Ned Berry, an environmental analyst at MCA Consultants, makes the business case for carbon neutrality.
July 2019 was the warmest month ever recorded on Planet Earth, with the average global temperature rising by nearly 2 degrees Celsius since 1880. The warming climate is having a cascade of complex aﬀects on weather systems and natural environments with increasing frequencies of droughts, floods, heatwaves, hurricanes and storms and the data we have been able to capture with developing technologies is compelling.
In 2017 the International Panel on Climate Change (IPCC) concluded that the damage costs of global warming are significant and likely to increase over time. In 2019, wildfires ravaged Australia burning over 13m hectares of the land and in 2018, $16.5bn was lost in damage as the Camp Fire tore through California. The global cost of flood damage is hard to quantify and is rising each year along with the accompanying fatalities.
The IPCC further predicts that the frequency and severity of these events is likely to increase, driven by anthropogenesis and global warming, creating serious and complicated logistical problems for governments and businesses. After 30 years of global conferences, agreements, treaties and commitments, the need for a significant infrastructure overhaul of the carbon economy remains.
On May 1 2019 the United Kingdom became the first bipartisan government to declare a state of ‘climate emergency’ and since then, governments around the world, covering 820m citizens, have followed suit, marking a turning point in the attitude toward climate change. This shift to a more urgent rhetoric comes nearly three decades after 154 nations signed the United Nations Framework Convention on Climate Change (UNFCCC) in 1992.
By 1997, the Kyoto Protocol to the UNFCCC had been agreed and signed, binding 192 parties in the first treaty of its kind: a mandate to reduce GHG emissions, country-by-country, on a global scale although India and China were exempt at the time.
Following the the Doha Agreement, the 2015 Paris Amendment aims to unify the world in an eﬀort to reduce global warming, unlike many environmental treaties it uses a ‘bottom-up’ structure where parties set their own ‘nationally determined contributions’ and report emissions using a defined framework.
However, the apparent alignment of global incentive is itself not enough it is up to business to take advantage of this consensus and build models that reflect the ambition of the global community. The trends of investment in renewables, especially in solar power, are skewed toward developing countries (UNEP, 2018), who are taking the opportunity to build an infrastructure based on clean energy.
These emerging economies may become the models for future energy generation with China leading the way investing $126.6bn in renewable energy in 2017 alone. The Wudongde Hydropower Project, currently under construction in Eastern China, will have an annual output capacity of 38.93bn kWh, saving 12.2m tonnes of coal and oﬀsetting 30.5m tonnes of carbon emissions each year.
The renewable energy sector is drawing increasing attention from stakeholders, attracted not only by a cheaper, cleaner alternative but by the opportunity to invest in a more resilient energy sector. A buoyant and growing renewables market is an attractive proposition and committing to reducing emissions is the simplest way to invest.
Carbon neutrality is an increasingly achievable target for businesses in 2020. Many companies are already taking a stronger environmental stance, keen to get ahead in the race to decarbonise. Microsoft has been 100% carbon neutral since 2012, and has pledged to be carbon negative by 2030. Even in the carbon-heavy sector of transportation there are big players committing to reductions; UPS aims to reduce its emissions by 12% by 2025 and has been involved in large carbon oﬀsetting schemes through its Global Forestry Initiative.
International regulation and an undercurrent of increasing public awareness means demand has never been higher for alternatives, and businesses that can satisfy that demand will improve their public status, reduce their costs and provide long-term resilience in a rapidly changing environment. The onus is on businesses to take that first step toward decarbonisation by re-evaluating their carbon model, it may be that one of the legacies of this year is that is has allowed the breathing space to start.