In 1903, TheNew York Times predicted it would take between 1 million and 10 million years to develop airplanes. The Wright Brothers took flight just nine weeks later. In 2023, the same levels of ambition, determination, and innovation will make green flight a reality, and the first commercial passenger planes fueled by hydrogen will take to the skies.
Aviation is the world’s fastest-growing contributor to climate change. According to a report by the International Coalition for Sustainable Aviation, by 2037 we will see an estimated doubling of air passengers to 8.2 billion. And by 2050, the sector could be responsible for as much as 22 percent of our total carbon emissions. We know that we have to cut global emissions in half by 2030—and that means addressing the rising contribution of the aviation sector, and quickly.
My company, ZeroAvia, is tackling the transition to zero-emission aviation through the development of hydrogen-electric engines for airplanes. These use hydrogen in fuel cells to generate electricity, which is then used to power electric motors to turn the aircraft’s propellers. Ultimately, we will put these engines in every type of aircraft—all the way up to large, commercial aircraft.
Why fuel cells? According to McKinsey, electric flight powered by hydrogen offers the best possible reduction in climate impact. Hydrogen fuel cells are between two and three times more energy efficient than current gas-guzzling fuel combustion engines. And the sole byproduct from these engines is water.
Alternatives, such as sustainable aviation fuel, do not tackle the problem of non-carbon emissions. Nitrogen oxides, particulates, soot, and high-temperature water vapor are all potent climate forcing agents. Combined, these have a larger climate change impact than carbon dioxide does alone. But for hydrogen-electric engines, they do not enter the equation.
What about batteries? Too heavy and too inefficient. Research from the University of Houston suggests eight airplanes would be required to carry the batteries needed to power a jumbo jet. What works for a Tesla doesn’t necessarily work for a Dreamliner.
Hydrogen is also abundant—as it can be produced from water—and it will only become cheaper to produce. According to PWC, the cost of green hydrogen will drop by 50 percent by 2030. On-site hydrogen production further lowers prices and makes the entire system zero-emission from end to end.
In 2023, we will finalize the design for the world’s first commercial hydrogen-electric aircraft engine, and we plan to enter the market by the following year. This will unlock commercial zero-emission flights of up to 300 miles, say, London to Glasgow, or San Francisco to Los Angeles. As well as powering new aircraft, hydrogen-electric engines can also be retro-fitted into existing planes, ensuring rapid market entry and enabling us to tackle the sector’s emissions sooner.
While converting the entire industry will take time, the road map is obvious. The UK’s Aerospace Technology Institute’s FlyZero project made it clear that hydrogen will be aviation’s fuel of the future. This year-long independent study commissioned by the UK government established that the first generation of zero-emission aircraft would need to include hydrogen technology by 2025.
The world’s biggest problem requires the farthest-reaching solutions, and support for hydrogen is growing in governments globally. Measures in the US Inflation Reduction Act will turbocharge the hydrogen economy, while the UK’s Jet Zero strategy aims to deliver net-zero aviation by the middle of the century. In 2023, accelerating innovation will meet this increasing political will, and hydrogen electricity will start the process of transforming aviation into a zero-emissions industry in a generation.
A new study in Nature Sustainability incorporates the damages that climate change does to healthy ecosystems into standard climate-economics models. The key finding in the study by Bernardo Bastien-Olvera and Frances Moore from the University of California at Davis:
The models have been underestimating the cost of climate damages to society by a factor of more than five. Their study concludes that the most cost-effective emissions pathway results in just 1.5 degrees Celsius (2.7 degrees Fahrenheit) additional global warming by 2100, consistent with the “aspirational” objective of the 2015 Paris Climate Agreement.
Models that combine climate science and economics, called “integrated assessment models” (IAMs), are critical tools in developing and implementing climate policies and regulations.
In 2010, an Obama administration governmental interagency working group used IAMs to establish the social cost of carbon – the first federal estimates of climate damage costs caused by carbon pollution. That number guides federal agencies required to consider the costs and benefits of proposed regulations.
Economic models of climate have long been criticized by those convinced they underestimate the costs of climate damages, in some cases to a degree that climate scientists consider absurd. Given the importance of the social cost of carbon to federal rulemaking, some critics have complained that the Trump EPA used what they see as creative accounting to slash the government’s estimate of the number. In one of his inauguration day Executive Orders, President Biden established a new Interagency Working Group to re-evaluate the social cost of all greenhouse gases.
IAMs often have long been criticized by those convinced they underestimate the costs of climate damages, in some cases to a degree that climate scientists consider absurd. Perhaps the most prominent IAM is the Dynamic Integrated Climate-Economy (DICE) model, for which its creator, William Nordhaus, was awarded the 2018 Nobel Prize in Economic Sciences.
