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Solutions for the future and the progress we have made
Globally, several nations have formed a united front against the growing issue of climate change, committing themselves to achieving net-zero emissions by 2050, or even 2030. In order to meet this target, greater coordinated action from both governments and the private sector is required.
Comprehensive policies and commercial decisions over the next few decades will determine the success of the net-zero target, and according to the International Energy Agency (IEA), “total CO2 emissions will need to fall by around 45% from 2010 levels by 2030”. Adopting industry-focused solutions is the key – corporations in various sectors will have to reduce their carbon emissions, bearing in mind proposals for climate-neutrality such as that of the European Commission.
On an industry level, given the high carbon emissions of several sectors, what will individual sectors have to focus on and how will investment in technology accelerate this process of decarbonisation? This article takes a look at some of the solutions that can be advanced as we strive to meet the net-zero target.
Carbon emissions in sectors
Fig. 1
Figure 1 above from the European Environmental Agency reveals the carbon emissions of various sectors and their subsequent proportion. Looking at Europe and the negative growth in carbon emissions for Energy, Waste and Industry among others, it is clear that some industries will be able to decarbonise more quickly than others. Specifically, the energy supply or power industry will be able to continue its current path of decarbonisation, given the current advancement of wind and solar power technologies.
On the other hand, the transport industry, in particular, will need to focus its efforts on developing more technology and electric vehicles. According to McKinsey & Company’s research, this is already in adoption for vehicles of appropriate sizes, which excludes aircrafts and ships that are too big. Waste management and manufacturing in Industry will require technology that is still being developed such as effective recycling and sorting facilities and incinerators and this will prove to be challenging but emissions from Industry manufacturing can ultimately be offset through carbon sequestration or investment in land reforestation. Nonetheless, development and innovation in technology will be key and electrification on a large-scale will continue to drive down emissions.
Other industries will require radical change in consumer preferences to fight carbon emissions, most notably, meat consumption being the main cause of agriculture emissions. Yet, technological advancements and investment could potentially make products like cultured meat mainstream for consumers. Another example of shifting consumer preferences in industry can be found in fashion. As the circular economy gains momentum, carbon emissions that go into the production of garments and the entire supply chain could be reduced. Clearly, demand-side factors involving the consumers’ demand for more sustainable products have been and will continue to be main drivers of decarbonisation.
Fig. 2
Evidently, Figure 2 from the International Energy Agency shown above illustrates the dominant use of non-renewables in Industry worldwide, but there has been a decreasing trend which will accelerate with investment over time. Crucially, the largest contributor to carbon emissions, namely the energy industry, has made strides in the past decades. Despite fossil fuels still being a primary source of energy for most economies, globally, renewable power will lead the change and provide energy for other sectors, having an effect on carbon emissions on other industries as well.
Technology
Having identified the energy industry as the main driver for meeting net-zero emissions, there will need to be an increase in specific sources of energy. One key source would be bioenergy, and land will have to be used in an efficient way in order for bioenergy to be utilised.
According to the International Agency, alongside the expansion of bioenergy, global hydrogen production may encourage and expand hydrogen use to all sectors, reaching a substantial 13% of final energy demand. For this to happen, infrastructure such as hydrogen pipelines will need to be further invested in as it is essential to increase accessibility for such infrastructure to become more widespread.
With existing technologies such as solar and wind power, there will be a need to increase the scale of their use so that they cover more industries and form a greater share of our energy demand. Policymakers and business leaders should continue to propel this growth and increase the momentum in the energy industry.
Investment
To reach these projected targets, investment from both the public and private sector is essential. Governments around the world and companies will have to be even more willing to shift their business practices towards new technologies. Innovation must be accelerated and funding for the development of technologies will be imperative – this will be accelerated by investments in R&D and infrastructure.
Sustainable finance will also play a role with private investors such as UBS Asset Management aiming for their portfolios to be decarbonised by 2050. By taking into account environmental, social and corporate governance factors, the finance industry will be able to precipitate decarbonisation efforts and invest in new technology and key infrastructure to achieve the net-zero target.
Concluding remarks
A main part of the world’s transition away from carbon and into a sustainable future will require governments and business leaders to actively create new solutions across various sectors, especially, the energy sector. Investment decisions and interventions made by the public and private sector are paramount to achieving the world’s net-zero target, fostering a conducive environment for technological growth and sustainability. It is evident that as we make this transition to a decarbonised economy, consumers, investors and corporations alike will have to adopt carbon-neutrality as the new normal.
References
1. Greenhouse gas emissions by aggregated sector. (2019, December 19). Retrieved January 29, 2021, from https://www.eea.europa.eu/data-and-maps/daviz/ghg-emissions-by-aggregated-sector-5#tab-dashboard-02
2. How the European Union could achieve net-zero emissions at net-zero cost. (2021, January 27). Retrieved January 29, 2021, from https://www.mckinsey.com/business-functions/sustainability/our-insights/how-the-european-union-could-achieve-net-zero-emissions-at-net-zero-cost
3. Iea. (n.d.). Achieving net-zero emissions by 2050 – World Energy Outlook 2020 – Analysis. Retrieved January 29, 2021, from https://www.iea.org/reports/world-energy-outlook-2020/achieving-net-zero-emissions-by-2050
4. Iea. (n.d.). Technology needs for net-zero emissions – Energy Technology Perspectives 2020 – Analysis. Retrieved January 29, 2021, from https://www.iea.org/reports/energy-technology-perspectives-2020/technology-needs-for-net-zero-emissions
5. Investor group makes net-zero carbon pledge to tackle climate crisis. (2020, December 11). Retrieved January 29, 2021, from 6.https://www.theguardian.com/business/2020/dec/11/investor-group-makes-net-zero-carbon-pledge-to-tackle-climate-crisis
7. The race to zero emissions, and why the world depends on it | | UN News. (n.d.). Retrieved January 29, 2021, from https://news.un.org/en/story/2020/12/1078612