We Haven’t Solved Flying’s Carbon Problem

Flying produces about 2% of global carbon emissions. Despite articles implying the possibility of sustainable flight, there’s currently no viable solution to flying without fossil fuels.

So what are airlines doing now that social pressure is increasing to address flying’s unsustainability?

Strategies so far:

  • Use biofuels
  • Increase efficiency
  • Shift responsibility from airlines to consumers
  • Offset emissions

Biofuels are plant-based fuel to power aircraft. Biofuels exist, but making them produces carbon emissions from agriculture, so they’re not carbon-free. If biofuel demand increases, more land could be converted to agriculture, and land conversion can also increase carbon emissions through deforestation, draining or burning peatlands, and releasing carbon stored in the soil.

Efficiency increases aim to provide the same aviation service while using less fuel. Airplane manufacturers often use efficiency gains as a key selling point for new aircraft. Airlines tout efficiency gains when portraying themselves as becoming more sustainable. However, increasing flight demand leads to more flights, so more efficient planes can still produce more carbon pollution than in previous years. Absolute carbon emissions is what matters to the climate, not efficiency.

Strategies to shift responsibility for aviation’s carbon problem to consumers focus on consumer purchasing and travel behavior. Consumers are encouraged to purchase tickets from airlines that use biofuel blends, reduce waste by bringing snacks and water bottles, or reuse the cup provided by the airline. If the problem is carbon emissions from flight, it’s hard to see how theses consumer-actions matter. If the problem is the perception of airline sustainability, it’s easier to understand why airlines are adopting responsibility strategies.

Rather than reducing aviation emissions, some airlines are claiming to cancel out their emissions by paying others to remove carbon from the atmosphere through carbon offsets. Consumers can purchase carbon offsets for specific trips from a variety of offset providers. Offset providers typically claim to direct the funds to carbon reduction practices like reforestation or regenerative agriculture. However, there’s no oversight of carbon offsets and little verification that the money paid to offset providers causes carbon to be removed from the atmosphere.

The current lack of a viable solution to aviation’s carbon emissions suggests airlines will continue promoting efficiency, consumer-responsibility, and offsets. The centrality of flight to wealthy lifestyles and culture suggests the wealthy will continue to accept flight’s carbon emissions rather than enact regulation to eliminate emissions from aviation.

Patagonia’s 2025 Carbon Neutrality Sustainability Strategy

In December 2019, Rodrigo Bustamante published a post on Patagonia’s blog about the company’s goal to become “carbon neutral across our entire business, by 2025.” The post describes some of Patagonia’s approaches to achieving that goal.

Patagonia is a privately-held company in the clothing industry. About 95% of the company’s carbon emissions come from its supply chain connecting “the crops grown to make yarn, to shipping finished clothes to warehouses, stores and our customers’ front steps.” The post appears to exclude post-consumer use and disposal from Patagonia’s supply chain, which is not uncommon in supply chain conceptualization. However, “downstream transparency is becoming increasingly crucial regarding disclosing post-consumer waste from a company’s products or their packaging” (Sodhi and Tang, 2019: 2947). Patagonia has published product recycling principles, suggesting it is thinking about downstream impacts.

The blog post discusses Patagonia’s efforts to switch to renewable energy for its “owned and operated locations” and reduce the emissions of its supply chain. Altering its supply chain is more difficult because it does not own or operate many of the companies in its supply chain and must use other means of coordination than ownership to change company behavior.

Patagonia’s Ventura, California headquarters and distribution center in Reno, Nevada, both in the United States, already have on-site solar arrays, but they do not supply all of the energy used by the facilities. The firm is building four more arrays at the two locations, but even after completion 20% of its distribution center power will have to come from other sources.

Patagonia’s strategy to address the remaining power needs uses its in-house venture capital firm Tin Shed Ventures to invest in more than 1,000 residential solar projects in the USA. Those projects produce Renewable Energy Certificates that Patagonia purchases, claiming such purchases offset its consumption of electricity from non-renewable sources.

While offsetting works in theory, there are concerns about “leakage” with offset programs in which the carbon reduction that supposedly happens to generate offsets never actually happens. For more on the efficacy of certificate and offset programs, see ProPublica’s investigation of the California cap and trade system and the work of the Berkeley Carbon Trading Project led by Barbara Haya.

