02 Nov, 2021
Net-zero…for countries
2 mins read | CEF Explains
(Part 1 of 2) Pledges to reach net-zero emissions have become a key pillar of country commitments to combat climate change.

At the 2021 United Nations Climate Change Conference (COP26), Prime Minister Modi declared that India will reach net-zero emissions by 2070. As of November 2021, net-zero pledges cover over 80 per cent of global emissions.1 Put simply, ‘net-zero’ means that an entity has no net greenhouse gas (GHG) emissions annually, as shown in the equation below.

Net GHG emissions = GHG emitted into the atmosphere – GHG removed from the atmosphere = 0

Therefore, to achieve net-zero, countries must significantly cut their GHG emissions from present levels and remove any remaining emissions from the atmosphere. This two-part series explains what net-zero targets mean for countries and corporate entities and highlights some nuances in accounting frameworks. This piece focuses on net-zero targets for countries.

Why net-zero? And why 2050?

The concept of ‘net-zero’ became widespread after the Intergovernmental Panel on Climate Change (IPCC) released its 2018 report on restricting global warming to 1.5oC. The report states that the world must slash carbon dioxide (CO2) emissions by 45 per cent by 20302 and achieve net-zero CO2 emissions by 2050 to restrict global warming to 1.5oC.3 Levels of other GHG emissions, such as methane, also need to be drastically reduced from current levels. Accordingly, 67 countries have announced net-zero targets, and 41 have set 2050 as their target year.4

How do countries emit greenhouse gases?

Countries report their emission levels as per the IPCC guidelines. Figure 1 shows the contribution of various sectors to total global emissions in 2018. The energy sector dominates emissions and is followed by agriculture, which is a major emitter of methane. Industrial emissions occur through processes such as steelmaking and cement manufacturing, while waste-related emissions predominantly originate from landfills. Land-use change and forestry emissions occur through deforestation and land degradation.

Figure 1: Energy sector emissions made up 76% of global emissions in 2018

Source: Johannes Friedrich et al, “This Interactive Chart Shows Changes in the World's Top 10 Emitters,” World Resources Institute, December 10, 2020, https://www.wri.org/insights/interactive-chart-shows-changes-worlds-top-10-emitters.

How do countries remove greenhouse gas emissions?

Countries remove emissions through absorption of CO2 by carbon sinks, which can be natural (e.g., forests, cropland, and oceans) or synthetic (carbon capture technologies). Synthetic sinks make up a negligible share of global carbon removals and are not yet commercially viable.5 The emissions removal capability of each country’s natural carbon sinks depends on their green cover and deforestation practices. In India’s case, CO2 absorption by forests and cropland reduced net emissions by 11 per cent in 2016.6 However, while sinks play an important role, their impact can change over time as deforestation and forest fires often reverse the gains of CO2 absorption.

Relevance and impact

As net-zero timelines span multiple decades, reinforcing them through national laws builds accountability for the future. As of 2021, only 15 countries have enshrined net-zero targets in national laws.7 The remaining 52 countries with net-zero pledges have only issued declarations or policy documents with their targets.

In addition to the 67 countries mentioned above, others are at varying stages of committing to net-zero and are deciding on their timelines. Announcing a target is the first step; detailed decarbonisation strategies for each sector must back up net-zero pledges. Further, citizens need to understand the policy framework required to hold governments and corporations accountable to their net-zero targets.

To understand the sectoral impacts of India’s net-zero transition, access our recent study, Implications of a Net-Zero Target for India’s Sectoral Energy Transitions and Climate Policy. Try out our interactive tool to explore different net-zero pathways for India. 

In the next CEF Explains, we discuss net-zero implications for corporates.

Read Part 2: CEF Explains net-zero…for corporates

References

  • [1] Ciara Nugent, “India Sets a Surprise Net Zero Goal for 2070,” Time, November 1, 2021, https://time.com/6112672/india-net-zero-2070-cop26/.
  • [2] The 45 per cent reduction is measured against 2010 CO2 levels.
  • [3] IPCC, “Special Report: Global Warming of 1.5oC” (Geneva: Intergovernmental Panel on Climate Change, 2018).
  • [4] “Net Zero Tracker,” accessed November 1, 2021, https://zerotracker.net/
  • [5] Peter Wilson, “Is Carbon Capture Here?,” New York Times, October 31, 2021, https://www.nytimes.com/2021/10/31/climate/is-carbon-capture-here.html
  • [6] MoEFCC, “India: Third Biennial Update Report to The United Nations Framework Convention on Climate Change” (New Delhi: Ministry of Environment, Forests and Climate Change, Government of India, 2021).
  • [7] “Net Zero Tracker,” accessed November 1, 2021, https://zerotracker.net/.

Disclaimer

CEF Analysis” is a product of the CEEW Centre for Energy Finance, explaining real-time market developments based on publicly available data and engagements with market participants. By their very nature, these pieces are not peer-reviewed. CEEW-CEF and CEEW assume no legal responsibility or financial liability for the omissions, errors, and inaccuracies in the analysis.
Filled under: Clean Energy Finance
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