Judging by DICE, the economically optimal carbon emissions pathway – that is, the pathway considered most cost-effective – would lead to a warming increase of more than 3°C (5.4°F) from pre-industrial temperatures by 2100 (under a 3% discount rate). IPCC has reported that reaching this level of further warming could likely result in severe consequences, including substantial species extinctions and very high risks of food supply instabilities.
In their Nature Sustainability study, the UC Davis researchers find that when natural capital is incorporated into the models, the emissions pathway that yields the best outcome for the global economy is more consistent with the dangerous risks posed by continued global warming described in the published climate science literature.
Accounting for climate change degrading of natural capital
Natural capital includes elements of nature that produce value to people either directly or indirectly. “DICE models economic production as a function of generic capital and labor,” Moore explained via email. “If instead you think natural capital plays some distinct role in economic production, and that climate change will disproportionately affect natural capital, then the economic implications are much larger than if you just roll everything together and allow damage to affect output.”
Bastien-Olvera offered an analogy to explain the incorporation of natural capital into the models: “The standard approach looks at how climate change is damaging ‘the fruit of the tree’ (market goods); we are looking at how climate change is damaging the ‘tree’ itself (natural capital).” In an adaptation of DICE they call “GreenDICE,” the authors incorporated climate impacts on natural capital via three pathways:
The first pathway accounts for the direct influence of natural capital on market goods. Some industries like timber, agriculture, and fisheries are heavily dependent on natural capital, but all goods produced in the economy rely on these natural resources to some degree.
According to GreenDICE, this pathway alone more than doubles the model’s central estimate of the social cost of carbon in 2020 from $28 per ton in the standard DICE model to $72 per ton, and the new economically optimal pathway would have society limit global warming to 2.2°C (4°F) above pre-industrial temperatures by 2100.
The second pathway incorporates ecosystem services that don’t directly feed into market goods. Examples are the flood protection provided by a healthy mangrove forest, or the recreational benefits provided by natural places.
In the study, this second pathway nearly doubles the social cost of carbon once again, to $133 per ton in 2020, and it lowers the most cost-effective pathway to 1.8°C (3.2°F) by 2100. Finally, the third pathway includes non-use values, which incorporate the value people place on species or natural places, regardless of any good they produce. The most difficult to quantify, this pathway could be measured, for instance, by asking people how much they would be willing to pay to save one of these species from extinction.
In GreenDICE, non-use values increase the social cost of carbon to $160 per ton of carbon dioxide in 2020 (rising to about $300 in 2050 and $670 per ton in 2100) and limit global warming to about 1.5°C (2.8°F) by 2100 in the new economically optimal emissions pathway. (Note for economics wonks – the model runs used a 1.5% pure rate of time preference.)
Climate economics findings increasingly reinforce Paris targets
It may come as no surprise that destabilizing Earth’s climate would be a costly proposition, but key IAMs have suggested otherwise. Based on the new Nature Sustainability study, the models have been missing the substantial value of natural capital associated with healthy ecosystems that are being degraded by climate change.
Columbia University economist Noah Kaufman, not involved in the study, noted via email that as long as federal agencies use the social cost of carbon in IAMs for rulemaking cost-benefit analyses, efforts like GreenDICE are important to improving those estimates. According to Kaufman, many papers (including one he authored a decade ago) have tried to improve IAMs by following a similar recipe: “start with DICE => find an important problem => improve the methodology => produce a (usually much higher) social cost of carbon.”
For example, several other papers published in recent years, including one authored by Moore, have suggested that, because they neglect ways that climate change will slow economic growth, IAMs may also be significantly underestimating climate damage costs. Poorer countries – often located in already-hot climates near the equator, with economies relying most heavily on natural capital, and lacking resources to adapt to climate change – are the most vulnerable to its damages, despite their being the least responsible for the carbon pollution causing the climate crisis.
Another recent study in Nature Climate Change updated the climate science and economics assumptions in DICE and similarly concluded that the most cost-effective emissions pathway would limit global warming to less than 2°C (3.6°F) by 2100, without even including the value of natural capital. Asked about that paper, Bastien-Olvera noted, “In my view, the fact that these two studies get to similar policy conclusions using two very different approaches definitely indicates the urgency of cutting emissions.”
Recent economics and climate science research findings consistently support more aggressive carbon emissions efforts consistent with the Paris climate targets.
