Is ‘net zero’ much ado about nothing?

Jay Owen Reforming Global Finance, SRI/ESG News, Beyond GDP, Latest Headlines

“Ethical markets highly recommend this overview by our wise colleague Joel Makower, dissecting all the issues around promises of “Net Zero“.  Must reading!

~Hazel Henderson, Editor“

 

 

 

 

 

 

 

Monday, May 10, 2021

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Is ‘net zero’ much ado about nothing?

It feels almost quaint to remember way back when “80 by 50” — that is, an 80 percent reduction in greenhouse gas emissions by the year 2050 — was a bold goal for a company or government entity to make. It was seen by many as audacious, possibly unachievable, but still a necessary target.

The “way back when” in this case seems to be around 2014.

Ah, yes: The good old days.

Today, “80 by 50” would not pass muster. Net zero is the near-universal goal of nations, states, provinces, cities, companies, universities and others. And even that goal sometimes gets knocked as being too little, too late.

This week, as the full fleet of GreenBiz weekly newsletters focuses on the topic of net zero, I thought it might be helpful to start off with some simple questions that seem to encircle that goal. The five questions below represent just a sampling of issues surrounding what net zero means — and doesn’t. These questions and others will be central to our upcoming (and free) VERGE Net Zero conference in August.

First, what is net zero?

For those not yet up to speed, net zero refers to the goal of emitting no greenhouse gases by a specific date, typically 2050. However, Germany just committedto reaching this goal by 2045. Corporate signatories to the Climate Pledge have committed to net zero by 2040. IBM saidit would reach that milestone in 2030. The bar continues to move. Such commitments often are coupled with an interim goal of cutting emissions in half by, say, 2030.

Net zero can be achieved, first and foremost, by cutting or eliminating greenhouse gas emissions and, secondarily, by offsetting any remaining emissions through such actions as planting trees, investing in renewable energy projects that replace fossil-fuel energy, or investing in novel carbon-removal technologies such as direct air capture.

The concept of net zero goes back nearly a decade, in the run-up to the 2015 COP21 climate conference in Paris. According to one telling, a group of women climate leaders met at a Scottish estate in 2013 to discuss bold climate goals that could be enacted two years later in Paris. After a heated debate, they agreed that the goal should be to pursue net zero by mid century. In the Paris Agreement that ultimately resulted, negotiators agreed “to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.”

That is, to achieve net-zero emissions.

Is net zero the same as carbon neutral?

The terms are often used interchangeably, though there are subtle but critical differences. You can become carbon neutral simply by buying offsets — for a year’s worth of driving or air travel, for example. Net zero would require that you drive or fly as little as possible, offsetting only what’s unavoidable. The same principle holds for any other activity — for a company, building, factory, product, community or nation.

In some cases (as with ExxonMobil, for example), companies have committed to net-zero carbon intensity, a term that means that the amount of carbon per unit of measure does not increase, even as overall emissions may rise. Exxon has come under fire from activist investors for a stance that, critics say, disingenuously claims to be net zero but, in fact, will lead to an increase in overall emissions in the coming years.

Does net zero rely too much on offsets?

Companies are being increasingly criticized for investing more into offsets than into actual emissions reductions. That is, simply buying offsets in lieu of any emissions reductions is taboo. But, given that there is no universal standard about how much offsetting is the “right” amount, it’s an open field for organizations to claim pretty much whatever they want. But that could change. The Science Based Targets initiative is working on what it calls “the first global standard for net-zero business.”

Is net zero achievable with existing technologies?

Most experts believe we have the technologies, though some are not yet cost-competitive.

But many are. Cutting energy use — the first step in reducing emissions — relies on a sizable toolbelt of well-oiled energy-efficiency technologies with relatively fast returns on investment. The next steps are harder, however. Electrification — transforming cars, buildings, factories and other things to operate on electricity rather than, say, oil or natural gas — is a fast-emerging field. And affordable, enabling technologies — electric vehicles and grid battery storage, among them — are quickly coming to market.

Beyond that is carbon capture, a portfolio of technologies that remove greenhouse gases from the atmosphere and store them securely for decades or centuries, including in products such asconcrete. And there are carbon-free fuels that show great promise, such as blue and green hydrogen, but that are still nascent and expensive.

Is net zero greenwash?

Some think so. Critics say that the overreliance on offsets and unproven technologies, combined with the roughly three-decade time horizon to achieve most net-zero goals, enable companies to continue business as usual for the foreseeable future while still maintaining a net-zero stance. As a result, as I noted a couple months back, net zero may be in for a backlash.

“Far from signifying climate ambition, the phrase ‘net zero’ is being used by a majority of polluting governments and corporations to evade responsibility, shift burdens, disguise climate inaction, and in some cases even to scale up fossil fuel extraction, burning and emissions,” according to the watchdog group Corporate Accountability, which published a report last fall on “How ‘net zero’ targets disguise climate inaction.”

“The term is used to greenwash business-as-usual or even business-more-than-usual,” it continued. “At the core of these pledges are small and distant targets that require no action for decades and promises of technologies that are unlikely ever to work at scale, and which are likely to cause huge harm if they come to pass.”

Activists, including investors, aren’t likely to accept any old net-zero commitment without holding it to intense scrutiny. For companies, that means the bar will likely rise over time.

The overriding question, at the end of all this, is how companies and others will lean into their net-zero commitments in the years ahead — whether they will be largely check-the-box activities or a truly disruptive force. Right now, the answer is up for grabs.

These are among the issues worth pondering, debating and embracing. And, indeed, they’ll be front and center at our upcoming Net Zero event.

Nothing less than our lives and future rest on the answers.

Taking care of business

Two great webcasts coming up:

  • On May 18, I’ll be hosting a webcast featuring Interface, the flooring company, and real estate leaders on on how organizations can make actualized progress towards net-zero by reducing the carbon associated with the design and construction of their buildings. Register here.
  • And on May 20, join SilviaTerra for a complimentary webcast on how corporate net-zero goals can drive impact beyond climate — from strengthening of rural communities to improving habitats for biodiversity. Register here.

 

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Sarah Golden, in “The latest trends in renewable energy procurement”