Skip to content

Turning ambition into urgent action: why policy incentives are crucial

Welcome to the thirteenth series of the DNV Talks Energy podcast, hosted by Mathias Steck. In this series we explore the key insights from DNV’s latest Energy Transition Outlook and what they mean for the future of our planet. We explore the geopolitical developments affecting the energy transition, and what’s needed from technology, finance and policy in delivering net zero. Crucially, we explore: how do we move from ambition, to urgent action over climate change?

In this ninth episode, we explore what is needed from world leaders to deliver on their ambitious commitments to meet decarbonization targets and to ensure goals filter down to the micro level to drive action.

Host Mathias Steck is joined by Genevieve Ding, Head of Sustainability Policy Strategy for APAC at Amazon Web Services (AWS). We discuss the role technology plays in finding solutions to climate change and why governments need to put policies in place to incentivize organizations to take action.

Transcript:

Transcript:

MATHIAS STECK    Hello and welcome to the 13th series of the DNV Talks Energy Podcast. I'm your host, Mathias Steck. During this series, we'll be exploring some of the key insights from DNV's Energy Transition Outlook, our annual independent model of the world's energy system, and what they mean for the future of our planet. Across the series, with the help of leading industry guests, we'll shed light on what's happening right now and the forecast as we move forwards. We'll explore topics from the geopolitical developments affecting the energy transition to what's needed from technology, finance and policy in delivering net zero. Crucially, we ask -.how do we move from ambition to urgent action over climate change?

For this episode, I'm delighted to be joined by Genevieve Ding, Head of Sustainability Policy, Asia Pacific and Japan, at Amazon Web Services. Together, we'll look at what is needed for world leaders to deliver on their ambitious commitments and accelerate towards a net zero world by 2050. We hope you enjoy the episode.

Welcome to the DNV Talks Energy podcast, Genevieve. It's a pleasure having you with us today.

Transcript:

GENEVIEVE DING    Thank you so much for having me. It's my pleasure to be here.

Transcript:

MATHIAS STECK    Genevieve, to start with, for the benefit of our listeners, could you tell us a bit about your background and your role at Amazon Web Services?

Transcript:

GENEVIEVE DING    Sure. So I first started in sustainability over 12 years ago, when I first started putting together Singapore's national adaptation and mitigation plans, back in the Ministry of Finance. That was in 2010, where people and companies and countries didn't really care that much about climate change at that point in time. So I've been at this space for over a decade, and currently I lead sustainability policy strategy for Asia Pacific and Japan at Amazon Web Services.

Transcript:

MATHIAS STECK    In its latest Energy Transition Outlook, DNV has added a 'pathway to net zero' scenario that outlines what needs to be done by 2050 for the world to close the gap from the most likely 2.2 degrees trajectory to the decreased 1.5 degree future. We know this will require strong policy interventions. What will or should this look like in your view?

Transcript:

GENEVIEVE DING    Yeah, there's quite a few things that governments can do, and the first is to really set ambitious decarbonization targets and work very closely with the private sector to achieve them. So we welcome the increasingly ambitious climate mitigation targets that we see in Asia Pacific and Japan. And I'll focus on that area because that's where we're in. And I think there's so much potential for carbon mitigation. And at Amazon, we also have our own ambitious goals. So, for example, we founded The Climate Pledge, and that is a commitment to reach net zero carbon by 2040, so ten years before the Paris Agreement. And we have over 300 signatories today, including companies like SAP, Microsoft and Visa. And we are also committed to being 100% powered across our operations with renewable energy by 2025. And currently we are 85% powered by renewable energy. So these are ambitious goals.

I'd also like to speak about the Amazon Sustainability Data Initiative and the mission of the Amazon Sustainably Data Initiative is really to lower the cost, the time and the technical barriers to accessing and to analyzing huge datasets related to the climate. So we work with organizations like NASA, the UK Met Office and Japan Meteorological Service to host on the climate related data on our platforms and our systems. And this includes weather forecasts with the data, geospatial data, climate data, forestry and ocean data as well. And what we hope from this is to really democratize access to data and to help researchers and organizations accelerate sustainability transformation by tapping on this data.

