Net-Zero offers optimism amidst a crisis
There won't be many that look back on 2020 fondly, but the energy and ambitions from corporates and nations to reach net-zero emissions and alleviate the climate crisis can provide sustainability professionals with some much needed optimism during the despondency of the Covid-19 pandemic.
The second lockdown in the UK begins this Thursday. Fireworks displays for bonfire night have been cancelled, trick or treating for Halloween remained limited, and a cloud of doubt still hangs over the festivities of Christmas. The month-long lockdown is the minimum requirement to combat rising coronavirus cases, but it doesn’t make the pill any easier to swallow.
The UK public had been told that the original lockdown would allow the Government to put measures in place to ensure the safe re-emergence of societal interaction. It didn’t. A promised “world-leading” test and trace initiative is having a “marginal” impact, at the cost of £12bn. In contrast, WWF has warned that coastal damage caused by climate change could cost the UK more than £12bn every year by 2050.
The near two-and-a-half-hour delay waiting for Boris Johnson to announce the inevitable on Saturday evening, was apt for Government that is more inclined to allow the Prime Minister’s senior advisor to drive to Barnard Castle to test his eyesight than listen to its scientific advisory on a two-week “circuit breaker” to help combat rising Covid-19 cases. Large parts of society feel let down by this Government’s approach to the pandemic.
Alas, there is no circuit breaker, and indeed, no break from the circus at number 10. A lack of faith in the powers that be is a potentially lethal combination when looking at mental health. Key workers, like frontline NHS staff, are worn out, some students are stranded at halls, and for many, the thought of a second lockdown is another layer of stress and uncertainty that many will struggle with.
It might sound like I’m being overly political, but strangely enough, that is where my optimism stems from. You see, climate action shouldn’t be a political voting point (looking at you US), but rather it is a human necessity and therefore a political prerequisite.
If the Conservative Government is failing to follow the science during the pandemic, it has at least, heeded the warning from the scientific community on climate change. The Intergovernmental Panel on Climate Change’s (IPCC) Special Report has outlined the severe planetary impact of failing to limit global heating to 1.5C.
The IPCC Special Report document warns that the world is already 1C warmer than pre-industrial levels, and that an increase to 2C would significantly worsen the risks of drought, floods, extreme heat and poverty for hundreds of millions of people. The report predicts that if the world can become carbon-neutral by 2047, we will have a 66% chance of meeting the most ambitious end of the Paris Agreement pledge.
The IPCC document led to the creation of the UK’s net-zero emissions target for 2050, following advice from the Committee on Climate Change (CCC). Since the UK enshrined its target into law, the European Union, China and Japan have emerged amongst a cohort of nations committing to net-zero. In fact, as of February 2020,49% of the world’s annual GDP is now covered by nations, regions and cities that are legislating for a net-zero emissions target.
Policy shapes markets. The focus on climate action to date has seen utility-scale solar PV and onshore wind become the cheapest forms of new-build energy generation across two-thirds of the global population.
With the Energy Transitions Commission (ETC) finding that just 0.5% of global GDP will be required to reach net-zero by 2050, it appears we are at a global tipping point, where nations, corporates and investors can tip the scales to push towards net-zero. However, corporates and nations must first realise that net-zero is the direction of travel.
The pandemic has forced every single business, regardless of size or sector, to rethink. Not all businesses are proactive when it comes to scanning the horizons for future disruptions, whether they be climate, disease or policy-related. Many are entrenched in their “business as usual” ethos, some through sheer obliviousness and stubbornness, but many because they don’t have the capacity to focus on the larger issues.
The pandemic has changed that. “Agile working” is a phrase I’ve heard a lot of during recent discussions with sustainability professionals, and all organisations have been forced into this agile mindset, pivoting from one problem to the next over the last 11 months. As businesses scramble to come up with contingency or resurgence plans, or ponder over finances as facilities are forced to close, the green agenda offers an opportunity amidst the crisis.
As more nations align to the net-zero trajectory, more markets are shifted into lowering costs of low-carbon technologies. Research from EDF Energy, headline partners for Net-Zero November, found that measures such as installing energy-efficient lighting and better heating management could create more than £45m in energy cost savings for businesses. By framing the green recovery as economic opportunity, as well as one aligned to business purpose and societal demands, sustainability professionals have a way into a boardroom that is frantically looking for new ideas to improve long-term resiliency.
To state the obvious, the pandemic has disrupted everything, but so will the net-zero transition. Global emissions are projected to fall by 8% in 2020 as a result of Covid-19. The IEA notes that it would be the largest decrease in emissions every recorded and would be six times larger than the previous record drop recorded in the aftermath of the 2009 financial crash.
In contrast, analysis from the UN Environment Programme estimates that global emissions would need to fall by 7.6% every year this decade, in order to put the planet on the 1.5C trajectory. Markets, society, and nations will all evolve and change regardless of whether we meet net-zero or not. Businesses will need to be prepared for change.
Another reason for optimism is the renewed focus on the green agenda from investors, a notoriously risk-averse sector. More than $50bn of green bonds were issued globally in September 2020, making it a record month despite the economic impact of Covid-19, BloombergNEF has revealed. Around $270bn of green bonds were issued in 2019, making it a record-breaking year. If the trends seen in September persist, 2020 could break records once more.
Analysis by Moody’s, published in August, revealed that sustainable bond issuance was 65% higher between April and June than between January and March, with social bonds and sustainability bonds making up the vast majority of the increase. This investor and stakeholder pressure has seen the likes of Shell and BP, some of the world’s most polluting corporates commit to low-carbon trajectories and funnel finance into green solutions, such as electric vehicle charge points.
The trajectory isn’t linear. It is a meandering sense of momentum that is susceptible to cases of greenwash (such as an avert reliance on offsetting) and it is highly likely that the political willpower to commit to net-zero could become undone in the build-up to next year’s COP26 climate summit if the pandemic continues to spiral out of control.
We are not in perfect times, yet that doesn’t mean we have to wait around for perfect solutions, perfect policies and perfect environments. I recently chaired a roundtable of sustainability professionals discussing approaches to the green recovery. One delegate said something that resonated with the entire group… “Millions of activities caused the climate crisis so millions of activities will be needed to resolve it.”
For me, optimism exists because millions, if not more, are taking action today to make net-zero a reality.