Why North America And Europe Need To Hit Net Zero Well Before 2050

Twelve weeks on from COP26 and there has been no significant positive policy development. The UK minister in charge of the event has warned that the progress made in Glasgow is in danger of withering on the vine if action is not forthcoming. Between the pandemic, persistently high inflation – including record high energy prices – and geo-political tensions, there is plenty to keep governments occupied. Whilst these issues demand our leaders’ attention, we are in danger of drifting listlessly towards COP27.

The locations of the two climate conferences serve as a good demonstration of how there is no one size fits all panacea. What is possible for a high income country like the UK might not be possible for Egypt, at least not in the same timescale. According to the IPCC, humankind needs to reach net zero greenhouse gas emissions by 2050 if we are to limit global warming to 1.5 degrees. I previously wrote about the dangers of the net zero mindset and that warning is especially important now. Although the global target might be net zero, it is unrealistic for all countries and all industries to be carbon neutral by the middle of the century. The energy transition research team at DNV has built on this idea and our Pathway to Net Zero Emissions report shows that a feasible path to net zero requires some countries to get there sooner than others.

It is important to distinguish between where we are heading and where we need to go. Our Energy Transition Outlook is our independent view of where we are heading and takes into consideration economic and technological developments and most likely policy developments. Using this approach, we forecast that we will fall well short of the means to reach the Paris Agreement ambitions. We forecast the planet is on track to warm by 2.3 degrees Celsius by the end of the century. The Pathway to Net Zero Emissions, on the other hand, presents a feasible way to close the gap and reach 1.5 degrees.

The ability to reach net zero varies from country to country. At COP26, India outlined its plan to be carbon neutral by 2070 and the UK reaffirmed its 2050 goal. India and the UK have very different economic, demographic and energy infrastructure realities and it is therefore reasonable to expect one country to reach net zero sooner than the other. But these commitments expose the dangers of the net zero mindset. If high income countries commit to net zero by 2050, the global sum will not add up to zero.

In our Pathway, Europe (which encompasses the UK) and North America must hit net zero by 2042 and then become carbon negative (capturing more carbon than they release) thereafter. The Indian Subcontinent (which includes India and some of its neighboring countries) will be the largest emitter of CO2 by 2050 as its reliance on fossil fuels is likely to persist. That said, India and its neighbors must also decarbonize much more aggressively than currently planned if our Pathway is to be realized.

Reaching net zero emissions by 2050 does not require the complete phasing out of fossil fuels. It is unrealistic for iron and steel production, aviation, maritime and other hard-to-abate industries to complete the switch to non-fossil energy in this timeframe. Currently the energy system is split 80:20 in favor of fossil fuels, but the cheapening of renewable power is causing a revolution in the energy mix and we forecast that fossil and non-fossil sources will most likely share the mix by midcentury. To reach net zero, though, requires much more aggressive decarbonization and that 80:20 ratio is flipped into the favor of renewable energy in our Pathway report.

Carbon capture and Storage (CCS) is an important feature of our feasible pathway to net zero. It is required, along with direct air capture and nature based solutions, to negate the remaining emissions from fossil-based energy production. Critics of CCS say it unnecessarily extends the lifetime and influence of fossil fuels, but we argue it has an essential role to play in the transition to net zero. Hydrogen and hydrogen derivatives offer a green alternative to many of the hard-to-abate sectors and whilst producing (green) hydrogen from renewables is likely to become the dominate method, making (blue) hydrogen from natural gas while capturing and storing and carbon dioxide will also be important.

We have presented a feasible path to reach net zero by 2050. We now need the policy. The Biden administration’s Build Back Better program could have provided much needed momentum after COP26, but instead it is becoming another example of policy inertia. As households across the world open their energy bills with trepidation, the need to scale hydrogen, CCS or even renewables probably feels like a long term distraction to many. However, just as mitigating the impact of inflation requires immediate policy action, so does preventing catastrophic global warming. Even if the pace of decarbonization is likely to vary across the globe, it still requires bold policy decisions from all leaders today.