05/11/2021

(BBC) COP26: UK Firms Forced To Show How They Will Hit Net Zero

BBC News - Robert Plummer | Beth Timmins

Getty Images
Most big UK firms and financial institutions will be forced to show how they intend to hit climate change targets, under proposed Treasury rules.

By 2023, they will have to set out detailed public plans for how they will move to a low-carbon future - in line with the UK's 2050 net-zero target.

An expert panel will set the standards the plans need to meet to ensure they are not just spin.

Any commitments will not be mandatory. Green groups say this is not enough.

Net zero is when a business or a country achieves an overall balance between the amount of carbon it is emitting and the carbon that it's removing from the atmosphere.

Firms and their shareholders will be left to decide how their businesses adapt to this transition, including how they intend to decarbonise.

And although the plans will need to be published, the government said "the aim is to increase transparency and accountability" and the UK was not "making firm-level net-zero commitments mandatory".The market will decide whether firms' plans are credible, the Treasury said.

Speaking at the COP26 climate summit, Chancellor Rishi Sunak claimed the UK was leading the world in becoming the "first-ever net zero aligned global financial centre".

He said the changes would mean: "Better and more consistent climate data; sovereign green bonds; mandatory sustainability disclosures; proper climate risk surveillance; and proper global reporting standards."

In total, 450 firms controlling 40% of global financial assets - equivalent to $130tn (£95tn) - have agreed to commit to limit global warming to 1.5C above pre-industrial levels.

'Not fast enough

'However, campaign group Global Witness said that without regulation the pledges were "doomed to fail".

"Banks and financiers are the lifeblood of the fossil fuel companies and destructive agribusinesses fuelling the climate crisis - so it's right that focus should be on them at COP26.

"However, today's announcement by banks risks amounting to more greenwashing if it's not legally binding," said Veronica Oakeshott, head of forests policy and advocacy at Global Witness.

David Barmes, senior economist at the campaign group Positive Money, said the intention was positive, but that financial firms were still "pouring billions into environmentally harmful projects."

Mark Campanale, founder and executive chair of Carbon Tracker Initiative, praised the ambition of the plans, but said details of how it would work were still unclear.

"None of the financial assets announced are currently aligned with net-zero and no group of companies can say they are meeting the Paris target by continuing to invest in fossil fuels, so that needs to change considerably before London can be lauded as the world's first net-zero financial centre and a model for the world," he said.

Shaun Spiers, executive director of environmental think tank Green Alliance, said that more UK public sector funding was needed.

"Private sector investment is vital, but it will be much easier to achieve on the back of serious investment by the chancellor," he said.

However, a coalition of finance groups led by former Bank of England governor Mark Carney said there was enough finance committed to keep global warming to 1.5C.

The Glasgow Financial Alliance for Net Zero (GFANZ) said more than $130trn (£95trn) of private capital "is now committed to transforming the economy for net zero".

In practice, this means that bank loans which would go to an oil field, or a coal mine, are diverted to renewable energy or to a mortgage product that subsidises highly efficient homes.

Bank bosses will also be expected to have tough conversations with their customers who want to build coal power stations, pulling funding in advanced nations now, and developing countries beyond the next decade.

Transition plans

Under the proposed Treasury rules, financial institutions and companies with shares listed on the London Stock Exchange must come up with net-zero transition plans, which will be published from 2023.

The strategies will need to include targets to reduce greenhouse gas emissions, and steps which firms intend to take to get there.

A taskforce made up of industry leaders, academics, regulators and civil society groups will set a science-based "gold standard" for the plans in order to guard against so-called "greenwashing" - where environmental initiatives are more about marketing than substance.

However, the government said there was "not yet a commonly agreed standard for what a good quality transition plan looks like".

Meanwhile, Mr Sunak also pledged that a target for developed countries to send $100bn (£720m) a year to those that are less developed - to help support their transition to net zero - will be achieved by 2023.

Alison Rose, chief executive of Natwest, told the BBC Radio 4 Today programme that the bank had started measuring the emissions on its balance sheet to help it track progress, saying "transparency was critical".

She said the bank was working with the oil and gas industry "to develop credible transition plans so we can track progress and work with our customers".

But Ms Rose said its main focus was helping small firms where there were "real business opportunities" in "adopting sustainable supply chain [and] sustainable business practices".

Kay Swinburne, vice-chairman of financial services at KPMG UK, said the announcement on UK firms would provide the financial services industry with a "valuable set of unified metrics to measure progress towards decarbonisation".

