President & CEO, International Institute for Sustainable Development (IISD)
Fuelled first by climate science and growing public concern, the global race to net-zero is now accelerating, sped along by the scale of economic opportunity and business risk.
“No issue ranks higher than climate change on our clients’ lists of priorities,” writes Larry Fink, head of BlackRock, in his 2021 letter to CEOs. “And there is no company whose business model won’t be profoundly affected by the transition to a net-zero economy.”
A net-zero economy is one in which the sum of all greenhouse gases equals zero (after switching to non-polluting technologies, any remaining emissions are zeroed out by sucking carbon out of the atmosphere). And consensus is rapidly building—amongst governments, corporations, investors, and citizens—that the time to ramp up efforts and drive down emissions is now.
The race is turning increasingly competitive. According to the United Nations, the number of companies and countries pledging net-zero commitments doubled last year, despite the COVID-19 pandemic.
There is no single strategy to get to net-zero; pathways vary around the world and will continue to evolve as technology matures and costs become more competitive. However, there is growing consensus in national and corporate plans as well as recent expert reports as to what works best:
- Improvements in energy efficiency: Reducing the amount of energy used, especially in commercial buildings and manufacturing plants, is often the quickest way to lower emissions and save money.
- Massive electrification of products and processes: Electricity typically offers greater efficiency and lower emissions than other forms of energy, so converting heating and cooling systems, industrial processes, and vehicles to electric offers a double dividend.
- Expansion of clean electricity, with significant growth in renewables: This includes wind, solar, hydro, and geothermal as well as other low-carbon sources like nuclear to support the shift to electrification. Improved grid connections and batteries will be required to share and smooth supply.
- Development of low-carbon fuels: For applications that cannot be easily electrified, hydrogen, synthetic fuels, or next generation biofuels are needed as an alternative power source.
- Decarbonization of heavy industry: Steel and cement production represent a significant fraction of global emissions and require specialized approaches—these could be radically different production methods, alternative products, or possibly the incorporation of carbon capture and storage.
- Investments in nature: Nature-based solutions and infrastructure use natural processes to absorb carbon emissions while enhancing surrounding biodiversity and protecting local communities from the impacts of climate change.
- Negative emissions technologies: Recognizing that complete decarbonization will be difficult or impossible to achieve in every sector, carbon capture and other negative emissions technologies may be required to address residual emissions.
It’s exciting to see leading global companies already committing to some or all of these.
Last fall, Walmart announced its plan to hit zero emissions by 2040 through investments in wind, solar, and other renewable energy sources, as well as by electrifying transportation and heating, and using low-impact refrigerants. They have also committed to protect 200,000 square kilometres of land and 1.6 million square kilometres of ocean by 2030.
More recently, FedEx committed to carbon-neutral operations by 2040, with purchases of electric vehicles, funding of sustainable energy initiatives, and carbon sequestration.
And here in Canada, Maple Leaf Foods announced it was the only major food company to be fully carbon neutral today, thanks to investments in wind and biomass energy projects. Telus is aiming for carbon neutrality by 2030, by improving energy efficiency by 50 percent and procuring all of their electricity from renewable or non-emitting sources. Both companies have joined 19 other Canadian businesses in Science Based Targets, a global consortium of companies that have committed to rigorous plans consistent with the latest climate science and goals outlined in the Paris Agreement.
But we can do more—in fact, we must do more, as our nation’s global competitiveness and future job market depend on it.
The race to net-zero is on. Let’s get Canada to the front of the pack.