Will COP26 accelerate the path to Net-Zero?

The Emissions Gap Report, published this week by UNEP, supports IPCC AR6 and the UNFCCC’s NDC Synthesis Report with regard to the urgency needed to mitigate and adapt to Climate Change.

The efforts some countries expect to make, recently communicated through the updated NDCs are welcome. The World has become #onestepgreener. Yet, much more is needed as map 1 created by EGR team illustrates. Its efforts combined with corporate pledges only reduce greenhouse gases emissions by 7.5% (EGR, 2021).

effect of latest NDCs on GHG emissions by 2030 vs previous NDCs.
Map 1 – latest NDCs impact on global GHG emissions level by 2030 compared to previous NDCs
Source: Emissions Gap Report: The heat is on

To limit Global warming to 1.5ºC, with a 66% probability, a reduction of 55% from pre-industrial levels needs to be met by 2100, so atmospheric carbon concentration is at the 430 ppm maximum level. Different scientific sources inform the current carbon budget is over 410 ppm. Its increase rate has changed between 2.6% and 1% annually, according to World Meteorological Organisation (WMO) data. If we keep releasing at these rates, the carbon budget will be reached soon. In 2024 and 2025 respectively, as my calculations show in the graphic below, using WMO data. Given the current NDCs and pledges, a 66% probability of limiting global warming to 1.5ºC, by 2100 seems a too optimistic scenario. The EGR informs that with current emissions rate trend, the Planet will have warmed 2.7 ºC by the end of the century.

historic atmospheric CO2 concentration in ppm, WMO data.
Graph 1: Reaching Carbon Budget (own elaboration with WMO data)

Emissions trading schemes, a big topic to agree on during COP26, have been contributing to limit atmospheric emissions in some sectors. As companies operating in those sectors are penalised for the GHG emissions they directly generate above the set threshold, they had to decide on its optimisation. Choosing the right scenario implies a thorough process, where sustainability needs to be at the centre of the decision making. Let me remind you that sustainability is a broad concept based on three pillars; environment, social and governance. A concept not always properly used, as greenwashing cases have shown.

We all inhabit this Planet. We all profit for the care we take of it. Like the community who takes care of its common property, the more stakeholders look after it, following the set standards, the better the outcome. When it’s a voluntary work, there will be free riders who will not contribute but will benefit from others’ collaboration. When collaboration is mandatory, the collaboration’s output will reach a higher level. Very likely welfare gains will also be higher. If this behaviour is scaled to a global level, with each neighbour being each country, mandatory global emissions trading scheme could be the most beneficial for the sustainability of our Planet.

Given that not all the parties have updated their NDCs and only 60% of G20 countries have set Net-Zero targets, how can COP26 succeed in managing the global GHG emissions effectively? Isn’t the world risking for the own backyard mindset to prevail over the protected forest one? Would setting national emissions trading schemes delay the Net-Zero goal as countries spend their resources on deploying so instead of allocating to deploy a global scheme? Getting countries to update their NDCs in a Pandemic scenario has been limited by the short-term political perspective. The EGR mentions that only 2,6% of public budget spent during the Pandemic were on activities that potentially reduce GHG emissions. This shows sustainability’s environmental pillar hasn’t been a core investment criterion. The world wasn’t prepared for the black swan and diplomacy failed to influence properly and seize the opportunity to change for good and speed up decarbonisation.

I agree with the EGR – The heat is On. Acting globally instead of individually, leads to efficiencies on capital allocation. When managing emissions with a global system, most likely corporate admin costs would be reduced. Capital savings could then be used to further decarbonise organisations’ activities. It also shows we are #togetherforourplanet.

Net-Zero

The Paris Agreement states that the signatory parties, in recognition of peaking GHG emissions and its contribution to Global warming, should set decarbonisation targets so a “balance between anthropogenic emissions by source and removals by sinks on greenhouse gases” can be reached by the second half of the XXI century.

Carbon capture and storage isn’t commercially developed yet, meaning there isn’t enough capacity created to store the released atmospheric carbon, not to speak about the rest of the GHG. May it be because not enough R&D has been undertaken to understand the cost-efficient technologies to do so. Or studies may be inconclusive regarding the environmental impact of high concentrations of stored GHG emissions in the geological, hence, existent natural sinks.

A balance can be better achieved if emitted GHG are reduced, increasing the abated ones. Energy efficiency is thus imperative, and so is operational efficiency. Efficiency implies improvements in the resources’ usage in comparison to previous operative processes. If less resources are used, then less energy may be needed to achieve the same previous result. It also means less usage of other resources. Given the finite status of many resources, being efficient is paramount. Aren’t you happy when you achieve something with less effort? So is our Planet!

How can your organization achieve Net-Zero targets? Well, to deliberately achieve something you need to depart from a level of awareness. What cannot be identified cannot be consciously improved! If the process of achieving your Net-Zero targets is longer than other organisations, due to higher complexity of your manufacturing process and the corresponding value chain, you can start by setting Carbon Neutral targets to be achieved in the short-term, aiming at achieving Net-Zero at a later moment, but working towards them already. So, your Carbon Neutral goals should be focused to reach Net-Zero.

Figure 1 - A roadmap to Net-Zero. A circular graphical representation with different colours representing the phases and achievments to the end goal, Net-Zero GHG emissions.

Neutralization contributes much more than compensation in limiting Global Warming to the 1.5C. Figure 1, above, illustrates a high-level roadmap to Net-Zero. Starting by knowing your operations, processes, products or services and the value chain is key to determine what GHG emissions need to be known and understand where should be reduced. What can be measured can be improved, right? By knowing your GHG emissions level for scope 1, 2, in addition to 3, for a complete decarbonisation, you can set the base year. Knowing how they can be reduced and the pace allows you to measure the reduction impact and the timeframe. Consequently, the target year, by when Net-Zero should be attained, can be set. Announcing the commitment is important. Your stakeholders will be happy to know the organisation is moving in the right direction, as any good friend is happy for you when you’ve achieved a better stage in your life. Having the right people and tools for implementation is key for the success of this target. You may want people who are purpose driven, those who understand why is important to achieve so at a faster and balanced pace.