"It is brave to put a gold standard in place for all companies raising funding," she added.

And Dr Ben Caldecott, director of the UK Centre for Greening Finance and Investment, said the plans would "spur demand for green finance and accelerate decarbonisation, not just in the UK but wherever UK firms do business".

Analysis
Faisal Islam, Economics editor

Follow the money to net zero. That is the plan unveiled today, with two-fifths of the world's financial assets, $130 trillion, under the management of banks, insurers and pension funds that have signed up to 2050 net-zero goals including limiting global warming to 1.5C.

This means that the giant laser beam of global finance will be fired towards technologies that lower and eradicate carbon emissions, and away from "brown holdings" of investments in coal, oil and gas.

The aim of the initiative chaired by former Bank of England Governor Mark Carney is to change the plumbing of the whole financial system forever.

What does this mean in practice?

Essentially the easy cheap bank financing that naturally flows to, say, an oil field, or a coal mine, is diverted to renewable energy or to a mortgage product that subsidises highly efficient homes.

In fact all of this is already happening in niches, with loans raised for environmental investments attracting a flood of money, and so cheaper funding - something referred to as a "greenium".Bank chiefs say they are having tough conversations with their customers who want to build coal power stations, pulling funding in advanced nations now, and developing countries beyond the next decade. So that is the grand hope.

Promisingly, the Chinese, whose public banks have been huge backers of coal around the world, have also said they will step back from such investments.

But the negotiations in Glasgow will fall short of setting a global carbon price - the sort of measure that could really guarantee the path to net zero.

They have also so far not come up with a globally consistent way for bank regulators to force the financial system to increase the risk and the cost of lending to carbon intensive industry.

And then there is the really fundamental question about COP26's climate finance agenda: can such fundamental ecological, economic and social change really be achieved more through financial carrot than by regulatory stick?

This position suits politicians who don't necessarily want to tell their voting public to consume or travel less than they are used to.

By changing the financial system, their hope is that the trajectory of every economic sector, from energy to transport, food to clothing, how we live, work and what we consume will decarbonise of their own accord.

Links
at No comments:

(AU The Conversation) Australia’s Refusal To Sign A Global Methane Pledge Exposes Flaws In The Term ‘Net-Zero’

The Conversation - 

Shutterstock
Author
 is Director, ANU Institute for Climate, Energy and Disaster Solutions, Australian National University
At the United Nations climate summit in Glasgow, more than 90 nations signed a global pledge led by the United States and United Kingdom to cut methane emissions. However, Australia was not among them.

China, Russia, India and Iran also declined to sign the pledge, which aims to slash methane emissions by 30% before 2030.

Methane is emitted in coal and gas production, from livestock and other agricultural activity, and when organic waste breaks down in landfill.

Almost half of Australia’s annual methane emissions come from the agriculture sector. Defending the federal government’s decision, Energy and Emissions Reduction Minister Angus Taylor said Australia had pledged net-zero greenhouse gas emissions by 2050 and would not set specific targets for each sector.

Days out from COP26, National Party leader Barnaby Joyce had claimed signing the pledge would be a disaster for coal mining and agriculture, saying “the only way you can get your 30% by 2030 reduction in methane on 2020 levels would be to grab a rifle and go out and start shooting your cattle”.

Australia’s position on the pledge is inconsistent with methane reductions the Intergovernmental Panel on Climate Change (IPCC) says are required to keep Earth below 1.5℃ warming this century.

The debate also highlights how the shorthand phrase “net-zero emissions” conceals and distorts the real challenges in avoiding dangerous climate change.

It focuses attention on the wrong time frame for action – the next decade is far more important for climate action than 2050. It also addresses the means of action – emissions reduction – rather than the desired goal, which is to avoid dangerous climate change.

And importantly, simply through delaying action, the world could feasibly reduce emissions to net-zero by 2050, but still fail to meet the goals of the Paris Agreement – keeping average global temperature rise below either 1.5℃ or 2℃ this century.

The Morrison government has refused to sign a global methane pledge. Ian Forsyth/AP

Net-zero is both too much, and not enough

The IPCC report released in August painted a clear picture of how different trajectories for various greenhouse gases translate to global temperature increases.

Carbon dioxide (CO₂) emissions last a very long time in the atmosphere so they accumulate. Consequently, net CO₂ emissions need to decline sharply as soon as possible if we’re to limit temperatures to 1.5℃ or 2℃ above pre-industrial levels.

