The importance of countries and corporations hitting their climate targets
Net zero, it’s a term you’ve no doubt heard a lot lately. All over the world, countries and companies are pledging to have their greenhouse gas emissions at net zero by a certain date, most often 2050. The goal is to stop, or at this point limit, climate change. Big changes are underway, especially in the automotive sector, where the transition to electric vehicles is full-speed ahead. But bigger changes still are needed, given how many economic sectors there are and how enormous a task it is to slash emissions in a world that has run on them for a century. To get buy-in, it’s important to examine why net zero is so important and how it can be achieved.
Don’t Get Caught in the ‘Net’
The “net” in net zero is key. It’s something of a double-edged sword. It’s what allows corporations – and to some extent countries – to continue to emit greenhouse gases but offset those with reductions elsewhere, balancing them out. Those offsets can be manipulated in such a way that pledges amount to little more than greenwashing. For the whole world to go net zero, we’ll eventually run out of existing offsets. But the “net” also means that even if we put more emissions into the air, we can make up for that by removing CO2 we’ve already put out.
Those “negative emissions” can come from natural processes and from technological ones. On the natural side, trees are excellent absorbers of CO2. Planting more trees in more places and replacing ones that we cut down are essential steps. So are the restoration of peatbogs, mangroves, and underwater seaweed forests, all of which use CO2 in photosynthesis very efficiently. On the tech side, direct air capture with machines that suck CO2 out of the air is a major step forward. Swiss firm Climeworks has a few direct air capture plants in Europe and hopes to bring the cost of removing a ton of CO2 from the air down to $100 from $1,000 in the next decade. Another method is bioenergy with carbon capture and storage. BECCS involves burning plant materials for energy and capturing the carbon, storing it underground and planting more to replace what was burned. The Intergovernmental Panel on Climate Change estimates it costs $60-$250 to take a ton of CO2 out of the air this way. Negative emissions methods like these are why net zero is a real possibility.
What Can (& Can’t) Be Done
Investment and innovation made renewables competitive with fossil fuels in the energy sector. In many cases, renewables are now the less expensive option. It will take much more investment on the part of governments and private businesses to achieve net-zero goals. A 2019 World Bank study estimated that the world would need to invest $90 trillion by 2030 but that the investment would yield a fourfold return thanks to new jobs and economic opportunities. The year before, the New Climate Economy Report concluded there would be an economic gain of at least $26 trillion by 2030 from such investment.
Why net zero runs into problems is that some industries aren’t as suited to getting rid of greenhouse gases. While automakers are ramping up production of electric vehicles with technology in place to yield good battery range, the tech in the aviation sector is behind. Strides are being made, however, in sustainable aviation fuel and in hydrogen-electric powertrains.
By far the trickiest industry is agriculture. It’s the biggest global contributor to emissions, and while some of that is CO2, most comes from methane, which is in some ways more harmful than carbon dioxide. Plant-based meat substitutes are growing in popularity in developed countries, but the world is a long way from going vegetarian.
Will Net Zero Save the World?
To reach Paris Agreement goals of keeping global average temperatures to 1.5 degrees Celsius (2.7 Fahrenheit) above pre-industrial levels, the general consensus is we need to cut emissions in half by 2030 and get to net zero by 2050. The U.N.’s 2020 Emissions Gap Report shows we’re on a trajectory to hit 3 degrees Celsius above pre-industrial levels by the end of this century. We have already seen devastating effects from climate change in the form of droughts, floods, fires, and strong hurricanes. The longer we delay net zero, the more the climate will change. It can be easy to become fatalistic and draw the conclusion that there’s no stopping climate change and thus no point in trying.
But the costs of not acting are much higher than the investments necessary. There are many reasons why net zero is a worthy goal. Without it, parts of the world might become uninhabitable. Crops in other places might fail, leading to hunger and political destabilization across the globe. It is the biggest global security issue of the century.
Net zero is also an opportunity. As BlackRock, the world’s largest asset manager, puts it, “climate risk is investment risk” and “will fundamentally reshape finance and drive a significant reallocation of capital.” Conversely, the net zero transition is “a historic investment opportunity” and “is in the financial interest of both our clients and the economy as a whole.”
More than 110 countries have pledged to reach net zero by 2050 (China by 2060), but only a few have passed legislation requiring it. It is of vital importance that countries party to the Paris Agreement live up to their nationally determined contributions, especially G20 nations, which contribute 80% of global emissions. It’s also important those nations live up to their $100 billion promise of support to developing nations that don’t have the technology to get to net zero.
Will we still be able to live on Earth without achieving net zero? Sure, but life will be a lot harder for a lot of people, and nearly everyone will feel the effects. It might be as serious as being displaced from your home or as minor as not being able to find certain foods anymore, but practically everyone will notice a change. So, why net zero? Because it’s the best shot we have to preserve the world we hold so dear.