The Paris Climate Agreement of 2015 has been a hallmark attempt at a multi-tier consensus on a global carbon-neutral agenda to secure the planet's climatic future. But despite this, the devastating socio-economic implications of an alarming rise in temperatures due to anthropogenic activities are to be witnessed as early as 2040.
Over the last few decades, emission of carbon dioxide and other greenhouse gases (GHG) from anthropogenic activities has continued to rise at a rate of over 1 percent per annum, pushing our climate towards the impending consequences of global warming. A liberal cut in the global emission footprint, at the rate of 3-6 percent, is required annually to limit this galloping rise in temperature and retain our planet's habitability. However, although the parties to the Paris Climate Agreement pledged to arrest the global temperature rise well below 2°Celsius by the end of the present century through affirmative climate action, progress seems restricted even five years after of its adoption. The sovereigns that have committed to being carbon neutral by 2050 accounts for less than 25 percent of the global emission volume, and most are yet to undertake climate policy reforms bold enough to resonate with the Paris Agreement’s trajectory. So, today, with the clock ticking faster than ever, how can sovereign entities and corporates respond meaningfully to the aggravating climate crisis?
The apparent disconnect was exemplified at COP25, Madrid in 2019, where the countries targeted to revisit their pledges before 2020. However, despite the best intentions, it witnessed a resurfacing of discord amongst the parties of the Paris Climate Deal on several issues: From reciprocity, optimisation of ambitions, review of achievements, carbon reduction credit valuations and global carbon market dynamics, the fate of the Clean Development Mechanism (CDM), social and environmental safeguards for local communities to the loss and damage provisions for nations facing imminent climate threats. So, with the scheduled COP26 postponed till November 2021 and socio-economic structures around the world struggling to recover from the disproportionate impact of the pandemic, how can the governments, especially those across the Global South and corporates contribute to keep the lights on and sustain the pace of decisive climate action towards a net-zero future?
With the effects of global warming becoming more and more apparent every passing day, the imperative for cohesive and swift policy intervention at a global level can hardly be overstated. However, in an era when international climate negotiations are decelerating, individual governments and businesses can resort to unilateral and coordinated initiatives, leading by example. Such activities may include reducing emission profiles through efficiency improvements, practical climatic risk assessment and management measures, prioritising innovation and operating leverages with optimised emission signatures, and adopting environmental sustainability as a fundamental operational discipline. Countering the challenges of global warming is undeniably a collective endeavour. Nevertheless, efforts by industrialised economies and corporations with cross-continental presence can unleash a multiplier effect at a moment when time is definitely of the essence.
With the effects of global warming becoming more and more apparent every passing day, the imperative for cohesive and swift policy intervention at a global level can hardly be overstated. However, in an era when international climate negotiations are decelerating, individual governments and businesses can resort to unilateral and coordinated initiatives, leading by example
As the global energy demand continues to escalate at an exponential rate and economies worldwide move forward with carbon-intensive projects to meet them, national governments need to play a decisive role in reaffirming their net-zero ambitions and associated commitments at home. It will involve not only legislative interventions but also building favourable public opinion and social contexts, triggering industry-specific dialogues and architecting independent regulatory frameworks that can incubate and accelerate such transitions. Here, measures like progressive carbon taxation are a viable pathway for accelerating R&D and new pilots to reduce the time-to-market (TTM) for climate-conducive industrial solutions. Simultaneously, it is also vital to ensure national economic growth that can enable governments to lift millions amongst their body politic out of poverty through enlightened tax breaks and subsidies.
For instance, Morocco has developed the world's largest concentrated solar farm to meet at least half of its national energy demands through renewables, offsetting a substantial volume of carbon emissions. Also, as cities account for more than 70 percent of the global energy-related emissions, the idea of low-carbon transition needs to be emphasised at the subnational, local, and municipal governance level.
For instance, Morocco has developed the world's largest concentrated solar farm to meet at least half of its national energy demands through renewables, offsetting a substantial volume of carbon emissions. Also, as cities account for more than 70 percent of the global energy-related emissions, the idea of low-carbon transition needs to be emphasised at the subnational, local, and municipal governance level.
Businesses are inherently social entities and drive socio-economic progress along their value chains, both locally and globally. Undoubtedly, they play a pivotal role in the net-zero visions of their host nations. However, for such roles to be meaningful and facilitate a transition towards a green economy, the decision-makers need to factor in specific key considerations into their business strategies: Optimised GHG emission intensity of the supply chains, framing business choices with a realistic price on carbon and a conscious pursuit for green business opportunities that can materialise a decarbonised world. With 200 of the world's largest corporations anticipating a financial risk to the tune of US $1 trillion, owing to extreme weather events, the time for complacency and deliberations are over. Companies need to test, rationalise, and deploy policy and technology constructs consistently across their value chains and not only offsetting emission volumes where necessary and sequestering them wherever possible.
Sustainable manufacturing is one such climate-conducive business practice. It involves re-engineering business lines using radical concepts like controlled emission profiles, life cycle assessments, Zero Waste to Landfills (ZWL), and water positivity to reduce net emissions throughout business operations. Further, intelligent logistics programming to minimise vehicular emissions, honouring international treaties, and a resolute investment in alternative energy sources also holds enough carbon mitigation possibilities. Interestingly, recent research shows that investment in renewables across Germany and France has yielded over 178 percent return, compared to -20 percent for fossil fuels.
However, to sustain the gains towards a net-zero future and abate the global warming-induced shifts in climatic patterns in time, it is urgent for public and private entities across the globe to conclusively address inadequacies inherent to the current carbon pricing models. Article 17 of the Kyoto Protocol, 1997 allowed already carbon-neutral or conducive entities with spare emission reduction units to sell them to those looking to limit their emission trajectories within the agreed thresholds, establishing a global carbon market.
But, over the years, the price discovery mechanism for emission trading schemes became highly skewed due to the global carbon market design's political economy. With multiple forces involved in keeping carbon prices across the world well below the thresholds necessary to incentivise deep emission reduction, the arrangement's potential to practically address the net-zero imperatives is gradually being compromised by subtle geopolitical and economic power plays. Here, entities across the sectoral continuum need to step forward and engage multi-dimensionally to steer the complex politics of green transformation and secure social and environmental justice through the accurate valuation of carbon credits. The abandoning of myopic business practices of peaking carbon emissions for securing competitive advantages are also not without tangible benefits. The World Resource Institute estimates that low carbon growth can unlock economic opportunities worth US $26 trillion through 2030.
Global climate is changing faster than we can respond, with dire implications for the existence of organisations and individuals alike. If we consider the immense human cost of the unfttered global warming, tackling the net-zero challenge can no longer be held hostage to the global consensus. The world needs decisive and decentralised action to flatten the emission curve. The moment can be viewed as a unique opportunity for all stakeholders, sovereign, quasi-sovereign and private, to engage, collaborate, and act unwaveringly towards a safer and greener tomorrow.
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Akanksha Sharma is an International Development and Public Policy Specialist. She has been recognised as the 'Most Impactful CSR Leaders Globally' 'Asias Top Sustainability Leaders' ...
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