Net-Zero - Trend Or Necessity? (Part 2)

In Part 1 of this article, we looked at the structure around net-zero 2050 targets and scopes, here we continue with the challenges and promise of 'reaching net'.

Getting Off Fossil Fuels 

Over the past year, the Russia-Ukraine conflict has caused an enormous rise in energy prices, which has increased the cost of energy, particularly natural gas, for households. The severity of the cost-of-living crisis has been exacerbated by the energy transition's poor development and reliance on imported fossil fuels. An electricity generation system that is heavily dependent on fossil fuels reinforces risks to energy security, speeds up climate change, and moves us further away from realising net-zero goals, as evidenced by the unprecedented global energy crisis. 

At best, the situation has partially reduced natural gas use in the European Union, with energy consumption coming slightly down due to austerity measures. While this has somewhat relieved the winter burden on electricity demand, it hasn't been the sharp decline that could point to a full de-linking from Russian gas. While this points the electricity sector towards the development of renewable sources of generation, developing energy efficiency strategies will be a more prudent use of energy sector resources in the long run. We learn to use less, be more effective, then the emissions reductions conversation starts to come off the table.

Building Efficiency?

The construction industry - which includes cement production - accounts for around 40% of global emissions, and energy demand for buildings increased by almost 4% from 2020 to 135 exajoules (EJ), which is the highest increase in the previous ten years. Building activities' CO2 emissions have hit a record high of over 10 gigatonnes of CO2 (GtCO2), up about 5% from 2020 and 2% from the previous peak in 2019. 

Along with this, it appears that many eminent organisations jumped on the net-zero and carbon neutrality bandwagons. Companies have made public commitments to reduce their greenhouse gas emissions to net-zero levels. Yet, they now use it as a kind of greenwashing strategy to dupe investors and stakeholders into falling for their lies. 

Failed Pledges

According to the Corporate Climate Responsibility Monitor report, With vague net-zero targets and modest emission reduction commitments, 25 of the largest firms in the world largely failed their net-zero climate pledge tests. Although claiming to be net-zero and carbon-neutral, the big multinational corporations (MNCs) evaluated in the report only promise to decrease their industry sector emissions by an average of 40%. Only three of the 25 companies, namely Maersk, Vodafone, and Deutsche Telekom, clearly commit to significantly reducing emissions throughout their complete value chain by over 90%.

Sphera, an ESG software, data, and consulting company, conducted a survey of 300 operations managers in the industrial sectors across the U.K., U.S., and Germany. The results revealed that while 85% of companies now have net-zero strategies, the majority are failing to implement them into regular business operations. Only 41% of operations managers say their companies' everyday operations have significantly changed as a result of sustainability plans, and 32% claim their companies do not adhere to science-based emissions objectives. 

How Can We Transition Towards Net- Zero Goals? 

It can be difficult to achieve net-zero emissions because, on the other hand, major corporations frequently fall short of their commitments, and, on the other hand, many nations must balance tackling climate change with short-term economic imperatives. However, the battle to achieve net-zero must go on if we are to create a more level playing field in which to address climate change. For this reason, our approach to energy use and the huge carbon emissions from the energy industry must first be addressed. 

According to the International Energy Agency (IEA) report, by 2030, global renewable energy investment will need to more than triple to almost $4 trillion in order to achieve net-zero emissions by 2050. The energy sector must deploy all clean energy technologies - including renewables, electric vehicles, and energy-efficient building retrofits - between now and 2030 if we are to see a global drive towards clean energy. 

Global Emissions - A United Approach

Governments, investors, stakeholders, and citizens must work together to guarantee that developing economies have the necessary financing and technologies to meet net-zero targets if we are to get to zero by 2050. For this purpose, a  High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities was established by UN Secretary-General António Guterres in March 2022, to strengthen and clarify the standards for net-zero emissions commitments made by non-state entities, including companies, investors, cities, and regions, and to hasten their implementation. 

The recent COP27 summit saw the release of the report "Integrity Matters: Net Zero commitments by Businesses, Financial Institutions, Cities and Regions," which aims to provide clarity in four key areas: environmental integrity, credibility, accountability, and the role of governments in advancing credible and accountable net-zero pledges to limit global warming. The report outlines the factors non-state actors should take into account at each stage of their progress towards achieving net-zero. 

Takeaway

We can hope that, by enforcing such severe and accountable measures, governments, private corporations, and financial institutions will be more responsible when claiming and reporting their net-zero pledges, and that instances of net-zero greenwashing would decrease significantly.

Hope aside, and if the past decade has shown us anything, political vacillation can be countered by organised climate action. The vast majority of people would - if we fundamentally link burning fossil fuels and global climate change to the impairment of our personal and environmental health - support measures that result in a cleaner world, one that has restructured itself to be fully electrified, energy effective, and resilient to the shocks of growth.

That world starts with global emissions reductions, so we can address climate change on a more even playing field. To 'reach net' would act as a significant milestone in our collaborative capabilities as a planetary species, a fundamental target of historic proportions that could define our long-term chances of success not just in stabilising global temperatures, but in acting as custodians of the planetary conditions we have now created. Read Part 1 of this article here.