Wesleyan University economist Gary Yohe, also not involved in the study, agreed that the new Nature Sustainability study “supports growing calls for aggressive near-term mitigation.” Yohe said the paper “provides added support to the notion that climate risks to natural capital are important considerations, especially in calibrating the climate risk impacts of all sorts of regulations like CAFE standards.”
But Yohe said he believes that considering the risks to unique and threatened systems at higher temperatures makes a more persuasive case for climate policy than just attempting to assess their economic impacts. In a recent Nature Climate Change paper, Kaufman and colleagues similarly suggested that policymakers should select a net-zero emissions target informed by the best available science and economics, and then use models to set a carbon price that would achieve those goals.
Their study estimated that to reach net-zero carbon pollution by 2050, the U.S. should set a carbon price of about $50 per ton in 2025, rising to $100 per ton by 2030. However climate damages are evaluated, whether through a more complete economic accounting of adverse impacts or via risk-based assessments of physical threats to ecological and human systems, recent economics and climate science research findings consistently support more aggressive carbon emissions efforts consistent with the Paris climate targets.
More companies are investing in renewable energy to power their operations and offset their carbon emissions...Getty Images
EBay at its very core pioneered the circular economy — of finding new homes for treasures that might otherwise have ended up at the dump. “Avoiding items going into a landfill is very important to our customers,” says Steve Priest, CFO of eBay. “Driving the circular economy is part of everything we do.” But finding new shelves for Beanie Babies is just a small component in eBay’s sustainability efforts, which prioritize slashing greenhouse gas emissions.
In eBay’s case, these are mostly tied to electricity used to power vast data centers. Since 2017 eBay has cut its carbon emissions by 29% to 88,000 tons per year. The e-commerce giant became carbon neutral this year, and is aiming to achieve a 100% renewable electricity supply for all its offices and data centers by 2025.
This goal might actually be attainable in the next few years as eBay’s biggest clean energy projects yet come online. The White Mesa Wind Project in Texas (a joint venture with Apple, Sprint and Samsung) began operating this year, producing 75 peak megawatts for the four companies, enough to power 20,000 homes.
Meanwhile the Ventress Solar Project in Louisiana, a virtual purchase power agreement between eBay, McDonalds and BP’s Lightsource division, will generate 345 MW. “We collaborate with our tech peers when some sustainability issues come up, where banding together makes more sense,” says eBay’s chief sustainability officer Renee Morin.
Such efforts have earned eBay the no. 11 spot on our inaugural Forbes Green Growth 50 list. Using emissions data from Sustainalytics and financial data from FactSet Research Systems, we honed in on U.S. companies with market caps greater than $5 billion, that started with more than 100,000 tons of carbon dioxide equivalent emissions in 2017, and have since successfully reduced their emissions while simultaneously growing profitability (as measured by an absolute increase in net income or operating income from 2017-2020).
Going in, we figured these criteria would produce a list of more than 100 companies. But green growth is harder than it looks — both Weyerhaeuser and Edison International, ranking no. 21 and no. 10 on our list, grew earnings less than 2% since 2017.
Is there a connection between cutting carbon emissions and boosting earnings? eBay’s Priest thinks we’ve reached the point where companies that don’t care about green will find it nearly impossible to deliver growth. “Customers want to be associated with corporations that take their environmental responsibilities very seriously. Those that do will continue to drive loyalty from their customer base.”
This is a strategic emphasis echoed by Stephan Tanda, CEO of Aptar, which took the no. 1 spot on the Green Growth 50. Aptar makes myriad drug delivery systems and dispensing products for consumer goods, especially foods and cosmetics. “We look at everything we do through a sustainability lens.” Most of Aptar’s facilities in Europe are already certified landfill free. By the end of the year Aptar is looking to achieve “80% disposal avoidance.”
It’s a business that involves reconciling contradictions — most of their products are plastic, which he says actually has a pretty low carbon footprint relative to alternative containers. A new Aptar product is a “monomaterial” lotion pump with no metal parts, entirely recyclable.
Consumer demand for such new products is arguably more impactful than the kind of government policy circus on display at the recent COP26 meetings in Glasgow, Scotland.
“Governments don’t impact what we do that much. Consumers and patients and customers demand what we do,” says Tanda. They will pay for the carbon transition because it is what they want. Listening to the consumers is how Tanda aims to “future proof our business.”
That approach has worked for electricity giant AES, which landed no. 15 on the Green Growth 50 list after reducing emissions by 22%, replacing coal-fired power plants with wind, solar and batteries — “a winning combination that can decarbonize 90% of the grid,” says Chris Shelton, president of AES Next. Because the costs of renewables kept going down, they were able to shift customers over under a “green, blend and extend” program.
