Amazon’s total greenhouse gas emissions increased 15% in 2019, even as the commerce giant continues emissions-reduction efforts, including with a new $2 billion investment fund announced Tuesday.
The company noted that its emissions per dollar of gross merchandise sales — a measure of emissions intensity that Amazon says it uses to benchmark its climate performance, but which others say obscures the more important rise in absolute emissions — actually decreased 5% from 2018.
Each dollar spent with Amazon in 2019 resulted in the release of about 123 grams of climate-warming gases, compared to 129 grams per dollar in 2018, the company said.
That emissions intensity metric includes greenhouse gases stemming from Amazon’s activities in moving goods to customers, and from the manufacture of its own products. Amazon doesn’t count the emissions from manufacturing of products by other companies, even though it counts sales of those products in calculating its emissions per dollar. The company declined to disclose its gross merchandise sales.
“The problem is, they really haven’t talked about supply chain emissions,” said Aseem Prakash, a professor of political science at the University of Washington and founding director of the UW Center for Environmental Politics. He added that a truer accounting would include “the carbon footprint of everything they sell.”
Prakash stressed the importance of clarity and transparency in Amazon’s climate accounting. “Amazon is a market leader and people look to Amazon for cues on what is appropriate behavior,” he said.
Amazon does account for manufacturing and supply chain emissions from its own branded products — such as its electronic devices and private-label goods — and customer use of its electronic devices in its companywide total.
The company’s emissions from its own supply chain, as well as emissions from fossil fuels, electricity purchases and capital spending on things like servers and construction all increased in 2019 to 51.17 million metric tons of carbon dioxide equivalent (CO2e), even as economywide emissions appeared to flatten.
The International Energy Agency estimated in February that emissions from energy production (the largest source of human-caused emissions) in 2019 were unchanged from 2018, at about 33.3 gigatons of CO2e, the standard measure of greenhouse gas emissions.
Amazon is accelerating its timeline to reach 100% renewable energy use and investing in electric vehicles — part of a broad portfolio of strategies, including packaging improvements, recycling and reuse programs — in a bid to reverse its emissions increases. The company last September set a goal to be carbon neutral, meaning some amount of ongoing emissions will continue, to be canceled out with spending on things like forest protection, in 2040, 10 years ahead of what’s called for in the Paris Agreement.
“It will take several years for the carbon reduction benefits of these investments to be fully reflected in our carbon footprint,” Amazon said in its sustainability report, released Tuesday. “Over time, both our carbon intensity and our absolute carbon footprint will drop as we continue to make progress toward net zero carbon.”
Critics see a fundamental contradiction as Amazon, along with cloud-computing competitor Microsoft, continues selling technology services to fossil fuels companies.
A Greenpeace report on cloud computing last month highlighted how Amazon Web Services, Microsoft and Google provide advanced technologies to serve the entire fossil fuels supply chain, noting that the business they do to enable new production directly undermines their efforts to reduce their own emissions. Microsoft set a new goal earlier this year to become “carbon negative” by 2030 — meaning it would fund projects that remove or avoid more greenhouse gases than it emits — and offset all its historical emissions by 2050.
“The world has discovered more fossil fuels than we can safely use,” Greenpeace said in its report. “Any new oil and gas projects or infrastructure are very likely inconsistent with the Paris Climate goals.”
Google in May announced it would no longer develop new technologies for the oil and gas industry.
Amazon’s sustainability report does not address its business with the fossil fuels industry.
“That’s the big elephant in the room,” Prakash said. “On one hand you want to be a climate leader, which is excellent, but on the other hand, you’re allowing the fossil fuel industry to leverage your technology to create more emissions.”
Amazon is betting heavily on new and existing low-carbon technologies to avoid or reduce emissions.
Its $2 billion Climate Pledge Fund — separate from a $10 billion fund founder and CEO Jeff Bezos announced earlier this year — comes atop earlier investments in companies including Rivian, which is making electric delivery vans. Amazon has ordered 100,000 of them, which the company expects to reduce emissions by 4 million metric tons a year by 2030. An initial 10,000 vans are to be on the road in 2022. The company is working on electrification of other vehicles, including delivery rickshaws in India and heavier trucks and equipment.
The new fund, which Amazon hopes other signatories to its Climate Pledge will join, will make investments in companies of all sizes working in transportation, logistics, energy generation and storage, manufacturing and materials, food and agriculture and other industries.
It follows a $1 billion fund announced by Microsoft in January to invest in carbon removal technologies over the next four years.
“I love watching the tit-for-tat going between Amazon and Microsoft on this,” said Eric Berman, president of E8, an early stage investment group focused on clean technology and sustainability for the last 14 years. “They’re each trying to one-up each other and I think that is a fantastic thing.”
Amazon is also spending heavily on large-scale renewable energy projects and sent a strong signal about its view of the business case for wind and solar energy with a new goal to power its operations with 100% renewable energy by 2025, five years ahead of the timeline it targeted last fall. The company said 42% of its electricity came from renewable sources in 2019.
That acceleration, Berman said, “suggests that they can do this profitably. … As the price of renewables has fallen below the price of fossil fuels, there’s no turning back.”