NOTES Getting to net zero Notes by Barney Macintyre - Winter 2020 Over the next two decades – three at most – the human species has to end its reliance on fossil fuels or face accelerating climate change. Failure would mean more famine, bigger deserts, fiercer storms. It would mean rising sea levels and a global migration emergency as the new status quo. It would mean we had refused collectively to heed the warnings of science and harness our capacity to act. Inertia would have won. There’s a risk that we compound the dangers by paralysing ourselves with nightmare scenarios that seem too daunting to resist. Let’s not do that. As Gene Kranz urged Mission Control, let’s work the problem. We have to reverse the upward trend in carbon emissions, but thanks to satellite-based remote sensing we also have a better understanding of our planet than Kranz could have imagined. Renewable energy is cheaper and more abundant than ever. Clean energy storage in batteries and with hydrogen is being revolutionised. Capital markets are starting to price carbon with climate in mind, and the energy sector – BP included – is responding. The generation of leaders that will convene this year’s COP26 conference in Glasgow has failed to galvanise the global effort needed to safeguard the biosphere. That doesn’t mean today’s generation of students has to fail too. There’s a great challenge all around us. We hope these notes help bring it into focus. What’s this? 20’ reading time Published: Winter 2020 Editor: Giles Whittell Design: Nick Stone Graphics: Chris Newell Cover illustration: Sjoerd van Leeuwen Part one Can we invent our way to net zero, or is it too late? ‘Listen to the science’ is good advice for a planet facing accelerating climate change, but what does it mean in practice? Can we still harness technology to drive down emissions fast enough to control global warming, or have we passed a point of no return? What does the science say? Carbon is cumulative Around 60 per cent of the carbon dioxide emitted by humans ends up in the atmosphere. The earth naturally captures that CO2 through geological processes that take thousands of years. But for as long as humans have used fossils for fuel, it has accumulated above our heads. Ice cores show that for the past half a million years atmospheric CO2 levels have been between 180 and 300 parts per million (ppm). They are now at 407 ppm and counting. Even if humanity kicks its carbon habit, greenhouse gas levels could stay high for decades because atmospheric emissions are cumulative – without largescale carbon capture, they will only go up. And their rise has a direct consequence on the time-scale humans have to limit global warming. In 2018 the IPCC said that we have 12 years to keep temperatures below 1.5°C above pre-industrial levels this century. This would require a 45 per cent carbon emissions cut by 2030. Yet even 12 years may be misleading. To stay within 1.5°C, the IPCC noted that emissions must peak this year. Beware the other greenhouse gases The IPCC 1.5°C report also makes clear we need deep cuts to emissions of other greenhouse gases. Emissions of methane, which has greater warming potential but a shorter atmospheric lifetime than carbon, need to drop 35 per cent between 2010 and 2050. We’ll need to make changes in agriculture to reduce emissions of nitrous oxide – a gas that is 300 times more effective at trapping heat than CO2. Concentrations Compound PreIn 2011 industrial (ppmv) (ppmv) Atmospheric Main human lifetime activity source Global warming potential Carbon dioxide (CO2) 280 390 50 to 200 years Fossil fuels, cement production, land use change 1 Methane (CH4) 0.715 1.803 12 years Fossil fuels, rice paddies, waste dumps, livestock 25 Nitrous oxide (N2O) 0.27 0.324 114 years Fertilisers, combustion, industrial processes 298 HFC 23 (CHF3) 0 0.000024 270 years Electronics, refrigerants 14800 HFC 134a (CF3CH2F) 0 0.000062 14 years Refrigerants 1430 Source: Center for Sustainable Systems, 2019 2 GETTING TO NET ZERO TORTOISE NOTES 3 Source: Projections from the Stern Review, Carbon Brief, FAO, The Guardian, NASA & other publications. Biodiversity Economy Food security Extreme weather Water Degrees of danger +1.5°C +2.0°C +2.5°C 821m already suffering from hunger Since the 1980s, wildfire season has lengthened across a quarter of the world’s surface +3.5°C 13% more heavy rain in most land areas Coral becomes extinct ...growing to 0.19% as temperatures vary more Fisheries decline by 1.5m tonnes Decline by 3m tonnes 13% land areas shift from one biome to another 18% of insects, 16% of plants, 8% of verterbrates 6% of insects, 8% of plants and 4% of verterbrates have ranges reduced by half Coral reefs decline by 70-90% and stop growing 0.05% decrease on GDP from energy demand for heating and cooling Annual flood damages risk from 10.2 to $11.7tn 0.9% decrease in