The second thing that I think policymakers can do is to focus on clean energy infrastructure and enabling the corporate purchasing of renewable energy. So we see that Asia Pacific, this has been a huge challenge. Renewable energy is much sought after, but there are no regulatory or policy frameworks to encourage this. And in part, this is due to the lack of availability of renewable energy resources, but also undue regulatory complexity and high costs. And we try to work closely with partners in the region to try to unlock and increase the availability of renewable energy. Partners that we work with include the Japan Partners Leadership, as well as the Renewable Energy Demand Enhancement Initiative in India and the Clean Energy Investment Accelerator. And we think that, with these groups, we support regulatory frameworks that incentivize varied, affordable and additional renewable energy beyond what is already available in the grid. Today, Amazon is the world's largest corporate producer of renewable energy. So we have over almost 380 utility-scale renewable energy projects across the world, and that translates to about 2.8 GW of renewable energy. This will translate to the energy use of almost 11.6 million households in Japan, and it's also the equivalent of saving up to 8 billion liters of gasoline. So we think this is a huge potential. And if governments can incentivize the direct purchasing of corporate renewable energy, that would really make a difference.

Last, I think policymakers can adopt clear cloud-first policies to promote cloud migration for immediate decarbonization benefits. I'll go a little bit into this, and that means that our data centers are five times more efficient in the Asia Pacific region as well as in Europe than typical on-premise data centers. So simply by moving workloads from on-premise data centers to the cloud, you're reducing your energy use and associated carbon emissions by almost 80%. And if governments and policymakers implement clear cloud-first policies to encourage the move or the migration of workloads to the cloud, that immediately reduces your carbon footprint.

Transcript:

MATHIAS STECK    So that is impressive initiatives, really, which helps to accelerate the transition. If we take a step back and look at the energy transition overall, we have to appreciate that there's other crises than only the climate change threat, as we see, for example, at the moment, the invasion of the Ukraine by Russia. What do you think are these competing crises doing to the speed and the trajectory of the energy transition?

Transcript:

GENEVIEVE DING    Yeah, thanks so much for that question. I really think that is very pertinent on policymakers' minds. It affects citizens on a daily basis in terms of cost of living. As Jennifer Granholm, the U.S. Secretary for Energy, said in a visit to Singapore recently, the development of renewable energy actually removes States from being held hostage by countries with traditional brown power and brown energy. I think you know which countries we're talking about, but the development of renewable energy really diversifies energy sources and increases energy resilience and security. And I think the energy security challenges that are facing the world right now should actually push policymakers to accelerate policies that accelerate the development of renewable energy infrastructure, as well as incentivizing corporate purchase of renewable energy.

Transcript:

MATHIAS STECK    So you mentioned already some of the collaboration projects where AWS is involved and/or leading them. From your view, how can policymakers kind of boost these cross-industry collaborations and do you have an example, or want to go deeper on one of the examples you gave us already?

Transcript:

GENEVIEVE DING    Yeah, sure. So historically, the problem was ambition, right? We didn't have countries or governments that were ambitious enough about their climate targets. Today, we have seen increasing ambition, even across Asia Pacific and Japan, with zero emission targets continuing to grow. This definitely bodes well. However, the problem right now that we are facing is that the window that we have to combat climate change is narrowing very quickly, and policymakers still haven't landed on how to get there and meet the mitigation targets. So cross-sector industry collaboration is one of the ways to get there. Public private partnerships is one of the ways to get there as well.