AES also operates a kind of inhouse venture capital operation. Its Fluence utility-scale battery joint venture with Siemens recently went public and now sports a $6 billion market cap — the company behind some of the biggest battery installations in the world.
There used to be a large group of companies “in denial” about mitigating greenhouse gas emissions. “That group is vanishing fast,” with companies moving over to the “bargaining” group, where they want to know the minimum they have to do to get by and keep activists off their back — that’s the insight of Chris Romer, cofounder of Project Canary, which installs laser-based sensors at industrial sites to monitor methane leakages.
The landmark ESG moment, he says, was last year’s ExxonMobil annual meeting, where shareholders voted in more green-friendly board members. There’s no going back. Romer says manufacturers can already earn multiples of their monitoring and certification costs by selling “green” products at a premium.
Even on the Green Growth 50, some companies are less enthusiastic than others. Nicotine giant Altria for example, positioned at no. 35 on our list, seems to be doing just enough, having cut emissions by 10% in the studied time period. But according to its most recent sustainability report, Altria’s renewable energy use is just 2.3% of its total, a surprisingly meager ratio.
Altria also demonstrates how hard it can be to stick to a well intentioned program. The company was making great strides toward reducing the amount of waste it was sending to the landfill. In 2018 it nearly hit its 21 million pounds goal. But 2019 wrecked the trend, when Altria delivered 87 million tons to landfill — mostly rubble from a headquarters renovation. Their next challenge: reducing litter from cigarette butts.
Stronger performers included Eli Lilly, which ranked eighth on our list after the pharmaceutical company swapped out old light bulbs for LEDs at three plants, saving 330 mwh per year. And Bristol Myers Squibb, which heats its Munich, Germany office building with 100% geothermal energy, found itself at no. 13. Church & Dwight, parent company of Arm & Hammer, has meanwhile placed third on the list, having achieved its goals of no more PVC in packaging, and offsets carbon emissions by planting millions of trees in the Mississippi River Valley.
I’m an assistant editor based in New York covering money and markets for Forbes. In the past, I covered minority communities for the Boston Business Journal
CREDIT: PETER AND MARIA HOEY -Plant-based meats claim to offer the sensory experience of real meat at a fraction of the environmental cost. Are they really as green as they say?
Marketed to meat lovers, plant-based burgers like Impossible and Beyond claim to taste like the real thing and to have far lighter environmental footprints. Here’s what the numbers have to say.
If you’re an environmentally aware meat-eater, you probably carry at least a little guilt to the dinner table. The meat on our plates comes at a significant environmental cost through deforestation, greenhouse gas emissions, and air and water pollution — an uncomfortable reality, given the world’s urgent need to deal with climate change.
That’s a big reason there’s such a buzz today around a newcomer to supermarket shelves and burger-joint menus: products that look like real meat but are made entirely without animal ingredients. Unlike the bean- or grain-based veggie burgers of past decades, these “plant-based meats,” the best known of which are Impossible Burger and Beyond Meat, are marketed heavily toward traditional meat-eaters. They claim to replicate the taste and texture of real ground meat at a fraction of the environmental cost.
If these newfangled meat alternatives can fill a large part of our demand for meat — and if they’re as green as they claim, which is not easy to verify independently — they might offer carnivores a way to reduce the environmental impact of their dining choices without giving up their favorite recipes.
That could be a game-changer, some think. “People have been educated a long time on the harms of animal agriculture, yet the percentage of vegans and vegetarians generally remains low,” says Elliot Swartz, a scientist with the Good Food Institute, an international nonprofit organization that supports the development of alternatives to meat. “Rather than forcing people to make behavior changes, we think it will be more effective to substitute products into their diets where they don’t have to make a behavior switch.”
There’s no question that today’s meat industry is bad for the planet. Livestock account for about 15 percent of global greenhouse gas emissions both directly (from methane burped out by cattle and other grazing animals and released by manure from feedlots and pig and chicken barns) and indirectly (largely from fossil fuels used to grow feed crops). Indeed, if the globe’s cattle were a country, their greenhouse gas emissions alone would rank second in the world, trailing only China.
Worse yet, the United Nations projects that global demand for meat will swell by 15 percent by 2031 as the world’s increasing — and increasingly affluent — population seeks more meat on their plates. That means more methane emissions and expansion of pastureland and cropland into formerly forested areas such as the Amazon — deforestation that threatens biodiversity and contributes further to emissions.
Global demand for meat continues to rise with little sign of slowing. Much of the increase comes from middle-income countries, where consumers use their increasing wealth to put more meat on their plates.
