During April 22–23 2021, President Biden held a Leaders’ Summit on Climate wherein several countries’ leaders announced their revised or new net-zero commitments. The US announced a target of reducing emissions by 50–52 percent by 2030 compared to 2005 levels. Besides the summit, many countries and companies are already in a race to put out net-zero goals to combat the climate crisis. This race has started from the Paris Agreement’s announcement “a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century…” So-called “net-zero” targets have become ubiquitous, but what does it really mean? How do we know if we are really meeting net-zero goals or not? Is it feasible? What can we expect to see at COP-26 on progress towards net zero targets at Glasgow?
What are GHG (Greenhouse Gas) emissions?
Net-zero commitments are centered on reducing GHG emissions. GHG is defined as a gas in earth’s atmosphere that traps heat from sunlight after sunlight passes through the atmosphere. Increasing GHG emissions has driven current global warming due to the trapped heat in the earth’s atmosphere bringing up the planetary temperature. Recent evidence shows that rising temperatures are exacerbating all kinds of natural disasters — stronger tornados, droughts, floods, biodiversity loss, and so on.
We often use carbon dioxide equivalents for GHG measurement, which may make us think CO2 emissions are the only source of GHG emissions. In fact, GHG emissions include carbon dioxide, methane, ozone, nitrous dioxide, chloroflorcarbon, hydroflorocarbon, perflorocarbon and water vapor. Although we use carbon dioxide as part of our global warming impact measurement (measured in CO2e — carbon dioxide equivalent), it has the lowest global warming potential among GHGs. It is because CO2 is the dominant anthropogenic GHG emissions (from burning fossil fuels, land use, industrial production, etc.) and is considered the most important greenhouse gas in some GHG assessments. On the other hand, other GHG emissions have a number of orders of magnitude higher global warming potential compared to CO2. Therefore, in order to make the measurement more comparable, GHG accounting uses CO2e.
There have been constant GHG emissions into the atmosphere produced as byproducts of natural processes. However, as we can see from the chart below from the IPCC report (2014), CO2 emissions and temperatures have surged because of human activities — namely, massive burning of fossil fuels since the start of the Industrial Revolution. Therefore, to lower the planetary temperature or at least slow the pace of its increase, reducing CO2 emissions from human activity is a must.
What do we mean by net-zero? What are the measurements?
There are two main terms that are used almost interchangeably in the news — net-zero and carbon neutral. Net-zero emissions mean achieving a balance between emitted and removed (or sequestered) carbon emissions in the atmosphere over a specified period of time. Examples of net-zero-oriented activities include reducing energy demand, switching major energy sources from fossil fuels to renewable energy, and developing carbon capture and storage technology. On the other hand, carbon neutrality has been traditionally achieved via carbon offsets, which involves reducing or avoiding greenhouse gas emissions or removing carbon dioxide from the atmosphere to make up for emissions elsewhere. Thus, this does not mean a commitment to reduce overall GHG emissions. This was an emissions reduction rule (carbon trading) from the Kyoto Climate Protocol that allowed high-emitting countries to offset their emissions with help from lower-emitting countries. The most common example of carbon offsetting is paying to plant more trees or provide energy-efficient cooking stoves to developing countries. Unfortunately, this is swapping their carbon emissions, rather than reducing the overall amount of carbon. If we know exactly how much we are emitting and how much we can emit without impacting climate change, then this assigned emission amount with carbon trading would work fine. However, no one can rule out the possibility of miscalculation of our planet’s capacity with emissions nor misreporting data by each country and company. That is to say, carbon neutrality can be easily accused of greenwashing, which has led world leaders to begin to pledge for net-zero emissions instead.
Over the past couple of years, many countries and businesses have been ramping up their net-zero pledges, which now cover over 68% of the global economy.