And one of the examples that I'll delve into is - is actually using the UN Sustainable Development Goals. So there's 17 of them. Again, I go back to the potential of cloud to accelerate sustainability transformation and to meet all of these 17 United Nations Sustainability Development Goals. So in areas, for example, like agriculture, we find that farmers in Thailand and Pakistan are able to increase their crop yields by 40%, almost 50%, and their profitability by almost 40%, by adopting cloud-enabled remote sensing technology, for instance. In the financial sector space, you see that financial access is now open to the underserved and unbanked, because you have startups who are coming up with innovations that enable the underserved and unbanked to develop credit history. In, for example, health care, we have startups in Indonesia, for example Hello Doc, who use cloud-enabled technologies to connect millions of patients online to thousands of doctors. And we see that the applications of cloud in terms of use cases is so wide and so diverse. And it's really about leveraging cloud-enabled technologies, not just as enabler, but a multiplier to help accelerate sustainability transformation.

Transcript:

MATHIAS STECK    So as you mentioned earlier, AWS in itself is using a lot of renewable energy already. If we look around, the ambition to build out renewables is massive. What do you think about these very large upfront investments which are required for this? Some people say the energy transition is unaffordable. What would you answer to that?

Transcript:

GENEVIEVE DING    I think that's precisely why we need to scale corporate renewable energy procurement, right. Because this means that we can lean in into the very significant purchasing power of corporates to accelerate the clean energy transition. Corporations like Amazon are willing to and are able to afford these large upfront capital costs. And along with these infrastructure developments, we bring along green jobs, capital investment, technology transfer opportunities. And this also applies to any other companies that do invest in renewable energy and infrastructure. And it's precisely because it's costly that we need to lean on the private sector to develop such renewable energy infrastructure. At the same time, there are the multilateral organizations as well, such as the Asian Development Bank, the World Bank, and of course the Green Climate Fund, who are increasingly focused, very much focused on catalyzing blended finance and funding green infrastructure projects that include renewable energy development.

Transcript:

MATHIAS STECK    We know that low income regions need dedicated technologies and financial assistance. We talked about financial systems right now, but for specific countries, what do you think should financial support look like? And do you know about available schemes?

Transcript:

GENEVIEVE DING    That's a good question. So I think I referred to multilateral banks as a source of financing previously. I think private-public partnerships are a huge catalyst as well. For example, Amazon is part of the First Movers Coalition, which is a global initiative harnessing the purchasing power of companies to decarbonize seven hard-to-abate sectors. And this is global and its partnership with the World Economic Forum and the US State Department. We are also part of the UNFCCC Race to Zero, which is a global campaign to rally leadership from businesses, cities, regions, governments and investors for a healthy zero carbon recovery that prevents future threats and creates decent jobs.

I think it's also worth mentioning that just the general investment in low carbon innovation and energy will make a huge difference in lowering costs for technologies that will then be accessible to developing countries and least developed countries. So Amazon has co-founded the Climate Pledge, which I said earlier, it's a commitment to reach net zero carbon by 2040. But as part of that, we also have the Climate Pledge Fund, which is the corporate venture capital arm, with an initial seed funding of USD 2 billion. And that really goes towards investing in low carbon and energy innovation. And some of the investments we've made include investments in green hydrogen. That includes Electric Hydrogen and Sunfire, two of the most promising US- and European-based developers of electrolyzers, which are a key technology that makes emission-free green hydrogen using water and renewable electricity. We also have Amogy, which is developing an ammonia-to-power system that is emission free at the point of use. Also investing in synthetic fuels, for example, in Infinium, that is a net zero carbon diesel and jet fuel manufacturer. And these are just some examples of the cutting-edge energy innovation that we're investing in that hopefully when fully developed, will be accessible as well to least developed and less developing countries.

Transcript:

MATHIAS STECK    So, I asked you earlier about the affordability of the energy transition, and we covered that a little bit from the generation side. You also alluded to smarter solutions when I remember what you said about sending data into the clouds versus on-prem. So, our DNV energy transition outlook finds that we are also now at a point where we have a decoupling of the growth in GDP compared to the growth in the energy cost or the energy demand to achieve the GDP growth. Can you share a few more examples, how we can use technology and data in a smart way to boost the energy transition by, for example, lowering the energy demand but still achieving the same targets, or even better?