Not all kinds of meat animals contribute equally to the problem, however. Grazing animals such as cattle, sheep and goats have a far larger greenhouse gas footprint than non-grazers such as pigs and chickens. In large part that’s because only the former burp methane, which happens as gut microbes digest the cellulose in grasses and other forage.
Pigs and chickens are also much more efficient at converting feed into edible flesh: Chickens need less than two pounds of feed, and pigs need roughly three to five pounds, to put on a pound of body weight. (The rest goes to the energy costs of daily life: circulating blood, moving around, keeping warm, fighting germs and the like.) Compare that to the six to 10 pounds of feed per pound of cow.
As a result, the greenhouse gas emissions of beef cattle per pound of meat are more than six times those of pigs and nearly nine times those of chicken. (Paradoxically, grass-fed cattle — often thought of as a greener alternative to feedlot beef — are actually bigger climate sinners, because grass-fed animals mature more slowly and thus spend more months burping methane.)
Building fake meat
Plant-based meats aim to improve on that dismal environmental performance. Stanford University biochemist Pat Brown, for example, founded Impossible Foods after asking himself what single step he could take to make the biggest difference environmentally. His answer: Replace meat.
Researchers trawled through the scientific literature to find every available study measuring the greenhouse-gas footprint of meats and meat alternatives. Beef is by far the most emissions-heavy option, while plant-based meats and plant foods generally are linked to much lower levels of greenhouse gas emissions for production of a given quantity of protein. In the chart, (n) refers to the number of studies for each category of protein.
To do that, Impossible and its competitors basically deconstruct meat into its component parts, then build an equivalent product from plant-based ingredients. The manufacturers start with plant protein — mostly soy for Impossible, pea for Beyond, and potato, oat or equivalent proteins for others — and add carefully selected ingredients to simulate meat-like qualities. Most include coconut oil for its resemblance to the mouthfeel of animal fats, and yeast extract or other flavorings to add meaty flavors. Impossible even adds a plant-derived version of heme, a protein found in animal blood, to yield an even more meat-like appearance and flavor.
All this requires significant processing, notes William Aimutis, a food protein chemist at North Carolina State University, who wrote about plant-based proteins in the 2022 Annual Review of Food Science and Technology. Soybeans, for example, are typically first milled into flour, and then the oils are removed. The proteins are isolated and concentrated, then pasteurized and spray-dried to yield the relatively pure protein for the final formulation. Every step consumes energy, which raises the question: With all this processing, are these meat alternatives really greener than what they seek to replace?
To answer that question, environmental scientists conduct what’s known as a life cycle analysis. This involves taking each ingredient in the final product — soy protein, coconut oil, heme and so forth — and tracing it back to its origin, logging all the environmental costs involved. In the case of soy protein, for example, the life cycle analysis would include the fossil fuels, water and land needed to grow the soybeans, including fossil fuel emissions from the fertilizer, pesticides and transportation to the processing plant. Then it would add the energy and water consumed in milling, defatting, protein extraction and drying.
Similar calculations would apply to all the other ingredients, and to the final process of assembly and packaging. Put it all together, and you end up with an estimate of the total environmental footprint of the product.
Plant-based meats are highly processed products in which proteins, fats, starches, thickeners, flavoring agents and other ingredients are mixed and formed into foods that resemble traditional meat products such as burgers, hot dogs and chicken nuggets.
Unfortunately, not all those numbers are readily available. For many products, especially unique ones like the new generation of plant-based meats, product details are secrets closely held by the companies involved. “They will know how much energy they use and where they get their fat and protein from, but they will not disclose that to the general public,” says Ricardo San Martin, a chemical engineer who codirects the Alternative Meats Lab at the University of California, Berkeley. As a result, most life cycle analyses of plant-based meat products have been commissioned by the companies themselves, including both Beyond and Impossible. Outsiders have little way of independently verifying them.
Even so, those analyses suggest that plant-based meats offer clear environmental advantages over their animal-based equivalents. Impossible’s burger, for example, causes just 11 percent of the greenhouse gas emissions that would come from an equivalent amount of beef burger, according to a study the company commissioned from the sustainability consulting firm Quantis. Beyond’s life cycle analysis, conducted by researchers at the University of Michigan, found their burger’s greenhouse gas emissions were 10 percent of those of real beef.
Indeed, when independent researchers at Johns Hopkins University decided to get the best estimates they could by combing through the published literature, they found that in the 11 life cycle analyses they turned up, the average greenhouse gas footprint from plant-based meats was just 7 percent of beef for an equivalent amount of protein. The plant-based products were also more climate-friendly than pork or chicken — although less strikingly so, with greenhouse gas emissions just 37 percent and 57 percent, respectively, of those for the actual meats.