Leaders announcing net-zero targets, either setting new goals or ramping up from their pledge in National Determined Contribution (NDCs) to the Paris Agreement on reducing GHGs. NDCs are formed with a few different components:
- emissions reductions relative to a specific reference year in the past,
- emissions reductions relative to a hypothetical baseline in absence of climate change impacts,
- emission intensity improvements,
- achievement of renewable energy targets, etc.
Even though NDCs propose their emission reduction targets, there has been a concern that NDCs do not define direct emissions reductions, but instead, their effect on global emissions are estimated indirectly and relatively.
Similar to NDCs, before delving into how to achieve net-zero, we need to understand existing uncertainties from net-zero commitments to reduce questions and potential loopholes. If we start digging into the details of each country’s net-zero target, we will notice loopholes and the difference in details — targeting only carbon emission or GHGs, baseline year (pre-industrial or other specific year), no specific agreed guidelines and principles for their goals, and definition of accountability. These loopholes may be exploited for greenwashing, that is only words without specific actions. Let’s take a quick look in the table below at how each major countries’ commitments differ first.
As we can see from the above sample of countries’ commitments, they have different commitments — carbon neutrality, curb emissions, reduce GHG emissions, and a vague percentage number on reduction.
GHG emissions contain many different types of gas emissions as mentioned earlier. They have different strengths for global warming potential and lifetime in the atmosphere. Thus, it is important to have further details on what, and how each country will manage each type of GHG emission. For instance, Chinese net-zero commitment only mentions carbon emission, even though China is a heavy emitter of all six major GHG emissions. Also, for New Zealand’s pledge as well, they excluded biogenic methane, emitted by livestock, waste treatment, and wetlands, even though their gross methane emissions were produced by livestock (85.8%). The point here is that each country is missing on the scope of emissions reductions in the specifics — what and how much, and how to reduce.
Countries also use different baselines and base years, which were often indicated below 1990 levels, 2005, 2010 or 2013, etc. There are uncertainties around how each government came up with those baselines — lack of methodologies and lack of transparency into their decision-making process. Each country has experienced different economic growth and may vary in emitting amount by year, thus this could affect the choice of baselines. However, the uncertainty of their measurements and methodologies makes it harder to determine and track how they are achieving their targeted reduction. More clarity and transparency on measurement and data will facilitate a better understanding of each country’s intention and real commitment. Then, it will help progress towards the achievement of the net-zero target with concrete accounting methods rather than a vague statement.
Net-zero in Business
Besides countries’ net-zero targets, many companies including heavy emitting ones set net-zero targets. According to the UNFCCC’s Race to zero, so far 2,357 businesses have announced their net-zero commitments. More commitments bring more awareness that could drive significant emission reductions and drive investment into low-carbon technologies. However, similar to countries’ targets, companies are free to set targets without any guidelines, standards nor oversight.
Besides that, it is not clear if those net-zero commitments include scope 3 emissions (indirect emissions) or not. If so, then how are we tracking those emissions as they are not yet mandatory reporting emissions. Based on GHG protocol, scope 3 emissions are all indirect emissions — that are not covered by scope 1 and 2 — from all the company’s operations, such as employee travel, waste generated, purchased goods, investments, etc. It is important to have such details what scope of emissions are considered under net-zero, especially with scope 3, because emissions along the supply chain and operations represent the biggest GHG emission impact.
Thus, it is difficult to understand whether net-zero targets are feasible under their circumstances and sectors, if they have sufficient commitments, or if they have reporting mechanisms on how to track their deliveries. First of all, we need to accept the fact that not every sector can achieve net zero. Once everyone is on the same page, we can oversee how to manage all different commitments to achieve an ultimate net-zero in our society. On that note, we need to understand which sectors are emitting the most and their feasibility to set correct guidelines and standards to reduce GHG emissions.
Our World in Data provides the latest breakdown of global greenhouse gas emissions by sectors in 2016. One thing to highlight from its finding is that although the majority of the world discusses how to reduce the GHG emission level from the transportation sector, surprisingly large amounts of the GHG emissions are coming from other sectors — such as electricity, agriculture, heat production, and industry (such as heavy industry — metals, chemicals, etc).
