The global problem of climate change and its associated environmental, economic and societal effects is certainly one of the most complex challenges the world has ever confronted.
We’ve all heard of the term net zero, but what exactly does it mean? Put simply, net zero refers to the balance between the amount of greenhouse gas that’s produced and the amount that’s removed from the atmosphere.
It can be achieved through a combination of emission reduction and emission removal. To keep global warming to no more than 1.5°C – as called for in the Paris Agreement –emissions need to be reduced by 45 per cent by 2030 and reach net zero by 2050.
Net zero means cutting carbon emissions to a small amount of residual emissions that can be absorbed and durably stored by nature and other carbon dioxide removal measures, leaving zero in the atmosphere.
Transitioning to a net-zero world is one of the greatest challenges humankind has faced.
It calls for nothing less than a complete transformation of how we produce, consume, and move about.
The energy sector is the source of around three-quarters of greenhouse gas emissions today and holds the key to averting the worst effects of climate change.
Replacing fossil fuel, a generic term for non-renewable energy sources such as coal, natural gas, coal products, derived gas, crude oil, petroleum products and non-renewable wastes with energy from renewable sources, such as wind or solar, would dramatically reduce carbon emission.
In order to avert the worst impacts of climate change and preserve a habitable planet, global temperature increase needs to be limited to 1.5°C above pre-industrial levels.
Currently, the Earth is already about 1.2°C warmer than it was in the late 1800s, and emissions continue to rise.
To keep global warming to no more than 1.5°C – as called for in the Paris Agreement – emissions need to be reduced by 45 per cent by 2030 and reach net zero by 2050.
The Paris Agreement on the on the other hand, is a legally binding international treaty on climate change.
It was adopted by 196 Parties at the UN Climate Change Conference (COP21 ) in Paris, France, on December 12, 2015. It entered into force on November 4, 2016 and its overarching goal is to hold “the increase in the global average temperature to well below 2°C above preindustrial levels” and pursue efforts “to limit the temperature increase to 1.5°C above preindustrial levels.”
The Paris Agreement is a landmark in the multilateral climate change process because, for the first time, a binding agreement brings all nations together to combat climate change and adapt to its effects.
The agreement reaffirms that developed countries should take the lead in providing financial assistance to countries that are less endowed and more vulnerable, while for the first time also encouraging voluntary contributions by other Parties.
Climate finance is needed for mitigation, because largescale investments are required to significantly reduce emissions.
Climate finance is equally important for adaptation, as significant financial resources are needed to adapt to the adverse effects and reduce the impacts of a changing climate.
Although climate change action needs to be massively increased to achieve the goals of the Paris Agreement, the years since its entry into force have already sparked low-carbon solutions and new markets.
More and more countries, regions, cities and companies are establishing carbon neutrality targets. Zero-carbon solutions are becoming competitive across economic sectors representing 25 per cent of emissions.
This trend is most noticeable in the power and transport sectors and has created many new business opportunities for early movers.
By 2030, zero-carbon solutions could be competitive in sectors representing more than 70 per cent of global emissions. There are many possible paths to achieve net zero CO2 emissions globally by 2050 and similarly many uncertainties that could affect any of those pathways.
An orderly transition that aims to safeguard energy security through strong and coordinated policies and incentives that enable all actors to anticipate the rapid changes and to minimise energy market volatility and stranded assets is required.
Decisions about technology deployment driven by costs, technology maturity, market conditions, available infrastructure and policy preferences must be made and equally rapid deployment of clean energy technologies and energy efficiency is at the core of this transition.
There is, however, inevitably a risk of bottlenecks emerging for some technologies, which underscores the importance of measures to enhance material reuse and recycling and to drive down the material intensity of clean energy technologies.
It is important to note that achieving net zero energy sector CO2 emissions by 2050 depends on fair and effective global co-operation.
The pathway to net zero emissions by 2050 is very narrow. All countries will need to contribute to deliver the desired outcomes; advanced economies take the lead and reach net zero emissions before the developing economies do so.
Global collaboration facilitates the development and adoption of ambitious policies, drives down clean technology costs and scales up diverse and resilient global supply chains for critical minerals and clean energy technologies.
Enhanced financial support to emerging market and developing economies plays a critical part in this collaboration. The transition from a fossil-fuel dominated energy system to one with zero emissions would require trillions of dollars of investment in new production, distribution and consumption equipment worldwide.
New investments could support millions of new jobs in construction and manufacturing, but policymakers are struggling to decide whether to recover the costs from consumers or taxpayers.
In most countries, the cost of providing energy commodities and services, including gas, electricity, other heating fuels, and road fuels, is normally recovered from users in the same way as other services and merchandise.
The proposed energy transition is likely to be expensive, with a high proportion of upfront capital costs for new generating units, transmission and distribution systems.
Precise details differ in other countries, but the poorest households almost always spend the highest proportion of their income on basic energy services for heating, cooking, lighting and surface transport.
In many cases, the proposed transition would swap higher upfront capital costs for lower long-term fuel bills, for example by replacing gasoline-fuelled private cars by battery-driven vehicles charged by wind power.
Unless it is handled carefully, the energy transition could worsen energy inequalities and energy-related poverty.
Today’s difficulties call not for slowing but for accelerating the transition toward renewable energy sources such as solar and wind.
Indeed, it is believed that failing to do so would create even greater risks. Above all, the objective is to limit greenhouse gas emissions to avert a climate catastrophe.
Current climatic conditions like prevalent floods across the world, summer heat records in multiple regions, wildfires everywhere - the arctic region included and so on, are the latest reminders of the intensifying threat to people and planet.
However, it has become even clearer that other forms of our security also depend on the transition.
Shifting toward renewable energy can help mitigate such issues. By generating cost-effective, clean energy locally, countries can strengthen their economic resilience and their national security.
For now, greater energy security thus means having diverse sources of supply, of which more comes from renewables.
The diversity of supply will be essential to longer-term energy security too. Today, much of that diversity comes from fossil fuels.
However, this must change radically if the world is to have a chance of limiting climate change. Massively increasing renewables’ share within power production is clearly critical to the drive toward energy security.
And yet it is still only part of what is needed. Electrification and improving energy efficiency are also essential.
Switching from fossil fuel burning to electricity from renewable sources in transport and industry has great potential to lower emissions. The same goes for increased efficiency – using less energy to do more.
The less energy-intensive we become, the more our energy security increases.
Over the next thirty years, $125
trillion may be required to achieve
net zero emissions. Aside from the
amount of capital required, there are
many risks along the way.