GDP Entire regions experience major crop declines (up to a third in Africa) US could lose 2.3% of GDP for every °C of warming Food prices and poor health puts another 122m into extreme poverty by 2030 Maize yields fall from -6 to -9% Falling crop yields in developing regions US areas burned by wildfire increase 600% Number of category 4 cyclones doubles Ocean floor starts releasing methane Gas released from melting permafrost Europe gets a heatwave every summer Rise in storm, hurricane and cyclone intensity +4.5°C London and New York +4.0°C No Arctic Sea ice in September Osaka inundated Greenland’s ice sheet 30% less water available in Mediterranean starts disintergrating and Southern Africa People exposed to severe heatwaves goes from 14 to 37% Small mountain glaciers melt – water supplies put at risk +3.0°C Eventual temperature change (relative to pre-industrial) Ocean is 30% Amsterdam inundated more acidic than 200 Annual average Arctic Sea ice extent years ago declines by 15% for every °C Where we are now +1.0°C +5.0°C Five gadgets to save the planet 2. Personal PVs 1. The zero-carbon home Problem: More than a third of global CO2 emissions come from generating electricity. IEA, 2018 Problem: Energy use in homes accounts for 14 per cent of UK greenhouse gas emissions. This needs to fall by a quarter by 2030 compared with 1990 levels if we want to keep warming to within 1.5°C. CCC, 2019 Solution: Installing a heat pump and insulation can save the average British household £85 per year in energy costs. Building 270,000 new homes with wood rather than carbon-intense concrete would triple the amount of carbon stored in UK homes each year. CCC, 2019 Materials Building a quarter of a million homes with timber could triple the amount of carbon stored in UK homes every year Efficiency Insulation and double glazing can lead to lower bills, improved health and fewer people in fuel poverty Source: CCC, 2019 6 GETTING TO NET ZERO Fuel Heating systems that burn oil or gas need to be replaced with low- carbon alternatives including heat pumps in the walls and solar panels on the roof Problem: 860 million people lack access to electricity. Solution: Solar panels. Enough solar energy hits the earth’s surface every hour to provide for current energy needs for an entire year. Photovoltaic (PV) solar panels act as semiconductors that convert this energy into electricity. They’re cheap, and getting cheaper – the cost of solar energy is already on par with average wholesale prices in many parts of the world and will drop another 63 per cent by 2050. Small-scale panels purchased by consumers will make up 11 per cent of the total generating capacity in 2050. BNEF, 2019 Off-grid solar power in Kenya Volumes of off-grid solar appliance sales Jul-Dec 2018 Jan-Jun 2019 17.9m People without electricity access 0 80,000 All appliances TVs Fans Refrigeration units Solar water pumps Off-grid solar lighting product sales volumes since 2016 1m 0.5m Interactivity Smart home energy systems connected to efficient appliances and thermostats can help save energy and costs 0 2016 2017 2018 2019 Source: Off-grid Solar Market Trends Report TORTOISE NOTES 7 3. Happy cows 4. Batteries on wheels Problem: With the world’s population expected to reach 9.6bn by 2050, global meat consumption could rise by 70 per cent. That’s especially troubling since 14.5 per cent of the emissions caused by human activity already comes from livestock. Grazing and growing the crops that feed them takes up the majority of agricultural land. FAO Problem: At times of peak energy-use the UK's power grid is forced to use energy made using fossil fuels because energy from renewable sources has run out. Human land use Other Unforested Extensive pasture land ecosystems 19% 12% 16% Cropland Forests managed 12% for timber and other uses 20% Solution: By 2050 there could be 35m electric vehicles (EVs) on Britain’s roads and electrified transport could lead to 30 per cent growth in electricity consumption. Smart charging of EVs (i.e. plugging them in overnight) will be essential to keeping demand balanced. It’s estimated up to £90m a year could be shaved off the cost of increasing grid capacity by storing energy in the batteries of EVs to be delivered back to the grid when needed. Edie, 2019 Annual lithium-ion battery demand Intensive pasture 2% Infrastructure 1% Source: IPCC Plantation Forested ecosystems forests 2% 9% Used savannas and shrublands 16% Solution: Shifting our diets from meat-based to plantbased and cutting food waste are the first steps we need to take. But at current rates of consumption we’ll also need to change how meat is made. Solution: Converting 203 million acres of current pasture into silvopasture – grazing land with trees interspersed – could absorb 31 gigatonnes of CO2 while also improving yields and animal health. It’s a pernicious myth that cows