Similarly, the Hopkins team found that producing plant-based meats used less water: 23 percent that of beef, 11 percent that of pork and 24 percent that of chicken for the same amount of protein. There were big savings, too, for land, with the plant-based products using 2 percent that of beef, 18 percent that of pork and 23 percent that of chicken for a given amount of protein. The saving of land is important because, if plant-based meats end up claiming a significant market share, the surplus land could be allowed to revert to forest or other natural vegetation; these store carbon dioxide from the atmosphere and contribute to biodiversity conservation. Other studies show that plant-based milks offer similar environmental benefits over cow’s milk (see Box).
Researchers compared the amount of land needed to produce a given amount of protein for meat, plant-based meat and plant foods. Once again, beef towers above the rest, largely because grazing animals need a lot of land to forage. Plant foods are shown to require more land than plant-based meats, but this difference is not meaningful because the estimates for plant foods include crops grown in low-yielding countries, while plant-based meats rely on ingredients grown under high-yield conditions.
A caution on cultivation methods
Of course, how green plant-based meats actually are depends on the farming practices that underlie them. (The same is true for meat itself — the greenhouse gas emissions generated by a pound of beef can vary more than tenfold from the most efficient producers to the least.) Plant-based ingredients such as palm oil grown in plantations that used to be rainforest, or heavily irrigated crops grown in arid regions, cause much more damage than more sustainably raised crops. And cultivation of soybeans, an important ingredient for some plant-based meats, is a major contributor to Amazon deforestation.
However, for most ingredients it seems likely that even poorly produced plant-based meats are better, environmentally, than meat from well-raised livestock. Plant-based meats need much less soy than would be fed to actual livestock, notes Matin Qaim, an agricultural economist at the University of Bonn, Germany, who wrote about meat and sustainability in the 2022 Annual Review of Resource Economics. “The reason we’re seeing deforestation in the Amazon,” he explains, “is because the demand for food and feed is growing. When we move away from meat and more toward plant-based diets, we need less area in total, and the soybeans don’t necessarily have to grow in the Amazon.”
But green as they are, plant-based meats have a few hurdles to clear before they can hope to replace meat. For one thing, plant-based meats currently cost an average of 43 percent more than the products they hope to replace, according to the Good Food Institute. That helps to explain why plant-based meats account for less than 1 percent of meat sales in the US. Advocates are optimistic that the price will come down as the market develops, but it hasn’t happened yet. And achieving those economies of scale will take a lot of work: Even growing to a mere 6 percent of the market will require a $27 billion investment in new facilities, says Swartz.
Steak hasn’t yet been well done
In addition, all of today’s plant-based meats seek to replace ground-meat products like burgers and chicken nuggets. Whole-muscle meats like steak or chicken breast have a more complex, fibrous structure that the alt-meat companies have not yet managed to mimic outside the lab.
Part of the problem is that most plant proteins are globular in shape, while real muscle proteins tend to form long fibers. To form a textured meat-like product, scientists essentially have to turn golf balls into string, says David Julian McClements, a food scientist at the University of Massachusetts, Amherst, and an editor of the Annual Review of Food Science and Technology. There are ways to do that, often involving high-pressure extrusion or other complex technology, but so far no one has a whole-muscle product ready for market. (A fungal product, sold for decades in some countries as Quorn, is naturally fibrous, but its sales have never taken off in the US. Other companies are also working on meat substitutes based on fungal proteins.)
The environmental impact of the two leading plant-based burgers, from Impossible Foods and Beyond Meat, is much less than a comparable beef burger, according to detailed studies commissioned by the two companies. Other experts note that these studies are difficult to verify independently because they rely on proprietary information from the companies.
McClements is experimenting with another approach to make plant-based bacon: creating separate plant-based analogs of muscle and fat, then 3D-printing the distinctive marbling of the bacon. “I think we’ve got all the elements to put it together,” he says.
Some critics also note that a shift toward plant-based meat may reinforce the industrialization of global food systems in an undesirable way. Most alternative meat products are formulated in factories, and their demand for plant proteins and other ingredients favors Big Agriculture, with its well-documented problems of monoculture, pesticide use, soil erosion and water pollution from fertilizer runoff. Plant-based meats will reduce the impact of these unsustainable farming practices, but they won’t eliminate them unless current farming practices change substantially.
Of course, all the to-do about alternative meats overlooks another dietary option, one with the lowest environmental footprint of all: Simply eat less meat and more beans, grains and vegetables. The additional processing involved in plant-based meats means that they generate 4.6 times more greenhouse gas than beans, and seven times more than peas, per unit of protein, according to the Hopkins researchers. Even traditional, minimally processed plant protein such as tofu beats plant-based meats when it comes to greenhouse gas. Moreover, most people in wealthy countries eat far more protein than they need, so they can simply cut back on their protein consumption without seeking out a replacement.
