What Is Net Zero Coalition? Learn Everything You Want To Understand
ClimateAngels | Aug 26, 2023
What is Net Zero? The scientific definition, meaning, and example
Net Zero Definition: “Net Zero” aims to balance emissions with removals, rather than minimizing all kinds of emissions as close to zero as possible. The goal is to stabilize and eventually reduce the overall concentration of greenhouse gases (GHGs) in the atmosphere to mitigate climate change.
Net Zero Meaning: Net Zero is achieved when the GHGs released by human activities are balanced with the equivalent amount of GHGs removed/reduced from the atmosphere. For instance; reducing emissions, increasing carbon sequestration through reforestation, or employing climate technologies like carbon capture, utilization and storage (CCUS/CCU).
Net Zero Example: Moving to a green economy and clean renewable energy. Remaining emissions must be actively absorbed, with healthy oceans and robust forests playing a crucial role in this vital process.
Decarbonization (and leaning more towards energy conservation) is the key to achieving net zero carbon emissions by 2050.
Source: United Nations
The pressing issues of climate change risk and the journey to achieve net zero emissions, the interconnected threat of biodiversity loss, social inequalities, and the ongoing debate surrounding greenwashing and the true essence of ESG are the main focus of the Net Zero coalition and Global Financial Alliance For Net Zero (GFANZ).
Why Net Zero?
Temperatures are at record highs, and the signs of a changing climate are all around us. The culprit? Carbon emissions in our atmosphere, emanating from various sources—transport (rail, road, sea/ocean, and air), industry (coal, cement, steel, and all manufacturing units across the globe), farms, cities with poor infrastructure and administration, to name a few.
Source: United Nations
The consequences of this unchecked rise in carbon emissions are gradually creating a perilous future for the current beings, and the beings about to come into the world.
Warming above 1.5 degrees Celsius proving to be not only costly but potentially catastrophic, negatively impacting lives and livelihoods. Thus, in the battle against climate change, every increment of warming matters; every action counts.
Source: United Nations
But here’s the sign of hope: ‘Net Zero’, and it is possible if we Act Now. The urgency of the matter cannot be overstated. Also, the path to net zero emissions is not only a commitment to future generations but a concrete action plan to secure a sustainable and resilient world for every life on planet Earth.
Therefore, to curb the relentless advances of global warming, all nations must act decisively and swiftly. The time to make it right is now.
“Government or private sector commitments to net-zero cannot be a mere public relations exercise.” – ANTÓNIO GUTERRES, Secretary-General at United Nations
What Is Net Zero Coalition?
The Net Zero Coalition unites nations (also referred as net zero countries ), cities, businesses, and institutions in a global push to achieve net zero emissions by 2050. While Net zero means cutting emissions to near-zero levels and offsetting any remaining emissions through measures like carbon absorption by oceans and forests.
Source: United Nations
Vital to preserving a livable planet, this step addresses the urgent need to limit global warming to 1.5°C (above pre-industrial levels).
Despite a growing commitment from 70+ countries and many organizations are in net zero coalition, translating these climate change pledges into effective climate change action is still a challenge. And to succeed, all governments, particularly major emitters, must significantly enhance their climate targets and take immediate, bold steps to cut emissions.
Which countries are the Top 7 Emitters of GHGs?
Most of the carbon emissions come from the following seven countries:
1. China
2. The European Union (E.U)
3. United States of America (the U.S.A)
4. The Russian Federation (Russia)
5. Brazil
6. India
7. Indonesia
What about the Group of Twenty (G20)?
The Group of Twenty has 43 members, which is a group of 19 countries – “Argentina, Brazil, India, Italy, the U.S.A, the United Kingdom – U.K, Turkey, Mexico, E.U, Republic of Korea – South Korea, Saudi Arabia, South Africa, Australia, China, Canada, France, Germany, Russia, and Indonesia.” The G20 alone accounts for seventy five per cent (75%) of global GHG emissions.
