COP 29: Achieving Net-Zero - Unpacking the Pieces

Article published in the Global Smart Energy Forum October-November 2024 Newsletter.

The recently concluded COP29 in Baku, Azerbaijan continues to struggle for a consensus. Dating back to COP26 the financial support mechanisms and increasing transparency have clearly stalled. National governments appear sluggish to achieve stated decarbonization targets. While the aspirational goals are clear, the pathway is not. This article unpacks the various pieces.

?Net Zero means “we retrieve all the carbon emissions we put out” (personal, public, business, industry). This can be achieved by (1) using clean energy (renewables); (2) consuming less (conservation); (3) growing trees (carbon offset); (4) purchasing market offset credits (financial offset); and (5) storing CO2 (carbon capture). In most cases it would be all of the above. The economic feasibility and technical mechanisms are far from any consensus, as evidenced by the following:

?Economic impact, affordability and market mechanisms (assuming technically feasible) continue to raise several questions:

?1.????? Financial Reconciliation: Global fossil energy assets are US$ 2.5 trillion (3% of global GDP of US$ 84 trillion). Total new clean investments are projected at US$ 1.0 trillion (1.2% global GDP). Government “unproductive” debt globally stands at US$ 15 trillion (17% global GDP). Developed nations have not made their US$ 100 billion annual contributions. How can these be reconciled?

?2.????? Stranded fossil assets: Repurposing fossil assets is very limited. Many governments also indirectly own fossil energy assets. Given this, what is the transition strategy? Also, what would be a “just” transition for the labour markets and reskilling?

?3.????? Affordable carbon pricing: Estimates project carbon levies (currently US$18-35/ton) rising to $100/ton by 2030. However, large emitters count on falling levies (down to $60/ton) post 2030. Is there a compromise here without risking price inflation?

?4.????? Net Zero does not mean zero carbon fuel, rather less consumption: A carbon market must offer choices for “net” emissions offset (avoid, reduce, offset). Removal costs are not linear (last 10% removal is more expensive than first 10%). Can such markets operate globally?

?5.????? Mandated technology switching: High carbon levies will not reduce consumption in transport and shipping. In such cases, alternative technologies (EV, hydrogen) must be mandated.

?Technical solutions towards efficacy and permanence to sustain net-zero beyond 2050 raise several questions:

?1.????? Source emissions sequestration is best: Large emissions at source (>10,000 ppm) offer efficient capture as opposed to a more diluted form after release (400 ppm) at the tail-end.

?2.????? Additional atmospheric CO2 removal is needed: To limit temperature rise to within 1.5 deg C, direct-air capture (DAC) is needed to remove past CO2 accumulation. However, this method should not become “business as usual” for large emitters (their emphasis must be greener production methods and source capture). DACs could be effective in reducing urban pollution.

?3.????? All carbon sequestrations are not equal: Terrestrial, biosphere and geosphere sequestration are not equally effective. Trees and soil return CO2 back. Geosphere store is more permanent, and large emitters must be mandated to 50% sequestration (rising to 100%).

?4.????? All carbon credits are not the same: Carbon-avoidance offset credits (growing trees) is not zero sum (one emits, the other does not, so net carbon increase), whereas carbon-removal offset credit is carbon neutral (one emits and the other removes). Clear and prescribed distinction is needed.

?All this is alphabet-soup even for the best of minds. At a global level this becomes even more challenging given varying levels of affordability and enforcement. I am a believer in climate change; however, I have several viewpoints that (I believe) have not been explored. These are focused closer to the community side and their implementation:

?1.????? Consumer’s net-zero effort: Can supply-chain (goods/fuel) be net-zero (or ‘carbon negative’) at source, to compensate for its retail use? This will alleviate complex retail net-zero effort. Will the retail carbon levy be purely financial (tax) or other metered methods?

?2.????? Tally mechanism: How will the tally mechanism and enforcement work for a geographical area (community, city, state/province, country) given unequal clean resources and inability to remove/offset effectively (location, affordability)?

?3.????? Legislation should precede Regulation: Base-line legislation makes for transparent regulation. Green-leaning policies cannot be effectively regulated (cost/benefit may still point to fossil fuels).?

?4.????? Hydrogen Roadmap requires clarity: Today, hydrogen is a feedstock not a global fuel commodity. Being light gas, its transportation cost is high (unless liquified). So, its production at demand-hubs appears best strategy. Is grey hydrogen transitioning to blue hydrogen and then to green hydrogen, a good start to boost large scale hydrogen production?

?5.????? Defining roles for T&D utilities: T&D utilities can enable clean energy transition, particularly in managing distributed renewables. High penetration of renewables is essential for low-cost EV charging and low cost distributed green hydrogen production.

?6.????? Redefining mobility roadmap: EV charging (using low cost RE) will compete with distributed green hydrogen production. Will BEVs and charging infrastructure become a medium-term play only ultimately giving way to hydrogen vehicles?

?There are many things that need to be worked out, otherwise our transition to Net Zero 2050 will be delayed. Local communities and public implementation must be the focus of all such discussions.