However, CO₂ emissions not only need to reach net-zero – the IPCC says CO₂ emissions need to go “net-negative”. This will require a massive scaling up of methods and technologies to remove existing CO₂ in the atmosphere.

In other words, when it comes to CO₂, net-zero is not enough. It is a way point, not the end point.

So how do we remove CO₂ from the atmosphere? Some methods, such as mass tree planting, are already widely implemented. Some are difficult to implement at scale, such as substantial increases in soil carbon.

Others are in the exploratory stages including incorporating captured CO₂ into building products and high-value materials or in the ocean.

Each option has advantages, disadvantages and limits. The “net-zero by 2050” terminology obscures this complexity. It also conceals the need for crucial discussions about feasibility, governance and support for research and development that’s needed now.

Meanwhile, the situation is quite different for shorter-lived gases such as methane and nitrous oxide. In those cases, going all the way to net-zero is not needed to meet the Paris goals.

According to the IPCC report, an illustrative scenario consistent with 1.5℃ warming would involve methane emission reductions of about 30% by 2030, 50% by 2050 and just over 60% by 2100.

This is consistent with the global methane pledge signed at COP26 overnight. For nitrous oxide, the illustrative reductions would be about 30% by 2050.

So, for methane and nitrous oxide, net-zero is too much.
Targets based on science

It should be noted, to keep temperature rise to 1.5℃, there are many possible combinations of emission-reduction trajectories for various greenhouse gases. The extent to which CO₂, methane or nitrous oxide is reduced is interchangeable and the final mix will be a function of political decisions.

A clear and integrated assessment of the economic, environmental and social consequences of different emission-reduction pathways is needed to inform those decisions. Without that, inefficient and inequitable economic responses may result.

For example, methane (from livestock) and nitrous oxide (from fertiliser use) make up a high proportion of agriculture emissions. But options for completely stopping these emissions are limited.

Farmers could offset their emissions by planting trees or rehabilitating vegetation on their properties to increase carbon stores. But this would prevent them from selling those emissions reductions on carbon markets, thus removing a potential source of farm income.

So an economy-wide target of net-zero for all key greenhouse gases might mean agriculture must make far more effort in emissions reduction, at much greater cost, than other sectors which largely emit CO₂ and where decarbonisation options are more readily available.

Methane represents a large part of agriculture emissions. Shutterstock

New Zealand has recognised this, and treats agricultural emissions separately.

Carving agriculture out of national emissions-reduction goals would place a greater requirement to act onto other sectors. For example, emission reductions in the transport sector may have to be greater than otherwise, to compensate for the lack of progress in agriculture.

But is isolating agriculture from emission reductions necessary? A recent study assessed new emission reduction options for livestock, including several approaches that together may reduce emissions at the rate required by the methane pledge. They involve more efficient production, technological advances, changes in demand for livestock-related products and land-based carbon storage.

These are approaches already being adopted by industry groups and farmers.

Towards ‘Paris-aligned’

Targets for methane and nitrous oxide reductions should be set using the IPCC science – and don’t have to be set at net-zero. That would leave sectors emitting these gases with a feasible (but still challenging) pathway to reducing emissions in line with the Paris goals.

And where appropriate, we should start describing effective climate action as being “Paris-aligned”. Clearly, over-use of the term “net-zero emissions” misdirects attention from where it’s needed.

Links
at No comments:

(AU ABC) Scott Morrison Plays Down Australia's Overall Emissions Compared To China's, But That's Not The Whole Story

ABC News - Melissa Clarke

Scott Morrison often cites China's emissions as a rationale for not introducing a more ambitious emissions-reduction plan. (ABC News, Reuters)

China's President Xi Jinping didn't make it to the Glasgow talks, instead addressing the global climate conference from home.

The absence of the leader of world's biggest emitter was noted by US President Joe Biden, who cast doubt over China's commitment to emissions reduction.

Prime Minister Scott Morrison regularly highlights the sheer volume of China's emissions and its central role to tackling the global issue of climate change.

He cites it as evidence of Australia's relatively small contribution to the problem of global warming, providing himself with a rationale for not introducing more ambitious emissions reduction plans.

But just how do the emissions of China and Australia stack up? And how does it affect the global climate talks taking place in Glasgow?

What are China's emissions and how do they compare to Australia's?

In 2020, China emitted 13.8 gigatonnes of carbon dioxide and equivalent greenhouse gases. That's 13,800,000,000 tonnes.

