[#20] Net-Zero 2050: Skeptics, Scoffers and the Silent

Stated ambitions of ‘net-zero 2050’ — the elimination[1] of climate warning emissions by that year — feel ubiquitous. Countries, corporations, investors, NGOs and inter-governmental agencies all embrace this noble target. Aspirations are not action, of course. But we now have a scientifically credible, quantified link between maintaining planetary conditions amenable to a civilization and our emissions. And that link — ‘net-zero 2050’ — is codified in popular culture and corporate boardrooms alike.

Doubts as to its plausibility (or even relevance) take three forms.

At one end of the spectrum, a healthy skepticism argues the goal — while worthy — is so hard it’s likely out of reach. I count myself in this group. We’ve waited too long, the cuts are too deep. The only historical example of annual reductions on the order of what’s needed — every year for the next two decades — is the temporary drop from the Soviet Union’s collapse. That’s not how we want to do this. Covid’s disruptions dropped emissions maybe 2%, and those bounced back. The sheer materiel[2] and capital[3] required is … substantial.

Twenty five years to eliminate fossil fuels could be achieved were we on a global ‘climate war’ footing — by gosh, that’s a good idea! — but culture wars and energy incumbents won’t let that happen. But it’s a goal worth fighting for. As North Star to guide climate ambitions ‘net zero’ is more galvanizing meme than real target.

At the other end, some — led by the likes of Bjorn Lomborg and the GOP — scoff at the need for such a goal. Not only is it unrealistic, they argue, but irrelevant and even dangerous. Fossil fuels are too useful and renewables too unreliable to bother trying. And were climate risk an existential threat, fossil fuels make us stronger and better able to deal with the storms. While annoying, this position is not interesting. It’s the same, tired climate denialism in new garb. Some folks need dragging into the 21st century.

A middling skepticism is to be Silent. A recent energy conference in Alberta starts with an IEA analysis of oil demand: under any scenario it peaks around 2030, then drops. How fast the drop-off depends on lots of things, like EV adoption and climate policy, but even today’s lukewarm measures bend it down. More aggressive climate policy, climate-tech competition or capital flight from high-carbon assets: all steepen the downward slope.

Furrowed brows and nodding heads throughout the Calgary ballroom confirm these energy executives take climate risk seriously. There is talk of emission cuts from their own stacks (Scope 1) — as long as the public purse pays the bill — but no mention of what comes from their customers’ tailpipes (Scope 3). It’s like the IEA’s prediction of a collapse in demand never happened. In this room, the implications of net-zero — that fossil fuel producers must go out of business — are politely ignored. Scope 3 is Bruno. Net-zero skepticism becomes a virtue signal of grown-up pragmatism: those whose job it is to sustain our energy needs can’t indulge such fantasies.

I get it. No-one likes to face the end of something good, and no executive wants to contemplate winding down a still-profitable business. And it’s clearly in their self-interest to sell and burn as much as possible before the inevitable end. It’s like musical chairs: the music still plays, so don’t mess with the DJ. The implication is many in the industry are not partners in net zero so much as targets to be forced out of business. While jaded, this isn’t a new or subtle view.

Yet, this confuses a healthy skepticism of net zero with the implication there’s little for them to worry about. Missing that audacious target is independent of the risk to the status quo.

Business leaders understand a probabilistic approach to risk. Let’s put a probability on reaching net zero by 2050. I’ve agreed its negligible, but not zero. Now: lower the target to a meagre ‘net fifty by 2050’. I think it almost inevitable we halve emissions by then — regardless of policy and culture wars over climate. No-one stops a technology[4] genie once out of the bottle. Cost curves dive down, performance curves drive up. Already we see an onslaught of EVs, relentless cost reductions of renewables, multiple energy storage pathways, and an acceleration of energy transition capital. To a skeptic, the odds of ‘net fifty by 2050’ may be a coin toss. But it surely isn’t negligible.

And there’s the rub. Alberta sits on some of the highest-cost, high-carbon oil on the planet. Saudi Arabia does not. We’re the marginal producers, they’re not. If we come anywhere close to net zero Canadian energy incumbents won’t survive. Burn what you can while you can, I suppose — but survival requires a new business model. That’s surely worth a discussion. But nada. Not in this Calgary ballroom, at least.

Whether interpreted as achievable target, guiding principle or threat to the status quo: net zero 2050 is this century’s core challenge. Skepticism is helpful insomuch as it might embolden us, identify bottlenecks and accelerate regulatory change. But make no mistake: failure to limit climate risk will bring our civilization to its knees, and mitigating that risk means the end of incumbent energy systems in the coming decades. It’s a stark choice. If this seems hyperbole, I’d recommend the detailed analyses of such environmental extremists as the World Bank, Deloitte and the Institute and Faculty of Actuaries.

[1] A debate over the word ‘net’ — can an entity keep emitting but offset equivalent emissions elsewhere? — while important, is a rounding error on the foundational goal.

[2] See my Munk Debate on the subject with the good Simon Michaud —

[3] Recent analyses indicate ~$300 trillion of capital is required over the next couple of decades.

[4] See my (and Mike Andrade’s) Globe and Mail op-ed on technology-driven changes to the energy system .