Economic Transition Monitor - The path to net-zero

This is the first in what will be a regular monitoring of the path to net-zero. The first edition focuses on the C20 – the 20 largest CO2 emitter countries (see Figure 1). These countries accounted for 80% of global CO2 emissions in 2020. Now that COP-26 is behind us, we examine the net-zero targets set by each country (though not all of them have yet established a target). To analyse the likely success in meeting those targets we show recent trends in emissions, emissions per capita and the CO2 intensity of economic activity (net-zero requires the latter two metrics to fall to zero). We also make a distinction between production-based and consumption-based emissions (the former is the way that data is commonly presented but it is unfair to countries that are sources of goods and raw materials that are consumed in other countries). Recent trends are not very encouraging but where there is a will, there is a way. We believe that technology will play a critical role, especially if developing countries are to reach their full potential in a “clean” fashion.
Main conclusions:
- Unfortunately, global emissions continue to rise and we doubt that temperature change can be limited to 1.5 degrees Celsius. The challenge is to limit by how far that target is exceeded
- 17 of the C20 have set net-zero target years (either in law or announced)
- Of the three that have not, Mexico is discussing the topic
- Based on recent trends, only the UK will meet its net-zero target (2050)
- Of the other countries, eight are still seeing a rise in emissions per capita and those trends will eventually need to be reversed if net-zero is to be achieved
- New technologies will be critical in reducing the CO2 intensity of economic activity but will need to be shared with poorer countries if the world is to avoid the worst climate change outcomes
- Governments play a leading role but the private sector will be critical in channelling funds in the right direction
Technology corner:
- In each edition we will focus on some key technological developments
- This time we take some broad-brush strokes
- We highlight carbon capture, carbon removal, carbon storage, alternative energies (hydrogen/ammonia), energy storage (such as pumped storage hydropower) and blockchain for carbon tracking and accounting.