Why legislate a Net Zero target? | The Financial Express

Why legislate a Net Zero target?

There is a lack of credibility in the way net-zero targets are being announced, be it by countries or corporate entities, as action on the ground doesn’t match the goals

parliament, Net Zero
The Global Carbon Project has projected that carbon emissions will touch 37.5 GT in 2022.

A private member’s Bill, called the Net Zero Emissions Bill 2022, was introduced in the Rajya Sabha on December 9, 2022. What the fate of this Bill will be, only time will tell. But it would be interesting to note that there are some countries who have already legislated on their desire to turn net-zero emitters in the years to come. Of course, in certain cases, net-zero means only carbon emissions, leaving out other greenhouse gases (GHGs). Further, in some cases, it is not clarified as to what all is included in net-zero. While Germany and Sweden have legislated turning net-zero by 2045, Denmark, Spain, Hungary, Luxembourg, and Ireland, have legislated turning net-zero by 2050.

Other countries that have passed such legislation include Japan, South Korea, Canada and New Zealand, whose target date is again 2050. The Russian Federation has legislated a ‘net-zero by 2060’ target. While legislation may show how serious a country is about decarbonisation, one wonders whether it really makes any sense? It would not be possible to impose penalties since the responsibility is diffused. The only exception could be in case one is a part and parcel of some emissions reduction plan, like the European Union’s Emissions Trading System (ETS) or even the Perform Achieve and Trade (PAT) scheme in India. However in such schemes, the penalties are inbuilt and, in any case, only take into account primarily the industrial sector, including power generation.

Legislation on net-zero, therefore, has to be taken with a pinch of salt and, for all practical purposes, it is perhaps nothing more than optics.While there are only a handful of countries who have legislated on decarbonisation, as many as 133 countries have declared their intention to turn net-zero by way of a policy document or an announcement, etc. Interestingly, it is not limited to countries only. The desire to turn net-zero has permeated to the sub-national level (states/cities) and also the corporate world. The list includes 242 cities, 116 states/regions and also about 800 publicly listed companies from the Forbes Global 2000.

It is estimated that there would be about 10,000 real economy actors who have announced their desire to turn net-zero.According to Net Zero Tracker (a project by an international consortium), the desire to turn net-zero has accentuated in the last 3-4 years. Net-zero targets in domestic legislation or policy documents has increased from 10% of the total GHG coverage in December 2020 to about 65% in 2022. The number of countries who have legislated has gone up from seven to 16 (as of June 2022). National targets that just covered 16% of global gross domestic product (GDP) in the mid-2010s have gone up six-fold to encompass 91% of the global economy. However, all these measures bring little cheer since action on the ground is missing while lofty targets are being set.

Turning net-zero by 2050 means a time gap of about 30 years. What is required along with these long-term targets is targets for 2030, or even earlier, as well. Coming to the corporate sector, from among these 800 publicly listed companies from the Forbes Global 2000 (including many dealing with fossil fuels), only about half have given interim emissions targets. A large proportion of the companies have not even included net-zero in the company documents. Worse, some companies have been accused of ‘greenwashing’, which means that the entity concerned is falsely giving an impression that it is working towards decarbonisation.

The sum and substance is that there is a lack of credibility in the way one is announcing net-zero targets, be it a country or a corporate entity.It is estimated that in order to limit the temperature rise to 1.5 degrees by 2100 vis-à-vis pre-industrial levels, we need to lessen the carbon emissions by half by 2030. As of now, there is little chance of achieving this. In fact, we are going in the opposite direction. Going by the International Energy Agency (IEA), carbon dioxide emissions in 2021 was 36.3 gigatonnes (GT) which was 6% more than in 2020 (34.2 GT). Of course, carbon emissions took a dip in 2020 due to the pandemic, but what is significant is that the emissions in 2021 have exceeded the pre-Covid level (36.1 GT in 2019).

The Global Carbon Project has projected that carbon emissions will touch 37.5 GT in 2022. What we really need today is show of commitment towards decarbonisation. The world community is not really convinced that all stakeholders actually mean what they are saying and will move away from sheer rhetoric. Enabling laws on net-zero can be taken seriously if they are backed by more stringent nationally determined contributions (NDCs), which clearly link these to turning net-zero by a defined date. As of now, the NDCs of the world, even if implemented in full, will not limit temperature rise to 1.5-degree C but may ensure a rise by about 2.5-degree C. Further, as already mentioned, along with strengthening of NDCs what is more essential is stating nearer term targets as well, for 2030 or nearer maybe. People taking policy decisions today have to be held accountable instead of speaking of 2050/2060/2070, by which time a set of new policymakers would be in position.

The author is a senior visiting fellow, ICRIER, and former member, CEA

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First published on: 27-01-2023 at 03:30 IST