"CMIA helped to explain the potential for project-based mechanisms across a variety of constituencies and is a key voice driving the conversation on results-based finance and sector approaches for scaling-up emission reduction investments. We urgently need input from organisations like CMIA to operationalise Art 6 of the Paris Agreement."

Mr. Franz-Josef Schafhausen, former Director General Climate Change, European and International Affairs, Federal German Ministry of the Environment, Nature Conservation, Building and Nuclear Safety

Pathways to Climate Neutrality

12th October 2020 by CMIA

“Without the integration of negative emissions into climate protection strategies, the Paris climate targets are not achievable.”

Executive Summary

In policy debate, the term “climate neutrality” is used at various levels. Increasing numbers of companies, countries, and even the European Union are professing this goal. The meaning of the term is often unclear, and the measures to achieve the goal are manifold. Climate neutrality is already enshrined in the Paris Agreement as a balance between anthropogenic emissions by sources on the one hand and removals by sinks of greenhouse gases on the other. The target date has been set as the middle of this century. The policy and technological measures for climate protection vary in terms of maturity and cost, and each country and company faces their own unique conditions, as well as differing levels of ambition with respect to climate protection measures. Despite all these differences, it is possible to draw conclusions from comparison, and analyse what actions are still needed in order to achieve the Paris goal of climate neutrality.

  1. Emissions are expected to increase up to 2030. This is mainly due to the economic development of various emerging markets, which is expected to continue over the coming years. One indicator of this is the CO2 emissions per capita. A comparison of India with Japan clearly illustrates this; Japan, an industrialised country, emits 10.17 t CO2 per capita, while India, a country where over 230 million people have no access to electricity, emits just 2.23 t CO2 per capita.
  2. The strategies and objectives for climate protection are different in every country. Often, climate protection is not the priority, but rather part of a whole range of policy objectives that a government would like to achieve. These may even conflict with each other. For example, access to energy is a high priority in many countries in order to achieve other development goals, such as education, nutrition, health, and economic growth.
  3. Climate protection is being implemented in part at the local and regional levels. Although the United States is withdrawing from the Paris Agreement, U.S. states with ambitious climate targets and standards are joining an international Climate Ambition Alliance. In addition, important climate protection standards in one state are copied in other states, and thus have a cross-border impact. In China, experience with emissions trading systems gained at the regional level is now being shared at the national level. In individual cases, greater climate protection is being implemented at the level of China’s major cities in order to provide scope for action in other parts of the country.
  4. In addition to policy, market developments have an important influence on climate protection. Due to the competitive advantages of natural gas over coal, the United States has been able to reduce its CO2 emissions in the electricity sector by 25 percent in recent years; there, the share of natural gas in electricity generation has doubled since 2000, while the share of coal has fallen from 50 percent to 30 percent. Policymakers need to anticipate market developments and combine an openness to various technologies with climate protection.
  5. Even the ambitious national climate plans currently only include measures to reduce greenhouse gas emissions, such as the expansion of renewable energies, electrification, energy efficiency, changes in consumption behaviour, or the use of low-emission fuels/hydrogen. In a few countries, the use of carbon capture and utilisation/storage plays a role, albeit on a smaller scale, and the recycling of CO2 is being further developed in some projects. However, few countries have integrated the import of climate protection services from abroad or negative emissions technologies (NET) into their strategies.
  6. Companies are increasingly professing climate neutrality. The costs for climate protection measures increase proportionately with the level of ambition. Measures are introduced for competitive advantages, but also to comply in full or in part with legal frameworks and investor demands.
  7. Carbon credits will play a major role in companies achieving climate neutrality, so measures will often have no direct systemic influence on the achievement of a country’s climate protection targets. In a cap-and-trade system, for example, the total emissions are capped, regardless of emissions or savings. The feed-in priority of renewable energies means that it is not market demand but technical limitations or existing capacities that limit the amount of renewable electricity in the system.
  8. In addition to greenhouse gas emissions at the country level, emissions remain at the company level that can only be reduced with great difficulty or at high cost. This, consequently, creates the need for “negative emissions” to remove greenhouse gases from the atmosphere. The later the target of a complete reduction of all anthropological greenhouse gas emissions is achieved, the greater the need for negative emissions technologies and greenhouse gas sinks will be. According to the Intergovernmental Panel on 5 Pathways to Climate Neutrality Climate Change (IPCC), in order to achieve the 1.5 °C target, all GHG emissions have to be net zero by 2067 at the latest.
  9. Negative emissions technologies are still in the early stages of development and application. The following negative emissions technologies or greenhouse gas sinks appear to be the most promising today: afforestation, biomass-energy with carbon capture and storage (BECCS), biochar for use in the soil, direct air carbon dioxide capture and storage (DACCS), and soil carbon sequestration, including through biomass growth. Other technologies under discussion include enhanced weathering, increasing the alkalinity of oceans, and ocean fertilisation. Negative emissions technologies and CO 2 sinks diverge in terms of their states of development, the cost per ton of CO 2 absorbed, their physical limitations, and their impact on the environment. Afforestation is currently the cheapest option, with a cost ranging from USD 5/t CO 2 to USD 50/t CO 2, while DACCS remains very expensive at this point in time, with a cost ranging from USD 100/t CO 2 to USD 300/t CO 2.

The analysis clearly shows that without the integration of negative emissions into climate protection strategies, the Paris climate targets are not achievable. This makes it all the more urgent for governments and society to discuss and promote the further development of these technologies. International exchange, also with regard to the trading of climate protection services, will be essential here, because each country has different geographical and structural conditions that determine the extent to which it can implement the climate protection measures that are necessary to achieve the net zero target. Transparency is central in the complex process of emissions accounting, so climate protection measures can be assessed and potentially prioritised, and double counting avoided. Early recognition of the relevance and promotion of negative emissions technologies by decision-makers from politics and business can lead to competitive advantages if climate protection ambitions are further bolstered at the international level.

Read the full report here: http://bit.ly/WEC_neut