But that option may not appeal to the meat-eating majority today, which makes alternative meats a useful stopgap. “Would I prefer that people were eating beans and grains and tofu, and lots of fruits and vegetables? Yes,” says Bonnie Liebman, director of nutrition at the Center for Science in the Public Interest, an advocacy organization supporting healthy eating.
“But there are a lot of people who enjoy the taste of meat and are probably not going to be won over by tofu. If you can win them over with Beyond Meat, and that helps reduce climate change, I’m all for it.”
The Inflation Reduction Act is the Walt Whitman of federal legislation: like the great American poet, the bill contradicts itself; it is large and contains multitudes. It represents the most significant climate investment in U.S. history, but it also paves the way for a massive expansion of oil and gas drilling on federal lands and in federal waters.
It includes a new minimum tax designed to ensure that large corporations pay at least 15 percent of their profits to the federal government, but it also showers corporations in tax subsidies that will push many more firms’ tax rates below 15 percent (and in some cases below zero). It is disappointingly modest in its aspirations, but it will arguably be—along with the Affordable Care Act—the most ambitious piece of legislation signed by a Democratic president in more than a half century.
Advocates for climate action and tax fairness should celebrate the bill’s enactment, which will likely occur later this week, after the House votes on the measure. But they should not exaggerate the bill’s accomplishments or sugarcoat the compromises that Democrats made to secure the support of swing senators. Glorifying the Inflation Reduction Act would, moreover, lead Democrats to draw the wrong lessons from the bill’s phoenix-like rise out of the legislative ashes. The bill succeeded not in spite of its shortcomings, but because of them.
Emissions and Prescriptions
The sprawling legislation—spanning more than 700 pages—is difficult to summarize succinctly, but if one had to choose a three-word phrase to describe the bill, “Inflation Reduction Act” would not be it. Moody’s Analytics, whose estimates are oftencitedby President Biden, projects that the Consumer Price Index, a key inflation gauge, will be 0.33 percent lower at the end of 2031 on account of the legislation—a reduction in the inflation rate of approximately 0.03 percentage points per year.
For comparison’s sake, CPI inflation was 9.1 percent in the twelve months ending in June 2022. So the bill will likely reduce inflation (as advertised), but the effect will be a drop in the bucket—a very small drop in a very large bucket. A better three-word summary would be “Climate, Medicine, Taxes.” To a first approximation, the bill amounts to a $370 billion climate investment paid for by prescription drug savings and tax changes. The bill’s three baskets can be analyzed separately, but the baskets are so tightly woven together that any normative assessment of the legislation must account for all three.
Let’s start with climate. The bill lays out a smorgasbord of tax credits for clean energy, nuclear power production, electric vehicles, and other technologies that will accelerate the transition to a low-carbon economy. According to estimates from the Rhodium Group, U.S. greenhouse gas emissions in 2030 will be 40 percent below 2005 levels if Congress enacts the bill—compared to 30 percent below 2005 levels if Congress does not act. That’s a meaningful difference. It implies that U.S. emissions will be approximately 14 percent lower in 2030 with the bill than without.
But the claim by Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin III (D-W.V.)—repeated by House Speaker Nancy Pelosi (D-Cal.) on Sunday—that the bill will “reduce carbon emissions by roughly 40 percent by 2030” is misleading at best. Three-quarters of that 40 percent reduction has nothing to do with the bill. And the legislation still falls short of fulfilling the United States’ commitment under the Paris Agreement to cut emissions to half of 2005 levels by the end of this decade. In other words, the Inflation Reduction Act is a down payment on our Paris pledge, but a large balance remains due.
Most troublingly, the bill bars the Interior Department from issuing any new right-of-way for wind or solar energy development for a decade unless the department also offers up a total of 20 million acres of land and 600 million acres of ocean area for oil and gas leasing. To put those acreages in perspective, 20 million acres is roughly the size of South Carolina; 600 million acres is more than Alaska and Texas combined. “Drill, baby, drill”—once a slogan of Republican vice presidential candidate Sarah Palin—is about to become official federal policy.
If there is a saving grace, it’s that the giveaway to oil and gas firms is so extravagant that most of the acres offered for leasing won’t attract any bids. Still, the irony of an oil and gas drilling expansion in a bill that aims to reduce U.S. carbon emissions is rich. If this was the price of Manchin’s backing, then it was a price worth paying. But Manchin’s support certainly did not come cheap.