By comparison, Australia emitted 512 megatonnes, which is 512,000,000 tonnes.

If all of the zeros are making your eyes water, we can put it another way that has a few less: China emits about 27 times more greenhouse gases than Australia.

Climate Watch — a project by the World Resources Institute and used by the World Bank — keeps a database on national emissions that is based on a wide range of sources.

Its most comprehensive comparison is based on 2018 data. It shows China as the biggest emitting nation, responsible for 23.9 per cent of global greenhouse gas emissions.

Australia ranks as the 16th biggest emitter, responsible for 1.3 per cent.

Total annual emissions per country between 1990 and 2018. (Climate Watch)
China emits far more than Australia but, per person, Australia is much worse

The sheer volume of China's emissions is in large part due to its population size.

Using the same 2018 figures, emissions per capita — that is, emissions per person — in China is 8.40 tonnes.

In Australia it is 24.79 tonnes per person, one of the top 10 emitters in the world, behind oil-dependent countries such as Qatar, Bahrain and Kuwait.

China's per person emissions are closest to those of Slovenia and Zimbabwe.

By way of comparison, the United States emits 17.74 tonnes per capita.

Emissions per country on a per capita basis between 1990 and 2018. (Climate Watch)

Both Australia and China have committed to reaching net zero emissions, but what about between now and then?

Where Australia has committed to reaching net zero emissions by 2050, China is aiming for 2060.

Australia has already begun reducing emissions, while China has committed to reaching its emissions peak before 2030.

At Glasgow, both nations have updated their nationally determined contributions (NDCs) — the process by which countries pledge to cut emissions — in line with the goal of limiting global warming to below 2.0 degrees Celsius and ideally to 1.5C.

As well as the "net zero by 2050" target, Australia has committed to a range of technological goals aimed at lowering the cost of some abatement methods, such as carbon capture and storage, and low-emissions production, such as green steel and hydrogen.

China's updated NDC includes beginning a gradual phase-out of coal, starting in 2025, although it is still commissioning new, coal-fired power plants domestically.

It also pledges to increase the use of renewable energy to around 25 per cent and to install 1.2 billion kilowatts of solar and wind power by 2030.

The Climate Action Tracker — an independent analysis that collates government climate action around the world — has rated the actions of both China and Australia as "highly insufficient".

Scott Morrison's full speech to the UN Climate Summit in Glasgow.
Biggest emitter today vs biggest emitter over time?

While China is now the biggest annual emitter, when you tally up the cumulative emissions of each nation over more than a century, it is not the biggest culprit.

An analysis by a UK-based organisation, Carbon Brief, looked at carbon dioxide (CO2) emitted since the 1850s, given it is a particularly stable greenhouse gas.

It found that China has emitted 284 gigatonnes of CO2, while the US has released 509 gigatonnes over the same period, close to twice as much.

Australia's contribution since 1850 amounts to 35 gigatonnes.

Countries with largest cumulative emissions 1850 – 2021. (ClimateBrief.org)

The historical picture is relevant because the build-up of greenhouse gases over time directly correlates to global warming.

International talks to limit climate change to 1.5C or 2.0C of warming are dealing with emissions from last century as much as the present one.

Why does it matter what Australia does when it's responsible for 1.3 per cent of global emissions?

At the heart of debate over climate action is the divide between developed and developing countries.

The United States, United Kingdom, the European Union and Australia are among the highly industrialised countries that have been emitting greenhouse gases for more than a century.

Despite its extraordinary economic growth in recent decades, China describes itself as a developing country in these debates, given its widespread industrialisation — and significant emissions — started much later than other large economies.

In Glasgow, special climate envoy Xie Zhenhua said China's large emissions were due to its "special development stage" and said his country would speed up emissions cuts later.

Developing countries say they should be given more time to cut their emissions, given they have not had the same amount of time to enjoy the benefits of industrialisation.

It is particularly pertinent in countries such as India, where Prime Minister Narendra Modi has been pushing to bring electricity to households that have never had a power connection before.

The Paris Agreement seeks to address the inequity by providing finance to developing countries to assist with introducing renewable energy and with adapting to climate change.

However, not all the promised funding has materialised, adding to the sense of injustice felt by developing countries.

The developing countries are among the largest emitters but if smaller, highly-industrialised countries like Australia do not reduce their emissions, despite all their historical advantages, what compulsion is there upon other nations to act?

In a negotiation, it is not just about the numbers.

Links
at No comments: