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.
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
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.
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.
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.