An Offer that Drug Companies Can’t Refuse
The medical portion of the bill represents a real achievement—though again, it is an achievement that comes with caveats. The bill extends a pandemic program that reduced health insurance premiums for 13 million low- and middle-income Americans, but the extension lasts only three years, after which individuals and families who purchase health insurance through Obamacare exchanges will face another benefits cliff.
The bill also facilitates free access to adult vaccines for Medicare and Medicaid beneficiaries, and it imposes a $2,000-per-year cap on out-of-pocket drug costs under Medicare Part D. But even as it makes federally subsidized health insurance more generous to current enrollees, the bill still leaves more than 2 million low-income adults in a “coverage gap”—too poor to claim credits on the Obamacare exchanges, but ineligible for Medicaid under their own state’s laws.
The bill’s medical cost savings come primarily from a provision that requires pharmaceutical and biotechnology companies to accept steep price cuts for a handful of prescription drugs purchased through Medicare. The bill describes this as the “Drug Price Negotiation Program,” but “negotiation” is somewhat of a euphemism. The manufacturer of a drug selected for “negotiation” must accede to Medicare’s proposed price or else pay a 1,900 percent excise tax on all sales of the drug. That’s a negotiation only in the Vito Corleone sense—an offer one can’t refuse.
Drugmakers complain that the Medicare price cuts will discourage investment, resulting in fewer new cures and treatments. That’s about as true as the claim that the Inflation Reduction Act will reduce inflation—it’s probably correct, but the effect is likely to be marginal. The Congressional Budget Office estimates that the number of new drugs approved over the next 30 years will be approximately 1 percent lower as a result of the legislation.
Without trivializing the consequences for patients who would otherwise stand to benefit from those drugs, that’s a cost worth bearing if it makes space in the budget for transformative climate investments.
Tax Changes and an IRS Infusion
The biggest revenue raiser in the bill—according to the Congressional Budget Office’s analysis—is a new 15 percent minimum tax on the “book income” of large corporations. “Book income” refers to the earnings that corporations report to investors under generally accepted accounting principles. If large corporations pay less than 15 percent of their accounting profits under normal tax rules, then the 15 percent minimum tax potentially kicks in.
Manchin told Fox News Sunday that the new 15 percent minimum tax “does not raise taxes.” He added: “I’ve made sure that there are no tax increases in this whatsoever.” That’s an absurd claim. Corporations often pay less than 15 percent of their profits in taxes for entirely legitimate reasons—for example, because the tax code allows writeoffs for depreciation and stock compensation in different years than when those deductions are permitted for accounting purposes. For those corporations, the Inflation Reduction Act certainly does raise taxes—to the tune of $313 billion over 10 years.
The burden of the new corporate minimum tax will be borne in large part by high-income households that own stock. Raising taxes on large corporations and using the revenue to help avert a climate catastrophe is, on balance, a good trade. But President Biden’s claim that the bill “ends” the practice of profitable Fortune 500 companies paying no corporate income tax is just not correct. Carveouts for various business tax credits ensure that many corporations will continue to pay sub-15 percent rates. Indeed, the clean energy credits in the Inflation Reduction Act will likely cause many profitable electric utilities to pay zero or less in federal income tax.
Other tax provisions in the bill are more praiseworthy. A new 1 percent excise tax on corporate stock buybacks marks an important step toward plugging a gap in current law that allows foreign investors—and some U.S. shareholders—to avoid U.S. tax on corporate cash distributions when those payouts take the form of stock repurchases rather than traditional dividends. An $80 billion increase to the budget of the Internal Revenue Service will help to restore an agency that has been starved for cash in recent years, and the expenditure will likely pay for itself several times over.
But the bill fails to deliver on Democrats’ larger tax reform ambitions. A last-minute decision to preserve a tax preference for the private equity industry—part of a deal to win over Sen. Kyrsten Sinema (D-Ariz.)—was just the latest way in which Democrats scaled back the bill’s tax components. Ultimately, the Inflation Reduction Act does virtually nothing to curtail the strategies that enable some billionaires to pay near-zero personal income tax rates.
If there is one lesson to be drawn from the Inflation Reduction Act, it’s that passing major legislation through a closely divided Congress will often require self-contradiction. The bill is a devil’s bargain, but if it were ideologically pure, it would also be a dead letter. That’s no justification for making misleading statements about the bill’s contents, as top Democrats unfortunately have. But a clear-eyed view of the bill’s achievements and shortcomings serves to emphasize the fact that here, as elsewhere, the perfect and the good are enemies. Thankfully, the good appears to have won out this time.
Illustration: Ben Boothman