and trees don’t mix. Drawdown 8 GETTING TO NET ZERO Passenger EVs Commercial EVs Consumer electronics Stationary storage E-buses 2,000 Gigawatt hours 1,500 1,000 500 0 2015 2020 2025 2030 Source: BloombergNEF, Avicenne TORTOISE NOTES 9 5. Carbon reduction Problem: For those sources of emissions we can’t cut, we’ll need to use technologies that suck carbon out of the atmosphere. Solution: Trees. Planting a trillion of them on the billion hectares of land available for forest restoration could remove the equivalent of a third of all CO2 emissions humans have added to the atmosphere since the start of the industrial age. Bastin et al., 2019 Part two Whose job is it to fight climate change – activists, voters or the people they elect? Last year saw an upsurge of climate activism that focused minds from the UN to Westminster and Wall Street. But the next step – turning activism into action – looks more complicated. Who’s going to take it? Left to grow Indian Rosewoods can sequester more than 2 tonnes of carbon each by the time they reach maturity. That stays locked up if the trees are left to grow or used for housing or furniture The Greta effect Carbon stored 2 6 10 14 18 years years years years years In the UK, concern about the environment is at the highest level on record… % saying issue is one of the top three facing the country Extinction Rebellion protests Harvested young 50% Often harvested after just six years, trees like plantation eucalyptus usually release carbon quickly back into the atmosphere via pulp mills, 2 6 10 14 18 years years years years years incinerators and landfill 25% Solution: Man-made machines that capture waste carbon at its source or direct from the air may also be required for certain sectors. Carbon capture and storage (CCS) has yet to be applied at scale but is nevertheless included in most net-zero scenarios. 10 GETTING TO NET ZERO Immigration and asylum Economy Environment 0% 2017 2018 2019 Source: YouGov …but how to turn rising anxiety into meaningful action? The sheer number of reports, figures, and campaigns can be overwhelming. And who’s to say that our own efforts to be sustainable won’t be undone by a more selfish person somewhere else? Is Greta Thunberg right when she says that “no one is too small to make a difference”? TORTOISE NOTES 11 Eat well “Our house is still on fire. Your inaction is fuelling the flames by the hour. We are still telling you to panic, and to act as if you loved your children above all else.” If the world’s population moved to a plant-based diet, emissions would fall by up to 8bn tonnes (25 per cent) a year and human health would improve. IPPC Greta Thunberg’s speech at the Davos World Economic Forum Annual Meeting, 2020 Greenhouse gas emissions (kg CO2 equivalent) released per 100g of protein for various foods What you can do to save the planet Pork 7.6kg Cheese 11kg Individual behaviours, when applied at a global scale, have the potential to remove up to a third of cumulative greenhouse gas emissions released into the atmosphere between 2020 and 2050. RARE, Drawdown, 2019 Egg Beef 4.2kg 50kg Pulses 0.8kg Lamb 20kg Tofu 2kg Poultry 5.7kg Nuts 0.3kg Source: Science Mag Potential for emissions to be cut by 2050 Cuts that require changes in behavior Solution Travel well Other solutions Gt CO2 equivalent Solution Gt CO2 equivalent Reduced Food Waste 71 Refrigerant Management 90 Plant-Rich Diet 66 Wind Turbines (Onshore) 85 Silvopasture 31 Tropical Forests 61 Rooftop Solar 25 Educating Girls 51 Regenerative Agriculture 22 Family Planning 51 Tropical Staple Trees 20 Solar Farms 37 Conservation Agriculture 17 Peatlands 22 Tree Intercropping 17 Temperate Forests 22 Clean Cookstoves 16 Afforestation 18 Managed Grazing 16 Geothermal 17 Farmland Restoration 14 Nuclear 16 Electric Vehicles 11 Wind Turbines (Offshore) 14 Improved Rice Cultivation 11 Source: RARE, Drawdown, 2019 12 GETTING TO NET ZERO Global emissions from aviation could increase 180 per cent by 2030. A return flight from London to Rome emits 234kg of CO2 per person, which is more than the average person in 17 of the lowest-emitting countries produces in a whole year. Bloomberg, 2019 Dress well The global fashion industry has an annual carbon footprint of 3.3bn tonnes of CO2 equivalent. That’s close to the combined carbon footprint of all 28 current members of the EU (3.5bn tonnes). The Guardian, 2015 “If you don’t think you’ll wear a garment at least 30 times, then don’t buy it.” Livia Firth, Founder of Eco Age TORTOISE NOTES 13 Protest In the 20th century political parties and NGOs like Greenpeace championed environmentalism. Now it’s international grassroots movements like Extinction Rebellion and Fridays for Future that are taking action. Extinction Rebellion gets the most support from younger adults Do you support or oppose disruptive climate protests? Support 47% 38% 36% 28% Who are XR? Extinction Rebellion (XR) was founded in 2018 by Roger Hallam, an organic farmer from Wales, and Gail Bradbrook, a director of strategy in non-profit work. Among the movement’s demands are (1) a government declaration of a climate and ecological emergency, (2) net zero greenhouse gas emissions by 2025, and (3) handing government decision-making on climate policy to a citizens’ assembly. Two of those demands have been met (sort of): the UK declared a climate emergency in May last year and the first citizens’ assembly took place in January 2020. While XR activists welcomed it, they said they “cannot pretend that this is a legitimate assembly with real or legislative power”. 