Net Zero: Current Statistics
Source: UNFCC
Empowering Robust Net-Zero Commitments
Governments around the world bear the most significant responsibility in the shift towards achieving net zero carbon emissions by the middle of the century. However, it is equally imperative for businesses, investors, cities, states, regions, and common people to fulfil their commitments to net-zero emissions by 2050.
Source: United Nations
An esteemed panel of experts, assembled under the leadership of the UN Secretary-General and presided over by former Canadian Minister Catherine McKenna. The panel devised more robust and transparent criteria for net-zero emissions commitments from non-governmental and non-State entities, including:
- Businesses
- Investors
- Cities and regions
It is to accelerate the implementation of Net Zero commitments pivotal step towards combating ‘net-zero greenwashing’ and fostering genuine climate action.
The Road to Net Zero
It was not until the year 2015 that world leaders came on the same page and signed the global climate agreement – the “Paris Agreement’’.
Source: United Nations
Here’s the roadmap to achieve Net Zero by 2050:
2015: 196 nations adopt the historic Paris Agreement
Back in 2015, a ground-breaking moment unfolded before the people when 196 countries came together to sign the historic Paris Agreement.
It marked a historic turning point. It was forged with a singular aim: to curb the relentless advance of global warming and bolster our defenses against the adversities of climate change.
2015 – 2017: The beginning of NDCs
In the years following this pivotal agreement, the nations involved began to set forth their individual strategies for climate action.
These comprehensive plans, referred to as nationally determined contributions (NDCs), laid out the steps each country would take to play its part in the collective battle against climate change.
However, it soon became evident that these initial commitments, even if fully realized, would not be sufficient to avert the dire consequences of global warming.
2020 – 2021: Revision of NDCs and the start of Scientific Consensus
Countries embarked on the task of revising their NDCs, recognizing the urgency of the situation.
Science had unequivocally affirmed that our window of opportunity to effect meaningful change was rapidly shrinking.
In alignment with this scientific consensus, these revised plans needed to incorporate swift and resolute actions to curtail carbon emissions significantly. The ultimate goal was to reach a state of net-zero emissions by the year 2050.
2030: At least a 45% reduction in emissions to keep warming less than or equal to 1.5 degrees
Fast forward to the year 2030, a crucial milestone on our journey towards a sustainable future. This decade can be a deciding factor in accelerating the net zero emissions by 2030.
To stay on course and adhere to the aim of limiting global warming to 1.5 degrees, countries had to take resolute action.
This action translated into cutting emissions by a minimum of 45 percent compared to the levels recorded in 2010. It was a daunting but essential task that demanded unwavering commitment.
2050: The complete transition to Net Zero
Finally, in the year 2050, our collective voyage toward a world free from the scourge of excessive greenhouse gas (GHG) emissions reaches its destination. The transition to a state of net-zero emissions is not just an aspiration; it’s a necessity.
By the year 2050, the world must have fully completed this transformation. This can result in ushering in an era where global carbon footprint is balanced by actions that remove or offset an equivalent amount of greenhouse gases.
This milestone will mark not just a commitment but a legacy for future generations—a world where the climate crisis has been calmed, and sustainability prevails.
How can business leaders lead and pave the way to create value in the net-zero era?
With the unstoppable push towards a net-zero future and nearly 90 percent of emissions targeted for reduction, businesses face higher expectations than ever before.
To lead in this era, they must shift from a defensive stance to a proactive one. This means embracing climate-friendly products and green infrastructure to meet rising demand. Early adopters can gain a competitive edge by leveraging affordable green financing for carbon-free production and securing contracts for scarce, eco-friendly materials.
Several companies are already seizing the opportunities at hand, and their approaches can serve as inspiration for others.
For example; Moody’s, MSCI, Northrop Grumman, Bank of America, S&P Global, CSX, Philip Morris International, Raytheon Technologies, Procter & Gamble, and Eli Lilly Pharmaceuticals are the top ten (10) global companies that are taking the Net Zero By 2050 mission seriously.