In the chart, energy use in buildings emits approximately 17.5% of total GHG emissions. If you do further research on energy use in buildings, there was a recent study from Energy Saving Trusts. Energy Saving Trusts reveals that the UK households emit the most from heating. Unfortunately, low carbon heating is yet matured compared to the power and transport sector, since heating requires a large amount of energy (yet fossil fuel is the main energy source) and locally distributed boilers are hard to control. There are few alternatives, such as nuclear, hydrogen, or electricity. However, none of them are yet to be the perfect source for high-grade heat with low carbon or no carbon emissions. If we develop the technology further, such as turning air into heat via heat pump or clean electricity into heat generation, unnecessary emission amounts could be eliminated. Except, the technologies are not sufficient and common yet to rely on it.
Moreover, heavy industry also produces large amounts of emissions from its high-grade heat requirements for smelting (metals, cement, petrochemicals, etc), during its process, and its trades. Agricultural sectors also face the challenge of reaching net-zero emissions. Agricultural sectors are emitting mainly from livestock (a main source of methane), chemical fertilizers, land use expansion, and illegal deforestation. Lastly, air and shipping transportation cannot shift direction to electric/hydro soon as the technology is not yet mature. In these cases, we may consider carbon offsets for those existing emissions that are not possible to eliminate or meaningfully reduce. Certainly, all the industries should continue placing a concerted effort towards reducing GHG emissions.
If we can decarbonize energy use in the industry and construction, and agriculture sectors successfully, it will account for approximately 50% of the total emission amount. Therefore, in order for us to reach net-zero, policymakers, scientists, and the private sectors must cooperate to seek potential solutions for those sectors with more specific measurements and methodologies to track their commitments. It is important to have agreed standards and frameworks as a starting point. However, as each sector requires different technologies and scope of possible GHG emission elimination, it is necessary to have different net-zero commitments (or carbon-neutral commitments as an alternative) accordingly. At COP 26, if we can leverage the tsunami of net-zero commitment into more concrete plans and measurements, then we definitely can see a clear direction to get closer to the ultimate net-zero. An abundance of commitments needs to be redefined into well-thought and agreed standards to boost trust and market accountability.
To wrap up
The Paris Agreement was set in 2015, but net-zero targets by countries were actively set from 2019. It took more than four years to see the concrete action by countries and companies. Climate change does not wait for us until we are ready. It already started way before the Paris Agreement, while we were ignoring the signs and neglecting the truth. Therefore, we really need to start taking concrete, measurable action.
We can see in the below chart from Climate Action Tracker, our current policies and pledges will lead to a 2.6-celsius degree increase by the end of the century. This is close to double the gap with the Paris Agreement, 1.5-celsius degree. The world leaders have been blowing their own horns because of the recently increasing number of net-zero targets. However, in reality, this does not seem to be enough to get closer to the targeted temperature. We sometimes hear in the news that countries may over committing for net-zero and are not feasible. Nonetheless, as we successfully advanced technology development, I believe we can be more rigorous with our commitments, but only if we have a clearer measurement, transparent targets, cooperative environment, detailed policies, and agreed disclosure standards.
The question arises again how do we define transparent target measurements similar to sustainable finance (e.g. ESG investing). As we saw from many countries’ and companies’ commitments, we do not know their methodologies, measurement and data to determine their commitment, but only their ideal year to achieve net-zero. Lack of transparency brings no accountability. Similar to the pandemic, climate change is a global issue that will eventually impact everywhere. Therefore, I hope at COP 26, the world leaders will really be able to define how the society chooses the baseline (setting baseline modeling), what to agree on improving transparent reporting mechanisms, how to maximize the cooperation between developed and developing nations, and what kind of concrete action points to be set rather than setting a vague target timeline of 2050.
