Zero Carbon Futures: What now, what next? – Reflections from the Crowd event

Verco was proud to sponsor the Crowd’s well timed event on Zero Carbon Futures last month. A lot has happened since then- The House of Commons has approved legislation for net zero carbon emissions by 2050 and Teresa May has used this as a platform to encourage others to follow our lead at the G20 Summit, highlighting the need for a five-fold increase on existing 2030 commitments if we are to remain below 1.5 degrees of warming.

All of this was discussed and hoped for but far from certain when the Crowd convened to discuss this critical topic on the 10th June.

The event was opened by Joe Anderson, Mayor of Liverpool citing an impressive list of environmental and social initiatives and a target for Liverpool to become a carbon positive city enabled by Blockchain technology. He also highlighted the disconnect between the ‘climate emergency’ rhetoric and funding at a local level.

Samantha Smith, Director of the Just Transition Centre then went on to describe the extent of the climate and social emergency that we face if we cannot create sufficient numbers of decent jobs and develop economic plans which use the zero carbon transition as an opportunity to revitalise communities.

Lord Deben closed the first session of the evening with a rousing call to action, using the recent report by the Committee on Climate Change as evidence that we can get to zero carbon at a price which is affordable and sufficiently fast to stop climate change. He made it clear however that this cannot be delivered by the market alone and pointed to the UK’s offshore wind industry as a successful example of government intervention delivering both environmental and economic outcomes.

As part of the panel session that closed the night, I was asked to provide a broad view of the implications of net zero for business to complement the industry specific thoughts from BT, Heathrow Airport and Nuveen. The following is an edited version of my response to the questions on the night:

Q: There are multiple terms out there: zero carbon, net-zero, carbon neutrality etc. What is zero carbon? Can you define it for us?

The beauty of terms such as zero carbon and net zero are their simplicity when compared with alternatives such as Science Based Targets and temperature goals like 1.5 degrees and ‘well below 2 degrees’.

Zero really means zero so any sources of carbon emissions need to be balanced out by carbon sinks. This is currently calculated on an annual basis although worth nothing that carbon accounting will get more granular in the future with the emergence of real-time grid carbon factors.

When I say carbon emissions, this is shorthand for all Greenhouse Gases. Carbon emissions from the burning of fossil fuels in the most important accounting for around 70% of GHG emissions globally, but other gases such as methane from gas distribution and ruminant livestock and Nitrous Oxide from agricultural fertilizers are important too so need to be converted into CO2 equivalent.

There are lots of devils in the detail when looking at what zero carbon means at the level of an individual company but most of that complexity is to do with defining boundaries of responsibility and the concept of offsetting. A lot of this complexity falls away when you take the view that we ultimately need to achieve net zero at a global level by 2050 so any offsetting at a country or company level, just shifts the burden elsewhere.

Contracts for the direct purchase of renewable electricity or gas are a pragmatic interim step where they enable new capacity to come forward but true additionality can be hard to prove in practice and this approach will become increasingly unnecessary as the power sector as a whole approaches zero carbon. Helpfully, net zero by 2050 is broadly aligned with the 1.5oC target so both can be deemed ‘Paris Compliant’.

Bearing all this in mind, I think the Committee on Climate Change were right to recommend a net zero target including emissions from both shipping and aviation and excluding offsetting as an option, unlike Sweden and Norway. It seems the latter was a step too far for the Government with the passed legislation retaining the ability to use international carbon credits “within an appropriate monitoring, reporting and verification framework”. The UK can still claim leadership in setting a legally binding net zero emissions target however with a comprehensive definition and scope, even if others have set more ambitious timescales.

Q2: What are the three big levers that your industry / the economy will have to make to achieve this goal by 2050?

1. Maintain cross-party consensus

2. Set appropriate sector-specific targets

3. Bring forward the necessary enabling infrastructure

Achieving and maintaining a cross-party consensus was a critical success factor in the passing of the Climate Change Act in 2008 and is even more important now, given the greater urgency to act and implement the wide range of new legislation that the transition to net zero will require.

At Verco, we are big fans of an approach developed by the Dutch Green Building Council which works out the total contribution that renewable energy can make in a particular country and then apportions the remaining emissions out to different sectors of the economy as efficiency targets. This takes the existing carbon budgeting process a step further and if done properly, should result in the most equitable outcome for all.

Our current infrastructure sets a high bar for reliability and ease of use – people love their gas boilers and petrol cars. Two things are required if we are to generate sufficient consumer confidence to make the shift to lower carbon options; polices and public investment that bring forward the enabling infrastructure and the development of outcome-based technology neutral service models e.g. heat-as-a-service. If Government can deliver the infrastructure then the service models will quickly follow.

Q: Its 2050. We’ve failed. Climate change is having severe consequences across the globe. The physical and transition risks businesses had identified in 2019 have been realised. The goals of the Paris Agreement remain unachieved. I’m asking you to do a pre-mortem, sitting in 2019. What prevented us building a net-zero emissions economy?

Worryingly this was all too easy a question to answer and I offered the following possible causes of environmental collapse:

• Trump’s second term in office saw the USA pile into the ice-free Artic creating a new 3 million barrel per day oil frontier.

• In 2027, state-sponsored hackers immobilise 10m autonomous vehicles, 30m fridges and 20m heat pumps resulting in chaos on the roads, an 8 year ban on driverless cars and a slump in sales of IoT devices crippling the demand response market leading to more central gas generation.

Q: What is one thing that you see today that gives you hope that the transition to a zero-carbon is underway?

Large businesses with considerable influence setting zero carbon targets and sensible interim milestones based on a robust evidence base of cost effective measures.

A good example from our client base is Arla Foods who have recently set a 30% reduction target by 2030 and are working towards net zero by 2050. We helped them deliver a zero carbon dairy in Aylesbury which was the largest fresh milk dairy in the world at the time and achieved a zero carbon target by maximizing on-site efficiently and then developing an anaerobic digestion project taking organic waste from the farms and retail customers to generate enough energy to run the dairy and provide fertilizer back to the farms.