Q&A with Chris Stark, CEO of the Carbon Trust: How an incoming UK government can boost prosperity and reduce emissions

Welcome back to the Net Zero Roundup from the Carbon Trust’s Net Zero Intelligence Unit.??

In a year of elections around the world, we’ll be sitting down with the Carbon Trust’s new Chief Executive to discuss what each election could mean for Net Zero. This month’s Net Zero Roundup features an excerpt from the first discussion in our series, looking at how the UK can regain its climate leadership while ensuring economic prosperity.?

We also provide our usual quick intelligence on key Net Zero developments and share a parting thought on the Net Zero transition in action.??

?? Business: How agri-food companies can prepare for tightening deforestation rules?

?? Finance: Negotiators kick the can down the road on a new global climate finance target??

?? Parting thought: Have emissions already peaked in China??

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Under the spotlight

Chris Stark: The UK needs an industrial strategy to reap the benefits of the Net Zero transition.

Following the announcement of a snap general election in the UK, the Net Zero Intelligence Unit interviewed the Carbon Trust’s new CEO to ask what his priorities would be for the next government. Here’s an excerpt:?

Something is happening in China right now that is utterly remarkable. China is rolling out low carbon energy sources at a scale that is utterly astonishing. I don't think China is doing that through philanthropy; they’re doing that because that's the future for the global economy. Why do I say this? The number one priority for this election in the UK, and indeed for all the other places around the world that will have elections this year, is the need to be conscious that the Net Zero transition is no longer really a climate concern. This is actually about the future of the global economy.?

Where we are seeing these remarkable shifts happening, let’s be part of it, and make that more fundamentally part of the economic strategy for this country. I think we need an industrial strategy in the UK, to allow industries to feel confident enough to grow. It's tempting to jump to hydrogen or carbon capture or steel. But I don't think that's as important as saying we need to be bolder in a handful of areas to develop high value jobs, hanging off strong policies.??

The policies that we developed in this country, supported by the work the Carbon Trust has been doing on offshore wind, have pointed to a way to cut the cost of a key technology that other countries around the world can now deploy. That is real leadership. We need more world-leading things like that. That, to me, is not so much a climate strategy so much as a straightforward economic manifesto, because that's where the productivity improvements will come for the UK economy in the future.?

If you look at our record in the UK in decarbonizing, particularly the power sector, it’s better than any other G20 economy. But when you look forward, the gap is yawning in areas like transport and buildings. The government can shape the transition ahead, but it will be the private sector that leads that transition. What I'd like to see now is actually less focus on Net Zero and more focus on the underlying priorities for key industries. Then we can allow the private sector into the question of how you do that well, and cheaply, and in a way that develops the jobs that we need in this country.?

Watch the full interview for more of Chris’ thoughts on what elections in the UK and around the world mean for the climate, as well as the Carbon Trust’s evolving role in the Net Zero transition. You can also read a transcript of the conversation on the Carbon Trust website.

Quick intelligence

Business: Agri-food companies should not let perfect be the enemy of good when it comes to reporting deforestation?

Food and agriculture businesses are struggling to keep up with rising expectations for reporting and eliminating links to deforestation. In order to tackle the 11% of global emissions coming from deforestation, legislation such as the EU’s Deforestation Regulation, and voluntary standards including those from the Science Based Targets Initiative, are moving towards a significant increase in transparency and traceability for agricultural supply chains. Our experience of working directly with the sector, corroborated by recent evidence from CDP, reveals that many businesses currently lack the high-quality data to comply, though deadlines for compliance start as early as 2024.?

As a first step, the Carbon Trust recommends that companies undertake a hotspot analysis to identify their exposure to deforestation. This entails assessing the prevalence of land use change in different parts of the world and in different commodity supply chains, and where these overlap with a company’s business locations, product range, and the location of its main suppliers. From there, companies can generate geographic information system (GIS) data, verify this with suppliers and begin work with land owners to resolve issues relating to land-use change.??

Written by John Kazer , Senior Consultant at the Carbon Trust, specialising in food and agriculture.

Finance: Negotiators kick the can down the road on a new global climate finance target

The Bonn Climate Conference failed to move the dial on a new climate finance target to be agreed before COP29. In the absence of any consensus on the New Collective Quantified Goal (NCQG), the conference ended with an informal document comprising significantly differing viewpoints on how much money should be provided, which countries should contribute and in what form (including grants or loans).?

A new approach to climate finance is urgently required, as the current system is not fit for purpose. Firstly, current financing flows are not enough. Developed nations finally reached their target to send $100 billion a year to developing countries in 2022, two years behind schedule, but the UN now estimates that upwards of $2.4 trillion per year is needed to deliver a rapid, just and equitable Net Zero transition.??

Secondly, around 54% of direct funding in the $100bn was paid in the form of loans at market rates, or included conditions that channel money back to developed nations. As a result, the current system is not allowing developing countries to cut emissions or adapt to climate change quickly enough, and ignores broader structural challenges, such as climate-vulnerable countries facing a high external debt burden.??

The Carbon Trust advocates for impactful climate finance. Our work with local commercial banks shows that helping businesses, especially SMEs, secure necessary investments for mitigation options, such as energy efficiency projects, is challenging due to banks' perceptions of high risk, leading to high interest rates and collateral demands. To overcome these barriers, the NCQG should include a higher requirement for concessional finance to support the implementation of quality projects and to help mobilise private finance.?

Written by Rosanna J. , Sabrina Kleissl and Lindsey Hibberd , experts in climate policy and finance at the Carbon Trust.

From the Net Zero Intelligence Unit

Catch up on the latest publications from the Net Zero Intelligence Unit:??

??? Can the aviation industry ever reach Net Zero? Are we on the brink of a green steel revolution? In our final episode of our podcast series on innovation, we explore how emerging solutions can help to address the hardest to decarbonise challenges, with Faustine Delasalle, CEO of Mission Possible Partnership, Rob Trezona, Co-founder of Kiko Ventures and Ross Bruton, Head of Ventures at the Carbon Trust ?????

?? Learn how your business can draw the links between nature and climate by exploring our new guide on the recommendations from Taskforce on Nature-related Finance Disclosure, in collaboration with the World Business Council for Sustainable Development’s The Climate Drive.????

?What’s holding businesses back on their journey to Net Zero? We surveyed 400 companies around the world to find out and shared our top tips for overcoming the most prominent barriers. Read the report in English, German or Spanish. ??

???To stay up to date with news and events from the Carbon Trust more broadly, click here to sign up to the Carbon Trust’s email newsletter. ???

Parting thought?

Have China’s emissions peaked?

Thanks in large part to China, the world now invests almost twice as much on clean energy as it does on fossil fuels. And China’s lightning-quick deployment of renewable energy technologies has allowed the country to break a 14-month trend of rising emissions.?

Currently the world’s largest emitter, China’s emissions peaking would be a huge step forward for Net Zero. The coming months will confirm whether the recent dip was indeed part of a sustained decline in emissions, but there are promising indicators. Recent analysis indicates that demand for fossil fuels in China has already peaked in industry, buildings and (most recently) electricity, with a peak in transport emissions expected in the near future.?

Thanks for reading. This edition of the Net Zero Roundup was edited by Chloe St George , with contributions from across the Carbon Trust. To ensure you don’t miss out on future monthly Net Zero Roundups, click subscribe.