Net-zero by 2040 is common sense

Translating IPCC science into Resilience Intelligence guidance on accelerated pathways to net zero

This week, the IPCC issued its Synthesis Report for the 6th Assessment — a multi-year global process of scientific review of all available evidence regarding the state of the climate system, and our state of risk and resilience. The report provides clear evidence that to avoid spiraling climate emergency, high-emitting countries should accelerate decarbonization efforts, aiming for net zero closer to 2040 than 2050.

Specifically, the report finds that the 1.5ºC threshold is likely to be crossed before 2040. Chapter 4 states:

In the near term (2021–2040), a 1.5°C increase in the 20-year average of GSAT, relative to the average over the period 1850–1900, is very likely to occur in scenario SSP5-8.5, likely to occur in scenarios SSP2-4.5 and SSP3-7.0, and more likely than not to occur in scenarios SSP1-1.9 and SSP1-2.6.

Chapter 4 also finds that overshooting 1.5ºC will make it harder to achieve climate-resilient development, even if the overshoot is partially reversed through carbon drawdown. Chapter 4.6.2 reads, in part:

Overshoot has been found to lead to irreversible changes in thermosteric sea level (Tokarska and Zickfeld, 2015; Palter et al., 2018; Tachiiri et al., 2019), AMOC (Palter et al., 2018), ice sheets, and permafrost carbon (Sections 4.7.2 and 5.4.9) and to long-lasting effects on ocean heat (Tsutsui et al., 2006)

This means critical regulating structures within the climate system may be lost, increasing the prevalence and cost of devastating impacts, and making it harder to restore a livable climate, even if we learn to reabsorb all industrial, agricultural, and transport emissions. In other words, it is no longer credibly ‘science-based’ for the largest emitters to aim for net zero by 2050.

This is why the Secretary-General, in support of his Climate Solidarity Pact, is calling for “leaders of developed countries committing to reaching net zero as close as possible to 2040, and developing countries as close as possible to 2050.

In September 2019, we produced a Resilience Intel brief on the long-term net zero goal, and outlined the case for net zero by 2040 as the common-sense goal. A revised and updated version of that article is included below.

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Net-zero by 2040 is common sense

Global heating is happening faster and with deeper compounding impacts than we had expected. Sir David King, former chief science advisor for the government of the United Kingdom, has for years called for an upgraded long-term goal of net-zero by 2040.

Simple arithmetic shows there is not enough money in circulation to cover the extreme costs of carbon fuel subsidies and the extreme and rising costs of dealing with the harm they cause. In 2022, Deloitte released a report projecting $178 trillion in traceable global costs by 2070, if climate change is allowed to run away unchecked. Insurers are already revising policies and offerings to avoid catastrophic risk. Some have said they will not be able to provide mass-market insurance within 2 decades, some within just a few years.

As insurers pull back from critical segments of the consumer and business markets, lenders and investors will have to carry more risk to finance the same activities. This will impact cost and profitability in all areas, and put downward pressure on lending, pay, consumer confidence, and investment returns, even as everyday costs rise and conveniences are harder to reliably secure. In other words, pollution-for-profit will soon be unaffordable for every segment of society.

Since 2019, we have seen surging fossil fuel prices embed unsustainable sudden price spikes in the prices of goods and services throughout the economy. Some analyses show embedded fossil fuel costs being more of a driver of price spikes than global supply-chain disruptions linked to the COVID-19 pandemic. That extra cost is not invested in lower-cost high efficiency clean energy future technologies; instead, it funds the capital gains of major investors and petro states, leaving everyone else worse off.

Meanwhile, climate disruption costs are piling up. Every region of the world is now experiencing multiple climate-related shock events per year. Spending (and borrowing) to address these events is now many times higher than it was just two decades ago. Getting inflation, inequality, wider market volatility, and banking system vulnerabilities under control, will require a transition to more rationally priced energy systems with a more inclusive and consistent payoff.

Getting to the climate-safe clean-profit economy of the future sooner is mathematically more sound.

Investors in the public or private sector that hold onto hope that they can optimize investment returns by funding the wrong side of history will be abandoned by the marketplace, sooner than they think. Math will drive the rapid acceleration of change, as will the need to address injustice.