Ultimately, Patagonia claims it wants to rely less on offsets over time and instead reduce its emissions directly.

Renewable energy projects are underway in other countries, too. Patagonia’s Amsterdam office is 100% powered by wind power. Its Australian office and retail stores remain mostly powered by nonrenewables, though 25% of power comes from solar panels. In Japan, Patagonia funds agrivoltaics–combining solar arrays with agricultural fields–to offset “a large portion of the emissions” of its retail stores.

While efforts to decarbonize power for the facilities it owns and operates are proceeding, Patagonia’s true challenge is decarbonizing its supply chain that produces 95% of the company’s carbon emissions.

To decarbonize its supply chain, Patagonia is

  • Switching to recycled and renewable supply chain inputs,
  • Developing low-emission dying techniques, and
  • Researching new materials that are biobased and biodegradable.

In 2019, 69% of all materials used in Patagonia products were recycled, reducing carbon emissions.

Material changes will never bring [Patagonia] to net-zero emissions.

However, “material changes will never bring [Patagonia] to net-zero emissions.” More aggressive strategies are needed to convert its suppliers to new, zero-emissions practices.

Patagonia is vague about the strategies it will use to achieve this more difficult challenge, saying only that it hopes its suppliers will install more energy-efficient machinery and/or use renewable energy in their operations.

While Patagonia emphasizes the role of suppliers in achieving net-zero emissions by 2025, it also cautions that decarbonizing its supply chain will be “a behemoth task” complicated by a large number of suppliers in its supply chain and by the number of countries in its supply chain.

The high number of suppliers in its supply chain makes coordinating changes complicated and expensive. The high number of countries means the firm must deal with multiple renewable energy policies that exist at the country level.

As an alternative to changing supplier behavior, Patagonia is investing in carbon sequestration projects to remove carbon from the atmosphere. Such projects include regenerative organic agriculture that stores carbon in soil and reforestation that stores carbon in newly-grown trees.

While these projects might work in theory, they are far from feasible in terms of the scale needed to remove large amounts of carbon. Further, the same complexity problems exist in coordinating sequestration projects across a high number of projects as exist in coordinating changes in a high number of suppliers spread among many countries.

Finally, Patagonia claims it cannot achieve the goal alone and that it needs “customers and other businesses to join the movement.” It’s unclear why Patagonia cannot achieve the goal alone, and calls for partnerships sometimes verge on calls to diffuse responsibility for failure rather than meaningful calls for collective action.

While it’s encouraging to see Patagonia set a carbon neutrality goal, it remains vague and non-committal about tangible strategies and tactics it is allocating money toward to achieve the goal. And its strategy describes decarbonizing its supply chain as both critically important and, perhaps, impossible. The company eventually resorts to unproven carbon sequestration technologies and a call for partnerships to solve its problem, suggesting even firm’s on the cutting edge of decarbonization, which Patagonia is, still face difficult challenges in achieving decarbonization.

References

Sodhi, M. M. S., & Tang, C. S. 2019. Research Opportunities in Supply Chain Transparency. Production and Operations Management, 28(12): 2946–2959.

Replication in Strategic Management Journal

New paper suggests the field of strategy is vulnerable to a replication crisis. Publication standards need to change to require data disclosure and facilitate replication.

  • Bergh, D. D., Sharp, B. M., Aguinis, H., & Li, M. (2017). Is there a credibility crisis in strategic management research? Evidence on the reproducibility of study findings. Strategic Organization, 15(3), 423–436. http://doi.org/10.1177/1476127017701076

Authors attempted to replicate 88 studies published in Strategic Management Journal. About 70% of articles did not provide enough data to replicate findings.

Of the 30% of articles that provided enough data to be retested, about 33% included statistically significant hypotheses that did not replicate. Far more significant results were found insignificant than vice versa.

 

Circular supply chains and rising costs

About half of global paper is made from recycled fiber, making pulp and paper one of the few industries currently achieving some degree of circularity.

However, even this industry is facing supply constraints due to ever-growing paper demand. When demand for recycled fiber increases, either profit margins on recycled paper made from that fiber go down or the price of recycled paper goes up. Both results challenge the circular supply chain.

These dynamics suggest the difficulty of deploying circular supply chains in other industries. Initial promises of lower supply costs can be challenged by increased demand for recycled paper or by coordination costs in organizing the circular supply chain.