By Steven Cohen, Ph.D., Director of the M.S. in Sustainability Management program, School of Professional Studies
The stark contrast between our backward-facing federal government and our forward-facing corporate world is obvious when we examine the effort to decarbonize our energy supply. Two recent news stories highlight this disparity. In the first, the U.S. Department of Energy is pushing the International Energy Agency to end its work on climate change. In the second, Microsoft announced it had reached its 100% renewable energy targets. There are many reasons for Microsoft to pursue renewable energy. Reducing greenhouse gas is one of those reasons, but there is another, more bottom-line-driven rationale: renewable energy with modern battery storage is less expensive and more reliable than fossil fuels.
Our Department of Energy is taking the lead on trying to re-carbonize the world’s energy supply. It’s difficult to even contemplate the sheer folly of what is happening in that once useful department of the federal government. According to Brad Plumer of the New York Times:
“The Trump administration this week threatened to pull the United States out of the world’s leading energy agency unless it abandoned its focus on tackling climate change. Energy Secretary Chris Wright said that the International Energy Agency had become a “climate advocacy organization” and should stop publishing its annual road map for how countries could eliminate their planet-warming fossil fuel emissions by 2050, known as its “net zero scenario.” “We don’t need a net zero scenario, that’s ridiculous, it’s not going to happen,” Mr. Wright, a former gas executive, said on Tuesday at a side event during the agency’s annual meeting of energy ministers in Paris. He said he wanted the agency to “focus on energy security,” but added that “if they insist that it’s so dominated and infused with climate stuff, then we’re out. The International Energy Agency is enormously influential, and its data and reports on everything from oil stockpiles to electric vehicle sales are frequently cited by energy companies and investors as a basis for long-term planning. The United States provides around 14 percent of the agency’s budget and is among its 32 member states.”
As Microsoft understands, there are a number of reasons other than greenhouse gas pollution to replace fossil fuels with renewable energy. There are more conventional pollutants emitted by burning fossil fuels, and renewable energy is already less expensive than fossil fuels. Renewables pose fewer potential risks to energy supplies, particularly in nations that do not have their own deposits of fossil fuels. But America’s national government these days is a wholly owned subsidiary of the fossil fuel industry and has no interest in promoting renewable energy.
The contrast of federal energy preferences with large American corporate energy consumers is stark. Companies like Meta, Google, Amazon, and Microsoft have customer bases that care about climate change, and these companies are serious about achieving decarbonization targets. They recognize that the transition to renewable energy will take time, but their need to respond to regulation by the European Union and to investor concerns about climate risk has encouraged them to seek methods of investing in and utilizing renewable energy.
A recent article in the Wall Street Journal told of Microsoft’s claim that it had achieved its renewable energy goal. The Journal’s Yusuf Khan reported that:
“Microsoft said it has reached its goal of matching its total annual global electricity consumption with renewable sources, reaching a target it first set itself in 2020. Speaking on the outskirts of the Irish capital, where the tech giant built its first data center outside of the U.S., Microsoft Chief Sustainability Officer Melanie Nakagawa said one of her key tasks has been balancing the company’s global growth with sustainability… Microsoft has been a pioneer in the clean-energy effort. It has sought out innovative ways to meet its surging energy needs while also trying to reach its goal of being carbon negative by 2030… To meet its electricity target, the tech company uses what are known as corporate power purchase agreements, or PPAs, where companies agree a long-term contract with a renewable energy provider to buy power at a fixed price. Renewable energy providers say that PPAs offer them assurance that the facilities they build—be they wind, solar or other forms of renewable power—have a guaranteed buyer.”
The complexity of energy supply and companies seeking to reach clean energy goals is what led to the creation of corporate power purchasing agreements. The long-term goal is to assist in transitioning the electric grid from fossil fuel sources to renewable energy sources. The use of these agreements is dominated by the world’s largest companies. The number of new agreements is no longer increasing but remains significant. According to a BloombergNEF report last week:
“Global clean power purchase agreement (PPA) volumes fell for the first time last year in nearly a decade, as power prices and policy risks redefined market activity. Corporations announced deals for 55.9 gigawatts of clean power in 2025, 10% down from the record set the prior year, according to BloombergNEF in its 1H 2026 Corporate Energy Market Outlook. The market is increasingly defined by a divergence between hyperscalers and the broader universe of corporate buyers. Technology giants Meta, Amazon, Google and Microsoft were responsible for 49% of all global activity last year. Meta and Amazon led global clean energy buying activity in 2025, contracting a combined 20.4 gigawatts (GW), including 4.7GW of nuclear power. While Meta’s activity was concentrated in the US, Amazon was the most active buyer in Europe and Asia Pacific.”
My view is that these agreements are a useful method of helping to fund decarbonization, but these agreements are complicated and can be hard for smaller buyers without energy procurement capacity, including lawyers and energy experts, and that is why they are typically pursued by large companies. It is also the case that some of these agreements can be opaque, and outside observers may have difficulty connecting specific agreements to specific renewable energy sources. If a company wants to ensure credibility and tangible impacts on the electrical grid, they should purchase renewable energy from either newly built or clearly expanding energy projects. They should also seek to invest in the same grid from which they are draw energy. Companies incur risk by agreeing to a fixed price for the energy they purchase, but that risk reduces the uncertainty caused by the volatility of the fossil fuel market.
While corporations that consume a great deal of energy are interested in decarbonization and the expansion of energy supply, the U.S. government is not alone in promoting fossil fuels. Argentina’s President Javier Milei mirrors Trump and has even labeled climate change a socialist hoax. Other nations continue to promote fossil fuels, but either won’t discuss or deny climate change. Nations that promote fossil fuels and block strong climate policies include Saudi Arabia, the United Arab Emirates, Russia, Norway, and Australia. However, these nations do not deny climate science but argue for delay and a more gradual transition away from fossil fuels.
Over the past several decades we have seen efforts to promote renewable energy and fossil fuels via public policy. These policies have impact but also have limits. Energy is at the heart of nearly every technology that is central to the modern global economy. The intense energy needs of the Artificial Intelligence industry are just the latest of over a century of technologies requiring energy. The choice of energy source is governed by price, ease of use, and reliability of supply. Energy impacts, such as pollution, impacts on ecology from generation and transmission, and health impacts, matter, but appear to be secondary considerations when energy choices are made. The central force that I believe will bring about the transition to renewable energy is the pace of technological innovation and the underlying cost advantage of renewable energy. The sun is free, and as the technology to capture and store its energy improves and becomes lower in price, it will displace all other sources of energy and eventually dominate the energy system. The U.S. Secretary of Energy, like the President he serves, along with all the other fossil fuel supplying countries, are facing the past. The energy and economic future will belong to those who embrace the new technologies of energy generation and storage.
Views and opinions expressed here are those of the authors, and do not necessarily reflect the official position of Columbia School of Professional Studies or Columbia University.
About the Program
The Columbia University M.S. in Sustainability Management program offered by the School of Professional Studies in partnership with the Climate School provides students cutting-edge policy and management tools they can use to help public and private organizations and governments address environmental impacts and risks, pollution control, and remediation to achieve sustainability. The program is customized for working professionals and is offered as both a full- and part-time course of study.