Transcript:

GENEVIEVE DING    Sure. So maybe I'll give you the example of TRENDE, which is a peer-to-peer electricity trading startup in Japan. And they're using cloud-enabled technologies to facilitate peer-to-peer electricity trading of solar power to residential customers. So that immediately reduces the cost of renewable energy to residents in Japan. One other example that I love to talk about is Greenko. It's a smart or intelligent utility platform based in India, and it's the world's first gigawatt-scale integrated power project, which integrates solar and wind power, but also pumped storage systems. And they leverage EWS technologies, including IOT, to monitor in real time across the infrastructure assets. And they use cloud-enabled technologies to then manage the dynamic demand and supply of energy across their infrastructure assets. So this helps decarbonize the grid and encourages the use of renewable energy. So we see here that technology is not just an enabler, but it becomes a multiplier when it helps decarbonization beyond individual companies to helping decarbonize entire sectors of the energy grid.

Transcript:

MATHIAS STECK    In January last year, AWS was one of the founding members of an industry pledge to achieve climate neutrality of data centers by 2030. How do you plan to achieve climate neutrality and what can similar organizations actually learn from your journey?

Transcript:

GENEVIEVE DING    So at Amazon, sustainability is top of mind for us, and we're constantly trying to reduce the carbon footprint of our operations first and foremost. So that comes in a couple of ways. And first, it's about increasing the energy efficiency of our data centers. And that comes at both the facility level, which is how data centers are being built and where they're being built, to their server level efficiencies. And I'll go into that in a little bit more detail as well. So on the facility front, it means trying to use the most efficient ways to design buildings. It also means trying to reduce the carbon content in the concrete by using CarbonCure technology, that we're investing in as well. It also includes trying to reduce the carbon content of the steel with which we build our data centers by sourcing steel from electric arc furnace mills. And on the server level, it means, because of our scale, we're able to custom make our own processes and servers to be as efficient as possible. And we're able to really optimize and maximize the utilization of our resources to ensure maximum energy efficiency. And that's why we've got very low PUEs in our data centers across the world.

In addition to that, of course, we are aiming to be 100% powered by renewable energy by 2025. So you add that on to the energy efficiency of our data centers. You'll see that the carbon reduction opportunity is huge. As I mentioned earlier, AWS data centers are five times more energy efficient in Europe and in Asia Pacific, in Japan, than regular on-premise data centers, which means that by simply moving your workloads onto the cloud, you're reducing your energy consumption by almost 80% and your associated carbon footprint as well.

Transcript:

MATHIAS STECK    So, if you look back the last couple of years, we have lost time since COP26. The emissions haven't decreased, they have increased. But now you have shared so many great opportunities with us - how to boost the race to net zero. In your personal opinion, how optimistic are you that we make this race to net zero in time?

Transcript:

GENEVIEVE DING    I was relentlessly optimistic about the future. We know that there is a long way to go to meet our net zero carbon targets, but we believe that we can get there if we collaborate across industries, with partners, with governments, and learn and grow together. And that's why we set up The Climate Pledge, which is this community of over 300 signatories. And aside from that commitment to reach net zero carbon by 2040, they are entering into a community where they can learn from each other, share best practices, share energy innovations. And I think that's where the power is - when you collaborate with people. So I am relentlessly optimistic for the sake of my children. I guess in the next generation, I hope we can get there together.

Transcript:

MATHIAS STECK    Thank you so much for sharing these really encouraging opportunities you see to get to net zero, where we have to be. It was a pleasure having you with us, Genevieve.

Transcript:

GENEVIEVE DING    Thank you so much for your time.

Transcript:

MATHIAS STECK    Thanks for listening to this week's podcast. Genevieve explained how Amazon Web Services is utilizing a wide range of innovative strategies to reduce its carbon footprint. She explained that she sees the role of technology not only as an enabler but as a multiplier when it comes to finding solutions to climate change and also called on governments to put policies in place to ensure ambitious targets for the pace of carbon emission reduction. Join us next week for highlights from this fascinating series, as we hear again from our wonderful guests who contributed so much to our discussion about the paths to net zero.

To hear more podcasts in the series, please visit dnv.com/talksenergy.

 

DNV Talks Energy

All series and episodes