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Ideas For Net-Zero From COP26 And Bill Gates

While net zero is a critical longer-term goal, steep emission cuts especially by the larger greenhouse gas emitters are imperative in the next 5 to 10 years in order to keep global warming to no more than 1.5 °C and safeguard a liveable climate

Photo Credit : PTI

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The UN Climate Change Conference in Glasgow (COP26) brought together over 200 countries leading to the signing of the ‘The Glasgow Climate Pact’. The pact will aid in the implementation of the earlier Paris Agreement through actions that can get the world on a more sustainable, low-carbon pathway moving forward. The countries reiterated their commitment to the Paris Agreement goal of limiting the increase in the global average temperature to below 1.5°C, as well as aim to reduce carbon emissions by 45% by 2030 and becoming net-zero by 2050. 


Source: Mckinsey, Jan 2021

                                                                                          Source: Mckinsey, Jan 2021


While net zero is a critical longer-term goal, steep emission cuts especially by the larger greenhouse gas emitters are imperative in the next 5 to 10 years in order to keep global warming to no more than 1.5 °C and safeguard a liveable climate. Interestingly, the 10 largest global greenhouse gas emitters contribute over 68% of global emissions (Source: Un.org), which include countries like China, US, EU region and India. 

Within Asia, top carbon dioxide emitters will need to cut their emissions by almost half from 2020 levels to meet the baseline target under the Paris Agreement. By 2050, the region's top emitters will have to cut their fossil fuel demand by 35% and increase renewables demand by over 350%. 



                                                                                          Source: Ecosystem-marketplace.com                    

The COP26 participants have finally reached an agreement for the new carbon offset market, potentially unlocking trillions of dollars into credit-generating schemes, including tree-planting, CCS projects, and expanding renewables infrastructure. Domestic emission trading schemes are expected to be implemented in Asia Pacific, and cross-border carbon trading will also become more vibrant. Specifically, the Voluntary carbon markets (‘VCM’) allow carbon emitters to offset their unavoidable emissions by purchasing carbon credits emitted by projects targeted at removing or reducing GHG from the atmosphere.  Each credit – which corresponds to one metric ton of reduced, avoided or removed CO2 or equivalent GHG – can be used by a company or an individual to compensate for the emission of one ton of CO2 or equivalent gases. When a credit is used for this purpose, it becomes an offset. It is moved to a register for retired credits, or retirements, and it is no longer tradable.   

Data from the State of the Voluntary Carbon Markets 2021 by Ecosystem-markets shows that as of 31 August 2021, voluntary carbon markets had already posted $748Mn USD in sales for 239.3 mn credits, each representing one ton of carbon dioxide equivalent, reflecting a 58% year-to-date jump in value (up from $472.9M), and growth in credit volume of 27% over 2020 performance (up from 188.2 million credits transacted).

Surprisingly, the traded volumes of credits from projects located in Asia have doubled between 2019 and 2021 year to date, while prices have increased 85% over the same period. This price increase is due to two main factors: rising prices for Energy Efficiency/Fuel Switching and Renewable Energy credits. 


                                                                                                             Source: Ecosystemmarketplace.com 

It’s imperative that the market for carbon credits purchased voluntarily (rather than for compliance purposes) be developed further. VCM markets are important for another reason too; for eg:   Voluntary carbon credits direct private financing to climate-action projects that would not otherwise get off the ground. A refreshed pledge for developed countries to contribute at least $100 billion per year in transition financing to developing nations. These projects can have additional benefits such as biodiversity protection, pollution prevention, public-health improvements, and job creation. Carbon credits also support investment into the innovation required to lower the cost of emerging climate technologies.  In our view, efficient Carbon trading markets can be a key enabler towards the net-zero world. 

Bill Gate’s book - How to Avoid a Climate Disaster details the transformation necessary to reverse the effects of decades of catastrophic practices immediately. The book is full of practical ideas for people of all strata to halt climate change. Gates emphasizes how the green technologies are at a competitive disadvantage with the approaches they need to replace, which includes financing /subsidizing these technologies. The book also talks about low income nations being hit the hardest by natural calamities but because they are not responsible for causing a majority of the world’s greenhouse gas emissions, they cannot be expected to adopt the same policies as wealthier nations. At this point in the book, Gates introduces the concept of Green Premiums — the additional cost of choosing a clean technology over one that emits more greenhouse gases — affordable for low-income countries to implement clean technology. Gates believes the onus also lies not only on private companies but also on governments to take charge of changing and implementing policies strictly to encourage innovation of clean technology. For example, innovation in EVs, raising the cost of fossil fuels will encourage the use of clean technologies and support climate change. Essentially we are going to have to change the way we do almost everything. All of these are also opportunities, in his view, for businesses to enable this transformation. With innovation and investment in clean technology, the book is optimistic that we can do it.


Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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COP26 bill gates net zero targets carbon emissions 2070

Rahul Veera .

Research Analyst, Abakkus Investment Advisors

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