Priorities for a net zero-carbon economy

  • Sep 17, 2020
  • Statnett

A coalition of 45 leaders from global energy producers, energy-intensive industries, financial institutions and environmental advocates argues in this report that the world can and must achieve net zero greenhouse gasemissions by mid-century, and that in the long term “zero must mean zero”, with no permanent rather than transitional reliance on negative emissions to balance continuedlarge-scale emissions from the energy system and industry. It also lays out steps

needed in the next decade to achieve that objective. CEO Auke Lont of Statnett has been part of the coalition.

In its new report Making Mission Possible – Delivering A Net-Zero Economy, the

Energy Transitions Commission (ETC) shows that clean electrification must be the

primary route to decarbonisation: it highlights that dramatic falls in cost of renewable

energy make this easily affordable and argues that all growth in electricity supply should

now come from zero-carbon sources with no need to build any new coal-fired power

capacity to support economic growth and rising living standards.

The report demonstrates that it is technically and economically possible to have a

carbon-free economy by around mid-century at a total cost of less than 0.5% of global

GDP by taking three overarching steps:

• Using less energy while improving living standards in developing economies, by achieving dramatic improvements in energy efficiency and shifting to a circular economy

• Scaling up clean energy provision by building massive generation capacities of cheap clean power, at a pace five to six times higher than today, as well as expanding other zero-carbon energy sources such as hydrogen

• Using clean energy across all sectors of the economy by electrifying many applications in buildings, transport and industry, and deploying new technologies and processes using hydrogen, sustainable biomass or carbon capture in sectors that cannot be electrified, like heavy industry or long-distance shipping and aviation

The signatories acknowledge that this report is published in “an unprecedented context”.

They argue that the COVID-19 pandemic has demonstrated the unpreparedness of the

global economy to systemic risks and that the massive public spending now being

dedicated to stimulating economic recovery constitutes a unique opportunity to invest in

a more resilient economy.

The ETC estimates that additional investments required to achieve those goals will be in

the order of US$1 trillion to US$2 trillion per year, equivalent to 1% to 1.5% of global

GDP. This represents only a small increase of global investments which currently amount

to about a quarter of global GDP, and would contribute to global economic growth.

“There is no doubt that it is technically and economically possible to reach the zero-carbon economy which we need by 2050; and zero must mean zero, not a plan which relies on the permanent and large-scale use of “offsets” to balance continued GHG

emissions. But action in the next decade is crucial – otherwise it will be too late.”, ETC

Co-Chair Adair Turner said.

Fellow ETC Co-Chair Ajay Mathur added, “In India as in many countries, climate change

is already impacting people and disrupting the economy. Governments from developed

and developing countries will find in this blueprint practical recommendations on how to

enhance their national strategies and ramp-up their commitments as part of the Paris

agreement.”

The report outlines 3 critical priorities for the 2020s and practical actions that nations

and non-state parties can commit to in the run up to the COP26 United Nations

Framework Convention on Climate Change in November 2021 to put mid-century

objectives within reach.

1. Speed up the deployment of proven zero-carbon solutions – governments,

investors and corporates need to work hand-in- hand to build up massive

capacities of zero-carbon power generation to enable the clean electrification of

the economy.

2. Create the right policy and investment environment – by removing fossil

fuel subsidies, increasing carbon prices and combining them with border carbon

adjustments in the absence of an internationally-agreed carbon price, putting in

place regulations – like fuel mandates or lifecycle emissions standards for

manufactured products – that create additional incentives for decarbonisation

where price signals are insufficient, and working with financial institutions to

channel investment not only to green activities but also to energy-intensive

industries making their transition.

3. Bring the next wave of zero-carbon technologies for harder-to-abate

sectors to market – so they can be deployed in the 2030s and 2040s, by

focusing public and private R&D on - critical technologies (like hydrogen,

sustainable fuels or carbon capture), creating demand for new green products and

services (through “green buyers’ clubs, public procurement, and product

regulations), and financing the first commercial-scale pilots through smart use of

de-risking public funds alongside private capital.

The ETC’s blueprint is intended to allow all developed economies to reach net-zero emissions by 2050 at the latest, including China which has the resources and technology leadership to become a rich developed zero-carbon economy by 2050. All developing nations would be able to reach net-zero emissions by 2060 at the latest, but require development finance to de-risk and attract private green investment.

The report integrates findings from ETC’s landmark 2018 Mission Possible report and

subsequent region-specific studies with updated analysis to reflect the latest trends in

the readiness and cost of key emission-reducing technologies.

To read the full report, visit the ETC website

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