable low-carbon society in a competitive and innovative way is a central pillar of the plans. And it is with this goal in mind that the EU will seek to lead the way at this month’s COP 21 Paris Climate Change Conference – an event which  could be a turning point in the fight against climate change.

The European Commission has called for world leaders attending the conference to embrace “a global vision for a long-term goal” which would send a message to businesses, investors and citizens that governments are serious about making the move to low-carbon economies. This is long-overdue.

Much of the private sector has long since recognized that going green makes good business sense, and a bottom-up approach to reducing carbon emissions has already helped the EU become the most emissions-efficient economy in the world – it achieved a 19% emissions reduction between 1990 and 2013 while its GDP grew by 45% during the same period.

With business steaming ahead, policymakers need to place their support firmly behind the transition to a low-carbon economy. Last month, Microsoft joined forces with 77 other companies conscious of the role that the private sector must play in the fight against climate change and calling for governments to take bold action in Paris.

The EU has also highlighted that any agreement reached in Paris needs to factor in technological development allowing the implementation of emissions-reduction strategies, as well as pointing out that other EU policies on issues such as technological innovation and cooperation should be considered as complementary to climate policy. This is a call to action we fully support.

As a technology company, we’re particularly conscious of the positive role that the ICT sector can play in enabling the move to a low-carbon future. As industry association Digital Europe highlighted recently, innovative technological solutions have the potential to radically improve the impact we make on our planet; whether that’s using big data to build and run smarter, greener buildings, embedding energy-efficiency into our products and solutions from the offset, or investing in external low-carbon initiatives.

Unfortunately, the adoption of such digital solutions remains slow and costly. As delegates at the recent  conference in Barcelona concluded, only effective policies which foster adoption and growth can help overcome this challenge.  Bringing green technologies to market requires a multidisciplinary approach. With its Energy Union Package, the European Commission has committed to supporting breakthroughs in low-carbon technologies by coordinating research and helping to finance projects in partnership with the private sector. However, choosing the right projects will be key.

Greening our economies is also a corporate responsibility. At Microsoft, we’re committed to making smart energy choices about how we power our businesses, from building energy-smart buildings on our Redmond, Washington, campus, to purchasing wind power to run our operations. Our greatest step towards going green, however, has been the implementation of our internal carbon fee, a step taken as part of a pledge to make all our operation 100% carbon neutral, which we achieved in 2012.

In practice, the carbon fee holds our various business groups financially responsible for the cost of reducing and compensating their carbon emissions. The funds raised from this fee are then reinvested in internal carbon reduction initiatives. This means purchasing green power either through both long-term purchase agreements for large scale wind farms or through renewable energy credits. These credits allow us to purchase geothermal energy in Iceland, invest in the capture and combustion of landfill gas to supply clean electricity in Turkey, and support community-based carbon offset projects around the world.

Msft Carbon Fee

The carbon fee not only holds each and every Microsoft business division accountable for their environmental impact, but also allows us to unlock funds for worthy low-carbon projects, which can in turn bring us closer to a low-carbon future.

This virtuous cycle of investment and action is fast becoming an industry standard. We are one of 400 companies around the world to have voluntarily integrated a carbon price into their business model. Governments are catching on also – 40 countries have carbon pricing of some form, whether a carbon fee or a trading system for emissions allowances such as the one implemented by the EU.

In the same way that we hope valuable lessons can be learned from our carbon fee project, we also want to able to share our expertise in other areas to further help communities go green. This can be as small as ensuring that the Microsoft device you purchase is as eco-friendly as possible, or as momentous as helping a whole city in Spain to become more energy-efficient thanks to the Microsoft Cloud.

The fight against climate change is bigger than one company or one country. It’s bigger than all of us. And it’s no exaggeration to say that reaching a concrete, resilient and targeted agreement in Paris will determine the course of our planet’s future like never before. Already, commitments made by governments and the private sector demonstrate the growing momentum towards action. We are hopeful that together, we can confidently and determinedly shape a better, greener, low-carbon future.

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Adina Braha-Honciuc
Government Affairs Manager – Accessibility, Sustainability and Environment Policy

Adina Braha-Honciuc leads Microsoft’s Accessibility, Sustainability and Environment Policy for Europe, Middle East and Africa. Prior to this, she has been working on policy issues relating to cloud computing and the digital economy, primarily privacy and data protection, and represented Microsoft on privacy matters in various trade associations. She also has experience in the field of corporate strategy within Procter & Gamble in Geneva and Beiersdorf in Hamburg. Adina holds an economics degree from Bucharest Academy of Economic Studies and a Master’s degree in International Business from BI Norwegian Business School in Oslo.