A Greenfleet reforestation project in Central Victoria

Net zero carbon pledges are now plentiful but they must be meaningful to avert the most dangerous impacts of climate change.

Despite the Australian federal government’s inadequate commitments to combatting climate change and its exaggeration of the emissions reductions expected from its climate policy, other countries and business leader are ramping up their net-zero commitments.

News of new net zero and carbon neutral commitments hit our devices almost daily. But are they enough to deliver the objective global net zero emissions and keep global warming to ideally well below 2°C?

If we are serious about achieving the 1.5°C goal, decarbonisation is not only critical, but it must also be accelerated. And for that to happen, net zero carbon (and by extension carbon neutral) pledges must be meaningful to avert the most dangerous impacts of climate change.

What is net zero?

The IPCC Special Report on the impacts of global warming of 1.5°C defines net zero as the global balancing of anthropogenic greenhouse gas emissions (GHG) to the atmosphere by anthropogenic removals over a specified period. In other words, the sum of greenhouse gases emitted from and removed by human activities is zero.

Since its release, the IPCC Special Report is frequently quoted to justify investments in offset units from forestry and land management projects that remove atmospheric CO2, and renewable energy purchases from corporate power purchasing agreements and promote these as aligned with the latest science.

Are we focusing on the wrong measures for now?

This idea of “renewable energy purchases and removal units are best” is reinforced by the SBTi’s approach to decarbonisation. While definitely not wrong, the focus on renewables and removals alone is problematic for two reasons:

  • The deployment of additional renewable energy capacity is crucial in bringing down the grid-intensity, and organisations’ efforts in supporting the deployment of renewable energy projects, which go some way towards reaching the Paris Agreement targets, are to be commended. However, simplifying the transition process to low-carbon energy sources by using claims of being “100 per cent renewable” or reducing PPAs to simple addition and subtraction in GHG inventories can be misleading. Existing grid limitations, the physical realities of how electricity works, and the continued presence of fossil fuel generators can make market-based emission reduction claims insincere. There is also the risk that the focus on electricity occurs to the detriment of other possible emission reduction strategies, given that currently there are no technologies to actively remove greenhouse gases other than CO2 from the atmosphere. Can we afford to wait until the grid is indeed 100 per cent renewable before we tackle operational emissions?
  • Removal units are often used to underpin carbon neutral claims or facilitate increased economic activity (think International aviation’s CORSIA) instead of increasing efforts to restore lost carbon stocks. Too often, users of removal offset confuse negative emissions with emission reductions, and tend to overlook the difference between carbon stocks and sinks. Forest protection and restoration do not offset fossil fuel emissions, rather they’re better understood as mechanisms to replenish those carbon stocks that were depleted by anthropogenic land use change. The stock of emissions in the atmosphere is growing because anthropogenic emissions from burning fossil fuel and deforestation and degradation are exceeding the storage capacity of the natural sinks. The value of forests lies not in their ability to absorb CO2, but in the longevity of their accumulated carbon stocks, which in turn is affected by natural disturbances, including those brought about by climate change itself. Lastly, carbon stored in forests must remain permanently stored for more than 10,000 years, not just 100 years. The 100-year timeframe comes from the calculation of Global Warming Potentials; it does not refer to the atmospheric lifetime of CO2.

A long-term portfolio approach – reduce, offset and contribute

It doesn’t take that much to make a net zero pledge. But a net zero pledge is only as good as the underlying long term intent to address catastrophic climate change and commit either to achieving and maintaining net zero or going “net negative”.

To avoid meaningless net zero rhetoric, an effective portfolio approach is required to ensure investment in negative emissions does not undermine actual emission reductions. A solid portfolio approach is required, one that, of course, does consider removals, but on top, not in lieu of, operational emission reductions and contributing to a lower energy intensity.

  • Operational emission reductions – increasing investments in negative emissions to enable continued (increasing) emissions output is less desirable than to minimise operational emissions through equipment upgrades, better operational processes and using fewer resources and energy, and alternative, innovative products and services. A 1.5°C scenario is not possible without decarbonising our ways of making stuff.
  • Renewable energy deployment – together with emission reductions, renewable energy purchases are a very important contribution to decarbonising the economy. However, care must be taken not to incorrectly disclose the contribution of corporate renewable energy PPAs to an organisation’s GHG inventory. Leading organisations clearly articulate that their renewable energy purchases are equivalent to their energy consumption, not that they’re “100 per cent renewable”. Renewable energy purchases need to be treated as contributions to decarbonisation (a production subsidy) rather than emission reduction claims, which aren’t even attached to a renewable energy certificate.
  • Offsets – offsets will continue to play an important role in addressing climate change, but only if rigorous due diligence is undertaken. Especially in Australia, the common misconception of ACCUs being better than international units by default and that price is a good indicator of offset quality must be overcome. What is important is a clear understanding of additionality and financial barriers, permanence, leakage, vintage, and double-counting – not all offsets are equal; quality and risk assessments of offset projects are critical. When choosing carbon offset units, preference should be given to those that address actual emissions avoidance and reductions and thus accelerate decarbonisation.
  • Removals – additional removal of CO2 is necessary as an important part of a comprehensive strategy to deal with climate change; the IPCC is clear on this – all mitigation strategies include removal of CO2. But instead of relying on removal offsets exclusively, these should be used in addition to the options identified above.

Where to from here?

In a time of carbon neutral and the proliferation of net zero claims, it may be time to review the current approach to reaching what’s “required” by science. It’s understandable that carbon neutral certifications and net-zero target validations appear to be feasible alternatives to failing climate policy. However, these must not be achieved on the back of low-quality offsets, simplified renewable energy purchases, or relying on removals alone.

Instead, the time has come to do more than what’s necessary to achieve certification or validation. As time to prevent the most dangerous consequences of climate change is running out, no one single approach is enough. Instead, all three approaches are required – reduce operational emissions, offset residual emissions, and contribute to decarbonisation and removal of atmospheric CO2.

One approach could be to discount offset purchases. Instead of offsetting 1000 tonnes of CO2-e, an organisation may elect to offset 2000 tonnes from a mix of offset projects that address fossil fuel avoidance and CO2 removal – In addition to purchasing renewable energy.

While organisations may have already built partnerships with offsetting businesses and/or particular projects, such as forest protection, reforestation, or savanna fire management, it is crucial for long-term credibility that the climate benefits are correctly communicated to shareholders, customers, and investors. To this effect, organisations should:

  • back up carbon neutral and net zero pledges with ambitious operational emission reduction targets. In the absence of mandatory emission reduction requirements in some voluntary programs, such pledges are only meaningful if they’re supported by fossil fuel avoidance and reduction measures within organisations’ reporting boundaries;
  • ensure the terminology and wording used to describe chosen carbon offset and renewable energy purchases accurately represent scientific realities and the climate change mitigation benefits being achieved;
  • enable stakeholders to understand that carbon offsets purchased do not neutralise fossil fuel emissions from economic activity per se but rather result in relatively lower concentrations of greenhouse gases in the atmosphere compared to the alternative of not offsetting; and
  • ensure the carbon offset projects supported are selected carefully and reported on regularly, including the total volume of GHG avoidance or reduction, the methodology for estimating emissions, as well as due diligence criteria.

The formula to achieve net zero (if not net negative), to solve for x, is this: Net zero = emissions – operational emission reductions – fossil fuel-based offsets – renewable energy deployment – removals.

Alexander Stathakis is the director of Conversio.

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