72 Countries with an XR branch 643,000 Instagram followers 3,000 Number of arrests in the UK during two protests in April and October of last year >1m Total income in £’s last October 59 Per cent of XR’s income that was crowdfunded in last quarter of 2019 18-24 years 25-49 years 50-65 years Oppose 65+ years 65% 41% 46% 53% 18-24 years 25-49 years 50-65 years 65+ years Source: BBC/YouGov, April 2018=9 Fridays4Future In April 2019 1.6m students in more than 300 cities protested for climate action, eight months after the first school strike by 16 year-old climate activist Greta Thunberg in Stockholm. The Guardian In early September, the number of people walking out of schools or classrooms to protest lack of engagement in the climate emergency had swelled to 6m. 350.org, The Guardian Extinction Rebellion 14 GETTING TO NET ZERO TORTOISE NOTES 15 Cumulative number of Fridays for Future events and participants Events People 40,000 15m Promises of net-zero Status Country In law Sweden Proposed date 2045 Includes international aviation and shipping? No UK 2050 Yes France 2050 No New Zealand 2050 No Proposed legislation Chile 2050 Unclear Fiji 2050 No In policy document Norway 2030 No A Friday in jail Uruguay 2030 No Arshak Makichyan is a 25 year-old violinist from Armenia. Inspired by Greta Thunberg, Makichyan joined the Fridays4Future movement and spent 40 weeks solostriking in front of his school in Moscow. Last December, Russian authorities detained him for a week for demonstrating. Finland 30,000 10m 20,000 5m 10,000 0 2019 0 2019 Source: Fridays for Future Despite the fact that Russia is warming 2.5 times faster than the planet as a whole, President Vladimir Putin has repeatedly denied that climate change is the result of human activity. PRI, 2015 Iceland Target under discussion What is government promising to do about the climate crisis? The UK government has set itself the challenge of reaching net-zero greenhouse gas emissions by 2050. How ambitious, and achievable, is that target? 16 GETTING TO NET ZERO 2035 2040 No No Switzerland 2050 Unclear Denmark 2050 No Portugal 2050 No Costa Rica 2050 No EU 2050 No Germany 2050 No Italy 2050 Unclear Canada 2050 Unclear Spain 2050 No Mexico 2050 Unclear Source: ECIU, 2020 TORTOISE NOTES 17 During the last UK general election Tortoise asked whether mounting public awareness of the climate emergency was reflected in the manifestos of the four main political parties. Here’s what we found: Labour Page 6 First mention Climate as pagination Conservatives Pages 9-24 Full treatment on plans for “a Green Industrial Revolution” Page 43 First mention Page 55 Full treatment Greens Page 1 First mention Pages 5-27 Full treatment on plans for “the Green New Deal” 18 GETTING TO NET ZERO Lib Dems Page 7 First mention Pages 39-49 Full treatment on plans for “a Green Society and a Green Economy” TORTOISE NOTES 19 Accountability “Young people standing up in court for their right to a viable future may be our best chance to ensure that we rise to the challenge and fight hard to avoid the worst impacts of climate change.” Paul Rink, Yale School of Forestry and Environmental Studies Australia 94 EU 55 UK 53 New Zealand 17 Ireland 3 South Africa 3 UN Human Rights Committee 1 Philippines 2 Austria 1 Inter-American Commission on Human Rights 2 Ecuador 1 Norway 1 Netherlands 2 Poland 1 Colombia 2 Sweden 1 Pakistan 2 Belgium 1 Spain 13 Ukraine 2 India 10 Czech Rep. 1 Inter-American Court on Human Rights 1 France 6 Indonesia 1 Switzerland 1 Brazil 5 Nigeria 1 Germany 5 Uganda 1 Canada 16 In recent years, climate advocates, many of them children, have begun to invoke these rights in court in order to hold governments to account: UK Secretary of State for Environment vs Client Earth Number of climate change cases filed by jurisdiction United States 1,023 Over 75 per cent of national constitutions contain some reference to environmental rights or responsibilities. The UN Special Rapporteur on Human Rights and the Environment stated that “climate change clearly and adversely impacts the right to life”. Rink et al., 2019 Client Earth, the environmental law firm, has won three cases against the UK government over illegal