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Increasing the chances of achieving net zero

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Failure is not an option. Countries and companies globally are taking action to pursue net-zero emissions, but their plans could easily be derailed by myriad factors. Here are some considerations for helping to keep them on track.

Global momentum toward decarbonisation continues to grow. The 2021 UN Climate Change Conference of the Parties (COP26) in Glasgow—the fifth COP meeting since the historic 2015 Paris Agreement treaty—produced stronger national climate action plans, a landmark pledge to cut methane emissions, and an agreement to phase out coal and fossil-fuel subsidies. Despite recent geopolitical turmoil, corporate net-zero pledges continue to increase, and the hard work of redirecting global investment dollars toward sustainable investments is fully under way.

Broad consensus among developed countries, leading companies, and other organisations has evolved regarding the types of swift and compre­hensive actions necessary to get to net zero in areas such as electric-vehicle adoption, electrification of building heating, low-carbon steel production, and zero-carbon electricity generation.

Beyond those, however, many other technical solutions exist that could help a region or country achieve a sufficiently swift decarbonisation trajectory. Determining the right steps to take – and when to take them – is key not just for policy makers and public-sector organisations, but also for private-sector leaders trying to determine their companies’ emissions-reduction strategies.

Image credit: McKinsey and Company | McKinsey Insights

Image credit: McKinsey and Company | McKinsey Insights

Many organisations have performed sophisticated full-system modelling using extensive libraries of expected future technology cost trajectories to design comprehensive pathways that aim to minimise aggregate costs while maximising overall benefits. McKinsey, for example, has published cost-optimal decarbonisation pathways for the European Union and for individual countries such as Japan and the Czech Republic.

In 2021, Princeton University’s Andlinger Center for Energy and the Environment introduced the Net-Zero America plan for the United States, and in 2020 the World Resources Institute released one for Hong Kong. The International Energy Agency’s Net Zero by 2050 is a road map for the global energy sector to eliminate net energy-related CO₂ emissions by the middle of the century.

These kinds of analyses often inform government and corporate planners as they seek to shape and navigate the net-zero transition. But while they serve as valuable starting points, these pathways are vulnerable to critical system-level changes not being reached in time. In addition, their focus on cost-optimising the transition can leave little margin for error. Here, we offer some considerations for policy makers and decision makers looking to reduce the risk of failure while maximising the chances of achieving the Paris Agreement goals.

 The fragility of current net-zero pathways

With the remaining carbon budget to limit global warming to below 1.5°C is rapidly running out, the consequences of significant delays or detours on the road to net zero would be drastic. And the consensus pathways, while technically feasible and largely cost-optimal, may be more brittle than many realise. They are contingent on critical requirements being in place and the successful and timely achievement of many ambitious system-level changes.

Some plans may be so cost-optimised that they leave little room for deviation from the plan.

In fact, some assumptions and preconditions may not be achieved, such as the assumed hydrogen technology cost and readiness evolutions, the renovation rate for home heating system replace­ments, and the substantial changes to land-use permitting and vehicle ownership laws. This could mean failing to achieve these crucial emission reductions.

We are still far off the required emissions trajectory, and due to the inter­dependent nature of the changes required, delays in one place could have cascading systemic consequences. For example, a slowdown in the roll-out of new electricity transmission lines could hamper the deployment of wind and solar power, which could postpone investments in green hydrogen supply hubs, which are required to decarbonise several sectors.

This is an extract of the original article available here.