Note: Here’s the list of ‘Top 100 companies committed to Net Zero By 2050’.
Following are the four key tactics that stand out for businesses and global leaders to pave the way for Net Zero Era:
1. Transforming Business Portfolios
Pay special attention to industry segments with significant growth potential. This entails realigning your business to capitalize on emerging opportunities driven by the transition to a net zero economy.
2. Building Green Businesses
Create green-focused subsidiaries or divisions that enable you to penetrate new markets with innovative climate-friendly solutions.
3. Differentiating with Green Products
Develop and promote green products and new value propositions in your existing markets. This not only helps you gain market share but also allows for premium pricing.
4. Decarbonizing Operations and Supply Chains
Take concrete steps to reduce carbon emissions within your operations and across your supply chains. It will only align with sustainability goals but also help you in reducing costs and improving efficiency.
Remember: For business leaders ready to take the offensive mode, it could generate over $12 trillion in annual revenues by 2030. These opportunities span a wide range of sectors and activities, from renewable energy to sustainable transportation and beyond.
Can Climate Technology make a difference?
YES. Climate technology encompasses a wide range of innovations dedicated to cutting emissions and combatting climate change. It covers various fields, all with the goal of slowing down global warming and promoting eco-friendly practices.
While some of these technologies are still in the research and development (R&D) phase, it’s estimated that most of the emissions reduction needed to achieve net-zero will come from proven solutions. Various climate tech startups and climate tech companies are engaged in creating solutions that can help us rapidly fight the war against climate change. All they need is a continuous funding.
Hence, it is the need of the hour to invest in the technology of the future that has the immense potential to generate great returns in terms of ROIs for the invested money and a sustainable, green future for generations to come.
Here are five key areas poised to attract $2 trillion in capital for climate tech by 2025:
1. Electrification – This includes advancements like better electric vehicle (EV) batteries and more energy-efficient building systems.
2. Agriculture – This field focuses on developing zero emission farming equipment and bioengineering techniques.
3. Power Grid Improvements – Long-duration energy storage and high-efficiency materials are essential components of upgrading our power grids.
4. Hydrogen – Efforts are underway to build infrastructure and facilitate cost-effective hydrogen production.
5. Carbon Capture, Use, and Storage (CCUS) – These technologies are vital for decarbonizing hard-to-reduce emissions sectors and removing greenhouse gases from the atmosphere.
Climate technology not only enhances existing processes to reduce carbon emissions but also provides innovative ways to actively combat climate change.
Is this the Right Time to Invest?
Over the past decade, notable progress has been made, such as a nearly ninety percent (90%) cost reduction in some green/renewable energy projects. With increasing capital investment and government support for low-carbon innovation, the potential and the scope for climate technology is great, despite the significant challenges. Meaning, the signal is GREEN to start investing and earning benefits.
More Climate Change & ESG Investing Insights for You
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- Why Climate Tech Innovation Is Important?
- India’s Investment Against Climate Change
- Venture Capital Investment In Climate Tech Has Tripled In The Last Year
- Reasons why Climate Tech Is Thriving Despite General Market Slowdown
- What is climate investing?
- Climate Tech Outlook 2023
- AgriTech Investment Landscape
- What Is ESG Investing and Why Is It Important To Consider?
- What’s Happening Around ESG Investing? The Latest Trends of 2023
References
1. https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-net-zero
2. https://www.mckinsey.com/capabilities/sustainability/our-insights/playing-offense-to-3. create-value-in-the-net-zero-transition
4. https://www.un.org/en/climatechange/high-level-expert-group
5. https://www.un.org/en/climatechange/net-zero-coalition
6. https://www.epa.gov/water-research/net-zero
7. https://www.forbes.com/lists/net-zero-leaders/?sh=7f7cd18255de