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Net-zero pledges reveal Global South-North divide in climate commitments: research

14 June 2022 Max Tingyao Lin

While the number of net-zero pledges from countries, regions, cities, and companies have continued to rise in recent quarters, data from Net Zero Tracker (NZT) reveals a divide between the Global South and North in climate commitments.

In its Stocktake 2022 report, NZT said 128 countries and self-governing territories responsible for 83% of global GHG emissions have committed to some form of net-zero target as of June 2022, compared with 124 such entities representing 61% of emissions in December 2020.

The remaining uncommitted countries tend to be small, low-income nations in Africa, Latin America, and the Middle East, often collectively referred to as the Global South. The Global North refers to developed countries that are mostly in the northern hemisphere.

NZT, a project developed by nonprofits Data-Driven EnviroLab, the Energy & Climate Intelligence Unit, NewClimate Institute, and the University of Oxford's Oxford Net Zero, aims to track the climate pledges from all signatory countries to the UN Framework Convention on Climate Change, select self-governing territories, and non-state actors.

A country's development level can often determine its climate commitment even though the number of net-zero promises from mid- and low-income nations have increased in recent years, said Takeshi Kuramochi, a policy researcher at NewClimate Institute.

"For countries where both the population and the economy are growing rapidly while having limited resources to address greenhouse gas emissions, it is not surprising that they are more hesitant to pledge to net-zero emissions by a certain future year," Kuramochi told Net-Zero Business Daily by S&P Global Commodity Insights.

With less access to finance, observers say less developed countries are at a disadvantage in carrying out decarbonization projects and building capacity to counter climate change.

At the UN COP15 climate summit in 2009, wealthy nations committed to jointly delivering $100 billion in climate finance per year to emerging economies.

But the amount of support reached just $79.6 billion in 2019 and is only expected to cross the $100-billion threshold in 2023, the Organisation for Economic Co-operation and Development (OECD) estimated.

The LDC Group, a bloc of 46 of the poorest and most vulnerable countries, renewed its call for more funds from developed countries to mitigate and adapt to climate change impacts at the 5 June opening of the Bonn Climate Change Conference.

"Countries with much greater responsibility and capabilities than ours must close the funding gap so that when the impacts of climate change hit—when houses and hospitals are washed away, when crops are destroyed, when islands sink, and when whole communities are displaced—the costs don't land on the already vulnerable households," LDC Chair Madeleine Diouf Sarr said as climate negotiators met for the first time since COP26.

Sub-national divide

At the sub-national level, NZT tracks all states and regions in the 25 countries with the biggest emissions totals and found the number of those authorities committing to net-zero has risen to 115 from 73 in December 2020.

The project, which also follows all cities with a population above 500,000, estimates the number of net-zero cities has increased to 235 from 115 in the same timespan.

With their financial resources and lower share of heavy industry that emits large amounts of GHGs, analysts said cities can often be better positioned to embark on a low-carbon transition than other parts of the society.

"Cities have long played a role in leadership within and beyond national borders," said Paul McConnell, an executive director for energy and climate at S&P Global 14 June, adding that a low-carbon city can attract more people and businesses.

But more than 80% of the state and regional governments and over 60% of the city governments with net-zero promises are in high-income countries. Among the 1,177 cities in the NZT database, 160 of the 322 cities in OECD countries have committed to net-zero emissions, while 75 of the 855 cities in non-OECD countries have done the same.

"Global North has set the majority of sub-national targets, however, net-zero has not yet spread widely beyond high-income countries in North America, Europe, and Asia," the stocktaking report said.

In a statement accompanying the publication of the report earlier this week, Data-Driven EnviroLab Director Angel Hsu said there is a "concerning divide between the Global South and Global North on net-zero."

"The Global North must recommit to delivering the climate finance and capacity building required for the Global South countries to strengthen their net-zero commitments," at COP27 in November, Hsu added.

Corporate pledges lack robustness

Tracking all companies on the Forbes Global 2000 list, NTZ also finds 702 of the 2,000 largest public firms have made net-zero commitments as of this month, versus 417 in December 2020.

Of the 702 net-zero companies, 210 are headquartered in the US, 89 in Japan, 57 in the UK, 40 in France, and 33 in Germany. Just 11 of the 265 Chinese companies on the list have committed to net-zero so far.

"Wealthy nations can … take more action on major emitting companies that are headquartered there but operating globally and generating significant emissions in developing countries," Kuramochi said. "A significant portion of emissions in developing countries can be attributed to consumption in wealthy nations."

The report was critical of the pledges' quality in general. While some scientists have called for a halving of GHG emissions by 2030 to avoid climate catastrophe, about 50% of the 702 companies with net-zero commitments have yet to set any interim targets.

Just 38% of the companies have included emissions across their value chains (Scope 3) in their pledges.

"We're seeing a proliferation of companies setting superficial targets due to growing peer pressure. This trend at least puts more firms on an escalator towards integrity, but until their targets improve to reflect the urgency of the climate emergency, they leave themselves wide open to criticism," Oxford Net Zero Executive Director Steve Smith said in the statement.

Amid widespread greenwashing concerns, an increasing number of public-sector and private-sector players have sought to enhance the scrutiny over non-state entities' climate pledges.

The UN's Race to Zero network and High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities are expected to publish new, separate net-zero standards for companies this year.

Climate Action 100+, an investors' initiative that has about 700 signatories with $68 trillion in assets under management, regularly publishes benchmark assessments for corporate net-zero pledges based on its criteria. Voluntary Carbon Markets Integrity Initiative focuses on how businesses use carbon offsets to meet their net-zero targets.

"With the light of scrutiny bringing greater clarity to net-zero … it's becoming much easier for everyone—from regulators, to customers, investors, and employees—to see who has made a public commitment, and how robust that commitment looks," Smith said.

Posted 14 June 2022 by Max Tingyao Lin, Principal Journalist, Climate and Sustainability



This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.

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