air pollution. Last year the High Court ruled that there was a failure to require action from 45 local authorities with unlawful pollution levels. State of the Netherlands vs The Urgenda Foundation In 2015, the NGO Urgenda, together with 900 citizens, won a case against the Dutch government, forcing it to take more action on climate change. The High Court ruled that the Netherlands must reduce national greenhouse gas emissions by a quarter by 2020 (relative to 1990 levels). Source: Grantham Institute, 2019 20 GETTING TO NET ZERO TORTOISE NOTES 21 What else should governments do? Tricky transitions Price carbon Carbon pricing can be an effective way of reducing emissions. But flat fuel taxes also have the potential to disproportionately affect the most vulnerable in society. 46 governments around the world have implemented a form of carbon pricing, either through direct taxation on fossil fuel producers or cap-and-trade programmes. 13 per cent of annual global emissions are within a CO2 pricing framework. IMF Share of emissions from energy-use priced above €30 per tonne of CO2 (the OECD’s lower estimate for the price needed to achieve the objectives of the Paris agreement) 0% 75% The Gilets Jaunes In 2018, proposed energy tax reforms by the French government threatened the poorest tenth of the population with an effective tax burden that was nearly three times higher than for households in the top decile. Tax burden increase from proposed French energy tax, per income decile 0.6% 0.4% 0.2% 0% 1 2 3 4 5 6 7 8 9 10 Source: OECD, 2019 Source: OECD, 2019 $2 a ton: global average carbon price $50 a ton: price which, if implemented in all G20 countries, could prevent 600,000 premature deaths from air-pollution by 2030 $75 a ton: carbon price consistent with 2°C warming target IMF Fiscal Monitor 22 GETTING TO NET ZERO The Gilets Jaunes movement was a response. At its height 285,000 people across France wore the signature high-vis bibs. Emmanuel Macron’s government scrapped the tax increase on 5 December following violent clashes in Paris that led to eleven deaths. A global approach Cutting domestic emissions is only part of the battle. Around 22 per cent of global CO2 emissions come from goods produced in countries where they are not, ultimately, consumed. Carbon Brief, 2017 TORTOISE NOTES 23 Imports to the UK from countries outside the EU constitute 45 per cent of our total imports but are responsible for 79 per cent of imported emissions. This is largely due to imports of agricultural and manufactured goods from countries like China where energy is carbon intensive. CCC, 2019 International and imported emissions accounted for UK carbon footprint increases totalling 613 million tonnes of CO2 equivalent in 2016 473m tonnes 784m tonnes Territory based 473m Territory based 473m Net imported 268m International shipping 9m International air travel 34m Source: ONS One way to price these international emissions could be to establish a “carbon border tax”. This would force consumers in the West to pay for the carbon used to make products abroad. Some businesses say this would present an obstacle to free trade. “The bottom line is that carbon consumption, not production, is what counts. Any serious global climate policy would have those who cause the emissions paying for them. And the obvious answer is to price carbon whatever its source.” Part three Business and net zero Business leaders like to talk about tackling climate change… “Climate change has become a defining factor in companies’ long-term prospects… Awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.” Larry Fink, Chairman and CEO of BlackRock, 2020 Letter to Shareholders …but are they walking the walk? – Despite voicing concern for climate-related risk, asset managers BlackRock and Vanguard blocked 16 climate-critical shareholder resolutions at S&P 500 companies last year. The Guardian, 2018 – 100 companies were responsible for 71 per cent of estimated global emissions between 1988 and 2015. Full Fact, 2018 – Since 2010, the world’s five biggest publicly traded oil and gas companies – Chevron, BP, Exxon Mobil, Shell and Total – have spent more than a quarter of a billion euros lobbying the EU. During the 2018 US midterm elections, oil majors spent a collective $2m on targeted Facebook ads that promoted the benefits of increased fossil fuel production. InfluenceMap, 2019 Professor Dieter Helm, Financial Times, 2010 24 GETTING TO NET ZERO TORTOISE NOTES 25 Total lobbying spend of the US oil and gas industry, 1990–2018 $150m $100m Consumer Digital and media Finance Extraction Engineering The rest 10 million tonnes of CO2 equivalent 1 million Rio Tinto Group BHP $50m Shell Evraz $0 1992 1996 2000 2004 2008 2012 Glencore 2016 Source: Open Secrets Tortoise’s Responsibility100 Index ranks companies in the FTSE 100 on their “talk” (how many promises they