Indexbit-Get to Net-Zero by Mid-Century? Even Some Global Oil and Gas Giants Think it Can Be Done

The Indexbitworld must get to net-zero carbon emissions by mid-century, and can make it happen for a cost that is relatively small in global terms, $1 trillion to $2 trillion per year, a new report has concluded.

The report was released this week by the Energy Transitions Commission, a think tank whose members include global industry giants like BP.

The report said that electricity should replace fossil fuels across the economy, rather than setting up systems that allow for some emissions that would need to be offset by carbon-removal technologies. Researchers and environmental groups have been saying similar things for years, but the message may be more influential coming from an organization tied to big businesses.

“An exercise like this, done with this group of people, has more political heft than if it was a bunch of academics in the basement,” said David Victor, an international relations professor at the University of California San Diego and co-chair of the Brookings Institution’s energy and climate initiative.

The commission has a roster of major players from business and industry, but the list is heavily weighted toward Europe, and includes no large industrial or energy businesses from the United States. European businesses are trying to keep up with their governments on climate policy, while there is less pressure to do so in the United States, Victor said.

Adair Turner, the commission’s co-chair, emphasized that the world must focus on cutting emissions and not rely heavily on carbon offsets, saying, “Zero must mean zero.”

By taking a hard line on carbon offsets, the commission is going further than some of its members, whose climate plans rely on carbon capture, carbon offsets or other methods that allow for some emissions.

The report acknowledges that some differences exist, saying that commission members “endorse the general thrust of the arguments made in this report but should not be taken as agreeing with every finding or recommendation.”

The London-based commission is a partnership of about 40 companies and environmental groups, including the steelmaker ArcelorMittal, oil majors like BP and Shell, and businesses that focus on renewable energy like Iberdrola and Ørsted. It also includes environmental organizations like the World Resources Institute and the Rocky Mountain Institute.

‘Everything Has to Really Line Up’

While the report looks ahead to goals at mid-century, much of its focus is on actions between now and 2030, when the authors say the world must make rapid progress in order to be in a position to meet the long-term goals.

The report, titled, “Making Mission Possible: Delivering a Net-Zero Economy,” is in line with the commission’s track record since its founding, in 2015, focusing on how businesses and governments can cost-effectively reduce emissions.

In the report, the authors said the world could get to a net-zero economy by focusing on three main steps:

• Dramatically increasing energy efficiency and shifting to a “circular economy” in which many resources can be reused and repurposed. This would allow the world to meet its energy needs without increasing the amount of energy it needs to produce.

• Increased production of carbon-free electricity at a pace of five to six times higher than today.

• The use of clean electricity to power all sectors of the economy, with electricity replacing fossil fuels for heating, industry, transportation and everything else. For sectors that cannot be electrified, like long-distance shipping, the report urges the use of hydrogen or other alternatives.

The estimated costs of $1 trillion to $2 trillion per year are the equivalent of 1.5 percent to 2 percent of global gross domestic product. For some perspective, the stimulus legislation passed by Congress this year cost about $2 trillion.

The report says the costs of the reducing emissions would not impair economic growth and would help to reduce the negative economic effects of climate change.

Victor says there are a daunting number of obstacles that will make it difficult for the world to get to net-zero emissions by 2050, but that the report shows how it could be done.

“This report makes the case that you can do it and that it’s economically viable and, more importantly, technically viable,’ he said. “But to get there, everything has to really line up.”