1. Climate disruption is harm imposed on those without the power to prevent it — in this case millions of species and most of humanity.
2. Environmental injustice is more than unfairness; it is an existential threat that puts entire populations into situations where conflict or migration are more likely.
3. With that, the strength and resilience of public institutions is at risk, as they require the confidence of everyone in order to function well and fairly.
4. In 2022, 45 countries saw part of the population facing famine, with a record number of people facing hunger globally.

In September 2019, young people, climate experts, and leaders in peace and security, came together at the Oslo Pax Summit on Peace and Climate Change, to call for urgent action to reduce these degradations. The Oslo Pax produced a clear call to action, to treat climate disruption as a threat to international peace and security and an issue of fundamental human rights.

Citizens’ Climate International is now organized around the principle that a livable future is a human right. Decisions that honor that right need to use the best available science to steer away from danger and toward a future with health, safety, and sustainable opportunity, for all.

Moving decisively to net-zero carbon emissions by 2040 will deliver:

1. Cleaner, more reliable energy, that can reach everyone affordably, and scale up without disrupting life-sustaining natural systems;
2. More secure, diversified rural economies that are better able to support climate-resilient economy-wide nutrition security;
3. A more inclusive and profitable future for the insurance, reinsurance, and banking sectors;
4. A healthier, more resilient financial sector;
5. A world less prone to involuntary displacement and conflict.

For industry, it is time to welcome smart policy options and blended finance innovations that can accelerate the depreciation of strandable assets. It is smarter to abandon assets now that we know will be stranded and invest instead in viable future operations.

Business model redesign offers transformational opportunity for even the most carbon-dependent industries:

• Major oil and gas conglomerates can increase their overall value by transitioning into networks of smaller companies specializing in key areas of the integrated distributed clean energy economy.
• Financial and data service intermediaries can organize around this right-scaled distributed network of energy system enterprises, to consolidate the clean-profit commercial opportunity.
• Smart breakthrough enterprises will deliver the connective infrastructure and end-user devices that convert data and electrons into everyday value for everyday people.

The big complication is time-lag built into existing energy, transport, and industrial systems. For instance, vehicles sold today that use internal combustion engines can be expected to operate more or less optimally for 10–15 years. For the transport sector to reach true zero emissions by 2040, full electrification of new production would have to start in the next 2–3 years.

Net zero is not, however, out of reach:

• Even if combustion vehicles are still sold as late as 2035 — if energy systems and industry, including mining operations, fully phase out fossil fuel use, and if fugitive methane is properly contained.
• Biomass is carbon. More vibrant, resilient, and biodiverse ecosystems keep carbon out of the atmosphere.
• Restoring ecological richness, in tropical and boreal forests, and also in soils and throughout the ocean, can accelerate arrival at net zero.

High-emitting countries should lead in shifting net zero targets closer to 2040 — because they can do the most to speed the transition, and because their high emissions are adding risk and cost for everyone else. That said, all nations should aim to reach net zero as soon as possible. Establishing clean development as the foundation for national prosperity will be inherently beneficial, and will eliminate pervasive future pollution costs that risk marginalizing smaller economies for generations to come.

The COP27 global climate negotiations acknowledged the need for an integrated approach to reducing vulnerability and building resilience:

• The Loss and Damage Fund Transitional Committee is tasked with supporting the best-case design of a new Fund, while expanding funding flows through existing institutions right away.
• Ongoing reform of international financial institutions, including vulnerability-sensitive sovereign debt relief, and the Summit for a Global Financial Pact, provide opportunities for realigning incentives, structures, and practices, with rapid transition to net zero.
• The mobilization of new strategies and funding for climate-resilient agriculture and food systems provide investable opportunities to link everyday economics to 2040 net zero timelines.
• Non-market multilateral cooperative arrangements under Article 6.8 of the Paris Agreement can accelerate and spread critical innovations in finance, technology, energy, and enterprise, to restore nature and secure a clean development future.

Then there is the question of structural motivational goals: 

• If we set a goal of 2050, and incentivize all of society to reach that goal, and we miss it, the accumulating climate costs will be that much more catastrophic.
• Getting to net zero that late might mean losing critical regulating structures in the climate system, which could put climate-resilient prosperity out of reach. 
• If we set a goal of 2040, and incentivize all of society to reach that goal, and we miss it, we will be far better positioned to reach net zero by 2050.

Dedicating all available resources to this higher ambition pathway to clean, climate-resilient development is the science-based, economically efficient, common-sense way forward.