made to improve sustainability) and “walk” (their actions). CRH plc 82 -74 Mining 68 Mondi 2 75 -73 Packaging 55 Royal Dutch Shell 16 86 -70 Energy 74 Smurfit Kappa 26 91 -65 Packaging 85 Carnival Corporation & plc 35 90 -55 Travel 86 M&G 33 83 -50 Financial Services 78 Prudential plc 33 83 -50 Insurance 78 CRH plc 37 85 -48 Construction 83 DS Smith 45 93 -48 Packaging 91 Polymetal International PLC 43 89 -46 Mining 87 Se IAG To ra tal nk ct or k ap 8 G k W al Glencore Co Ta l m pa ny BP Source: Tortoise Responsibility100 Index BP's pledge In February 2020 BP said it planned to cut carbon emissions from its operations and the oil and gas it sells to net zero by 2050. That would be a reduction of 415 million tonnes of CO2 a year, more than other oil companies have pledged. Standard Life Aberdeen, a shareholder, called the announcement "significant". Greenpeace UK said the 2050 deadline was too far off. A spokesman asked: "What are they going to do this decade, when the battle to protect our climate will be won or lost?" Source: Tortoise Responsibility100 Index 26 GETTING TO NET ZERO TORTOISE NOTES 27 How can business help us get to net zero? “Carbon emissions have to decline by 45 per cent from 2010 levels over the next decade in order to reach net zero by 2050. This requires a massive reallocation of capital. If some companies and industries fail to adjust to this new world, they will fail to exist.” Known reserves and varying estimates of how much CO2 can be released under the terms of the Paris Agreement Emissions from all known oil and gas reserves 3,683 gigatonnes IPCC 2013 1,300 Potsdam Institute 2011 565 IEA 2017 880 Mark Carney, Governor of the Bank of England 1. Measure Source: Carbon Tracker More than 8,300 companies have disclosed information on their environmental performance to the Carbon Disclosure Project. Growth of fossil-fuel divestment Cumulative number of committed institutions Cumulative represented assets Under regulations added to the UK Companies Act in 2013, quoted companies are required to list emissions in their directors’ report. Accurate carbon footprint reporting could help cut four million tonnes of CO2 emissions by 2021. Defra 1,500 $10tn 285 companies around the world have approved a science-based target specifying exactly how they plan to limit emissions in alignment with the Paris goal of below 2°C. Science Based Targets, 2019 2. Divest UCL’s Institute for Sustainable Resources estimates that a third of all oil reserves, half of gas reserves and 80 per cent of coal reserves as of 2015 need to stay in the ground until 2050 if we are going to stick to 2°C. 28 GETTING TO NET ZERO 1,000 $5tn 500 0 2012 2014 2016 2018 $0 2012 2014 2016 2018 Source: Gofossilfree.org In response to this problem, the number of institutional investors dumping fossil fuel stocks has risen from 180 in 2014 to more than 1,100 today. Total assets under management in divesting institutions have passed the $11tn mark – a rise of 22,000 per cent from 2014. 350.org TORTOISE NOTES 29 3. Decarbonise The sustainable supply chain Emissions from a company’s entire supply chain including its products (known as scope 3 emissions) are on average 5.5 times higher than emissions by the company itself. CDP, 2019 There’s growing awareness that governments alone can't get us to net zero. We increasingly look to companies to lead on sustainability issues, to work with governments and NGOs and to be transparent about their operations. Some have already made positive changes: Raw materials Enable cleaner sourcing/ manufacturing Production Reduce total volume and/or mass shipped Port – Unilever has been active in supporting local government in Sabah, Malaysia, to stick to it's commitment to sourcing palm oil that is certified by the Roundtable on Sustainable Palm Oil. – In 2007, Coca-Cola committed to replenish an amount of water equivalent to their sales volume, and worked with thousands of franchises and communities to achieve that goal. – Walmart is working with 500 of its biggest suppliers to analyze supply chains in an effort to mitigate one gigatonne of CO2 emissions. Lower emissions in transit Reduce transit distances Supplier or retailer Enable cleaner warehouse operations Use Increase recycling/ re-use Remove nodes/legs Inbound logistics Distribution centre Source: WEF 30 GETTING TO NET ZERO TORTOISE NOTES 31 4. Incentivise Case study: Doing a Dong One in four European companies reward their senior management for meeting climate targets. CDP But only 62 per cent of CEOs say they would agree to link their pay to sustainability outcomes. Accenture, UN Global Compact, 2019 Most pension funds don’t hold executives accountable on climate issues: No accountability or information 64% Dedicated team or position below the executive 6 In 2012 Dong, Denmark’s largest oil and gas company, was in the red. Natural gas prices