US rejoins Paris climate pact. Here’s what needs to happen nextMaría Mendiluce, CEO of the We Mean Business coalition
This article first appeared on Thomson Reuters.
The US is rejoining the Paris Agreement hot on the heels of multiple net-zero announcements. Around 70% of the global economy now has net-zero greenhouse gas emissions targets or intends to set them.
To achieve net-zero we need to halve emissions by 2030 – a 7% reduction per year. This requires a major acceleration in the deployment of renewable energy, electrification and increased energy efficiency. We will need an increase in supply and strong demand signals from consumers, companies and government plus a huge scaling up of investment in nature to increase its ability to absorb carbon dioxide from the atmosphere.
We have seen a rapid uptick in the number of companies from all sectors and geographies embracing the concept of net-zero. There are now nearly 1,200 companies committed to setting science-based targets to reduce their emissions – outperforming the market by reducing their combined emissions from 2015-2019 by 25% compared to a 3.4% increase in emissions from energy and industrial processes over the same period. Five of the world’s six largest companies now have net-zero targets.
Now, many governments and companies are moving from setting climate targets to taking concrete action. This is when they realise that they cannot achieve their goals without decarbonizing materials and heavy transport.
These are called the ‘hard to abate’ sectors because of the high temperatures and energy density needed in industrial processes and to move people and goods around the world. We are currently reliant on fossil fuels to do this. How do we introduce more innovation in these sectors and their value chains to provide goods and services with much lower emissions? We need to create the conditions for nothing short of an industrial transformation.
With the COVID-19 vaccine rollout we have seen the power of human will and ingenuity to deliver solutions at incredible speed and scale. We now need to unlock this power to deliver innovation in the hard-to-abate sectors at an equal speed and scale.
Since greenhouse gas emissions are not yet fully priced into the market, governments and companies need to work together. A shared ambition can bring the best innovation to deliver the equivalent of a “vaccine” for the hard-to-abate sectors.
Cement, steel, aluminum, and petrochemicals—and the ships, planes, and trucks that move them—are the building blocks of our global economy. Bringing them to net-zero will remove one-third of global greenhouse gas emissions.
To achieve this, key parts of each entire industrial ecosystem need to be engaged.
The new Mission Possible Partnership (MPP) is focused on decarbonizing these sectors. Run by the Energy Transitions Commission, Rocky Mountain Institute, the We Mean Business coalition, and the World Economic Forum, the MPP aims to accelerate several pathways for decarbonizing heavy industry and transport by unifying the critical actors needed to influence and enable industry transformation at speed and scale. It’s an alliance of climate leaders focused on supercharging efforts to decarbonize some of the world’s highest emitting industries in the next 10 years.
Companies in the partnership are working to agree on a net-zero vision and pathway for each sector and commit to action. They will then work with their sectors’ most important investors, customers, and energy and fuel providers. The aim is to drive rapid climate-alignment among financial institutions, increase green procurement among major corporate customers and buyer groups and demonstrate to fuel suppliers the enormous potential demand for cleaner fuels.
Initial funders in the MPP include the Bezos Earth Fund, Bloomberg Philanthropies, and Breakthrough Energy – founded by Bill Gates. Just this week Gates has spoken about the importance of tackling the challenge of decarbonizing heavy industry in his new book, entitled How to Avoid a Climate Disaster.
Major industry players like ArcelorMittal, Nippon Steel and Tata Steel, are already involved. They are transforming the industry through innovation, like using hydrogen to power electric arc furnaces. Through the partnership, they will continue and scale up collaboration along with Responsible Steel and others, to ensure we get there as fast as possible. In aviation, there is already a community of over 60 companies across the sector collaborating – from airplane makers such as Airbus, to airlines including KLM, airports like Heathrow and fuel providers including Shell.
Increasing demand signals will be essential - as this has huge power to shift the market. We have seen this with programs like RE100 or EV100 where companies have committed to switch to 100% renewable power or electric vehicles. To date, RE100 members represent renewable power demand equivalent to Australia.
At the UN climate summit in November (COP26), MPP aims to announce that the shipping, aviation and steel sectors have defined net-zero sector roadmaps along with public commitments from the key stakeholders required to achieve them.
Global sectors require global approaches and collaboration on a scale rarely seen before. We need to bring together the critical players to work across national borders and complement country specific policy.
We are running out of time to develop, test and deploy the solutions for decarbonized materials and heavy transport. We urge companies to get involved – since achieving our collective vision will give the boost needed in the race to a net-zero future.