were dropping fast and its S&P credit rating was downgraded to negative. A new CEO was installed and the company changed its name – and focus. Dong is now called Orsted and is the world’s biggest offshore wind developer, controlling a third of the market outside China. The company has committed to reducing greenhouse gas (GHG) emission intensity from its energy production by 96 per cent by 2023. This might not hurt that much… “The business case to invest in a transition to a low-carbon economy is becoming extremely compelling.” Executive accountable 26 David Blood, Managing partner, Generation Investment Management Total assets under management, selected regions Other 4 Source: Share Action $92tn Of which sustainable $30.6tn Japan £2.2tn (18.3%) Europe £14tn (48.4%) Australia/N Zealand £0.7tn (63.2%) Canada £1.7tn (50.6%) US £12tn (25.7%) Source: BloombergNEF 32 GETTING TO NET ZERO TORTOISE NOTES 33 Cheapest energy generation technology, by country 2014 Source: BloombergNEF New Energy Outlook Belgium Bulgaria Chile China France Greece India Indonesia Italy Japan Coal Malayasia Morocco Poland South Africa South Korea Spain Thailand Turkey UK Vietnam Algeria Argentina Australia Brazil Canada Egypt Israel Gas Mexico Peru Philippines Russia Saudi Arabia US UAE Denmark Germany Wind Uruguay 2019 Indonesia Japan Malayasia Philippines Coal Poland South Korea Thailand Turkey Vietnam Algeria Belgium Gas Bulgaria Greece Russia Argentina Brazil Canada China Denmark Germany Wind Mexico Morocco Peru UK US Uruguay Australia Chile Egypt France India Solar Israel Italy Saudi Arabia South Africa Spain UAE Global trade in low-carbon goods and services could grow from £150bn in 2015 to between £2.8–£5.1 trillion in 2050. Grantham Institute, 2015 Part four Living with net zero “Don’t it always seem to go, That you don’t know what you’ve got til it’s gone, They paved paradise, And put up a parking lot.” Big Yellow Taxi by Joni Mitchell Combating climate change has to start in cities. Urban areas are responsible for around 70 per cent of energy-related carbon emissions. They produce more than half of global waste and consume three quarters of natural resources. By 2050, 66 per cent of the world’s population will live in them. UN, 2018 Cities are polluting, and they are vulnerable. Over 90 per cent of urban areas are coastal, putting them at risk from increased flooding. By 2050, eight times as many city dwellers as now could be exposed to extreme temperatures. 650m people could face a decline in freshwater availability. For cities, preparing for the physical damage caused by climate change is almost as urgent as stopping it. C40 Cities, 2019 In the UK, low-carbon industries could grow from around 2 per cent of total output in 2015 to 8 per cent of GDP by 2030 and 13 per cent by 2050. Grantham Institute, 2015 34 GETTING TO NET ZERO TORTOISE NOTES 35 Carbon footprint of world cities in gigatonnes of CO2 300 Guangzhou Seoul 250 Hong Kong 200 Total carbon 150 footprint (GtCO2) Los Angeles Riyadh Beijing 100 50 0 0 Tokyo/Yokohama London New Delhi In Stockholm, 95 per cent of the population lives within 300 metres of a green space, 99 per cent of locallyproduced waste is recycled and 80 per cent of the city’s energy comes from renewables. Renewable Energy Atlas Pittsburgh, Pennsylvannia United States Stockholm Sweden Urban extent Urban extent Population density Population density 740 residents per km2 3,660 residents per km2 Jakarta Lagos Dhaka 5m 10m 15m 20m 25m 30m 35m 40m 45m Population Source: Global Gridded Model of Carbon Footprints The positive news is that these two issues – mitigating and adapting to climate change – can be dealt with simultaneously in many cities. Reforestation, urban planning and land and water management offer strategies for protecting cities from risk as well as cutting their carbon footprint. Homes in large towns also tend to emit less CO2 per person than those in the countryside, on account of being smaller, more tightly packed and easier to heat. CCC, 2019 A tale of two cities Levels of particulate pollution in Pittsburgh rose last year. The former steel town has the worst air quality in the US outside California, and higher than average rates of asthma and cancer. 36 GETTING TO NET ZERO GDP per capita ($) 54,192 GDP per capita ($) 80,234 CO2 emissions per capita 17.72 CO2 emissions per capita 3.15 Source: Coalition for Urban Transitions, Sedac, Nasa Work and net zero As the frequency and intensity of extreme weather events increase, the productivity of the world’s labour force will be impacted. Heat stress caused by higher temperatures could reduce the total number of work-hours in G20 countries by 1.9 per cent by 2030. ILO, 2019 TORTOISE NOTES 37 Percentage of work-hours lost owing to heat stress under a 1.5°C scenario Selected G20 countries, 1995–2030 1995 Energy transition creates more jobs In millions per energy type worldwide Coal & Oil Biomass 2030 0% 1% 2% 3% 4% 5% India Indonesia World G20 total Mexico Brazil China Saudi Arabia US Japan Argentina South Korea South Africa Australia Turkey Italy Russia France Canada Germany UK Source: ILO, 2019 But adapting to a zero-carbon economy can also create jobs. In Europe, around 500,000 new jobs could be created in adaptation-related sectors such as construction, water management, forestry and skills development. ILO, 2019 A transition to net zero by 2050 would also boost employment in the energy sector: 38 GETTING TO NET ZERO 0 6% Gas Wind Nuclear Solar 10m Water Other 20m Stored/converted 30m 40m 2020 2030 2040 2050 Source: LUT, Energy Watch Group A “just” transition Changes in climate policy are expected to impact 0.5 per cent of total employment – that’s relatively small compared with the overall job “churn” that occurs in market economies. UNPRI, 2019 But there will be workers in some sectors and regions who need extra help dealing with the transition. Historical experience of deindustrialisation shows it’s important not to leave workers or communities stranded without access to the benefits of a low-carbon economy. – The UK car industry could receive a significant boost from the move to electric vehicles. In the UK this could lead to 7,000 to 19,000 additional jobs. – Greater focus on recycling, repairing and renting could create more than 200,000 jobs in the UK. – Employment in the UK oil and gas sector fell by a third between 2014 and 2017. – There are now fewer than 700 people who work in the UK’s coal industry. ECIU, 2018 TORTOISE NOTES 39 Part five Redefining progress For most of the last century, human development has been measured almost exclusively in economic terms. But indicators like GDP per capita or the HDI (human development index) fail to account for the causes and impacts of climate change. Countries that appear at the top of the list of “most developed” are frequently the biggest emitters. In response, several models have been proposed that measure progress differently. Here’s how the UK fared in 2019: On track or maintaining SDG achievement Quality education Clean water & sanitation Affordable & clean energy Decent work & economic growth Industry, innovation & infrastructure Partnerships for the goals No poverty Zero hunger Good health & well-being Gender equality Sustainable cities & communities Climate action Life below water Life on land Moderately improving The Sustainable Development Goals Index The SDG Index is a worldwide study that tracks where each UN member state stands in relation to 17 sustainable development goals. Stagnating Reduced inequalities Information unavailable Responsible consumption & production Peace, justice & strong institutions Source: UN 40 GETTING TO NET ZERO TORTOISE NOTES 41 Wellbeing Some have argued that happiness or wellbeing are better metrics for progress than GDP, HDI or the SDGs. “Money does not equate with happiness. Population surveys have produced this striking finding, demonstrating that significant increases in average income in many countries have not translated into a corresponding rise in average levels of happiness and subjective wellbeing.” Others say it is not so much how progress is measured that’s the problem but the economic system that has underpinned progress so far. “We have not done the things that are necessary to lower emissions because those things fundamentally conflict with deregulated capitalism, the reigning ideology for the entire period we have been struggling to find a way out of this crisis.” Naomi Klein, This Changes Everything: Capitalism and the Climate, 2014 Professor Richard Layard, LSE Likewise, increased carbon consumption doesn’t necessarily make citizens happier. In certain areas of the world per capita emissions are relatively low while self-reported wellbeing is high. CO2 emissions per capita and self reported happiness score of selected countries Scandinavia Central & South America Rest of the world 8 6 Selfreported happiness 4 score 2 0 5 10 15 20 25 30 Carbon emissions per capita (tonnes) Note: Wellbeing is an individually and culturally subjective measure. Source: World Bank and World Happiness Report 42 GETTING TO NET ZERO TORTOISE NOTES 43 Tortoise is a different kind of newsroom, for a slower, wiser news. Tortoise became the biggest journalism project ever on Kickstarter in late 2018 and was launched to the public in April 2019. Tortoise is built with and for its members, of whom it has almost 30,000 at February 2020, of which over 8,000 are funded memberships through the Tortoise Network. The Tortoise Network is an inclusive membership model which ensures Tortoise journalism is open to the people who are hardest for news platforms to reach but whose voices we most need to hear. 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