Options to halve all sectors’ emissions by 2030 available, cost to be steep: IPCC

The options to at least halve global GHG emissions by 2030 in all sectors are available, but the cost will be steep, according to the latest report from an Intergovernmental Panel on Climate Change (IPCC) working group on climate mitigation.

Limiting global warming will require major transitions in the energy sector in particular, said the 84 scientists, collectively known as Working Group III, who wrote the report, adding that such change will involve a substantial reduction in fossil fuel use, widespread electrification, improved energy efficiency, and use of alternative fuels such as hydrogen.

As a result, the combined value of unburned fossil fuels and stranded infrastructure could be as much as $4 trillion from 2015 through 2050 to limit global warming to about 2 degrees Celsius, and it will be higher if global warming is limited to 1.5 degrees Celsius, the report's authors said.

The authors added, that in this context, coal assets are expected to be at risk of being stranded before 2030, while oil and gas assets are projected to be more at risk of being stranded toward the middle of the century.

Such emissions cuts and efforts to make them happen have to take place immediately, a key author said. "It's now or never, if we want to limit global warming to 1.5 degrees Celsius," said IPCC Working Group III Co-Chair Jim Skea. "Without immediate and deep emissions reductions across all sectors, it will be impossible."

1.5 C target requires emissions peaking before 2025

Limiting warming to around 1.5 degrees Celsius would require global GHG emissions to peak before 2025 at the latest, and be reduced by 43% by 2030 compared with 2019; at the same time, methane would also need to be reduced by about a third by 2030, the IPCC said in a 4 April statement accompanying the report.

However, it said, "even if we do this, it is almost inevitable that we will temporarily exceed this temperature threshold but could return to below it by the end of the century."

The report says average annual global GHG emissions rose 1.3% between 2010 and 2019, compared with a 2.1% average between 2000 and 2009.

Still, the report said that in terms of total emissions, the increase over the most recent decade was the highest recorded, with the period accounting for 17% of all net CO2 emissions between 1850 and 2019.

Former executive secretary of the UN Framework Convention on Climate Change Christiana Figueres tweeted that the "report tells us we are on a suicidal path. Change or kiss stability goodbye."

While UN Secretary General António Guterres tweeted 4 April that the report documented "a litany of broken climate promises. Some government & business leaders are saying one thing, but doing another. They are lying. It is time to stop burning our planet." He added: "It is time to stop burning our planet & start investing in the abundant renewable energy all around us. New @IPCC_CH report sets out viable, financially sound options that can keep the possibility of limiting global warming to 1.5° alive."

Use of removal technologies "unavoidable"

Those options must include, the report says, carbon dioxide removal (CDR) technologies such as carbon capture, utilization and storage (CCUS) or direct air capture (DAC). The deployment of CDRs to counterbalance hard-to-abate residual emissions is "unavoidable" if net-zero CO2 or GHG emissions are to be achieved, the authors said.

A day after the report was issued, DAC pioneer Climeworks said it had raised $650 million in equity backing. In September 2021, the Swiss firm's Orca DAC and storage facility in Iceland began operations, a plant the company says is the biggest in the world currently.

The scale and timing of deployment will depend on the trajectories of gross emission reductions in different sectors, the report authors said. Upscaling the deployment of CDR depends on developing effective approaches to address feasibility and sustainability constraints especially at large scales, they added.

Mitigation options costing $100/metric ton (mt) CO2 equivalent or less could reduce global GHG emissions by at least half the 2019 level by 2030, the authors said.

Institute for Energy Economics and Financial Analysis analyst Omar Mawji toldNet-Zero Business Daily, published by S&P Global Commodity Insights, 1 April that a C$90-$100/mt ($72.08-$80.08/mt) Canadian carbon price means CCUS makes economic sense in that country. The carbon price increased 25% to C$50/mt on 1 April and is set to rise by C$15/mt a year from 2023 and reach C$170/mt by 2030.

"We need to go all in"

The report's release found not just Guterres in combative mood, UN Environment Programme Executive Director Inger Andersen said in a 4 April statement the report "completes the full picture of the climate crisis facing humanity. And it is not a pretty picture … Half-measures won't halve greenhouse gas emissions by 2030, which is what we need to do. We need to go all in."

While US Public Interest Research Group Environment Campaigns Director Matt Casale noted 4 April in a statement: "The latest IPCC report confirms what we already know: It's time to retire and replace coal-fired power plants and oil-based transportation systems, and stop investing in methane gas infrastructure. We need to make smarter, more sustainable choices, like investing in solar panels, wind farms and electrical storage capacity. We need fewer diesel and gas-powered vehicles and more electric vehicle charging stations and electric buses."

Climate activist and US National Aeronautics and Space Administration biodiversity specialist Peter Kalmus was even blunter, tweeting: "Brief summary of the new IPCC report: We know what to do, we know how to do it, it requires taking toys away from the rich, and world leaders aren't doing it."

Some leading Western politicians agreed with him. COP26 President Alok Sharma said in a 4 April UK government statement: "The warning lights are yet again flashing bright red on the climate dashboard and it is high time for governments to sit up and act before it is too late."

And US Secretary of State Antony Blinken said in a 4 April statement that the report "makes clear what we can do to stop or slow planetary warming. The report also reveals how current global efforts to mitigate the climate crisis fall far short of what is needed." He added: "The report also tells us there is reason for hope. The IPCC found we are making some progress towards the needed reductions in carbon emissions."

Cold water, however, was thrown on that assessment by climate activist Greta Thunberg who tweeted: "When reading the new #IPCC report, keep in mind that science is cautious and this has been watered down by nations in negotiations. Many seem more focused on giving false hope to those causing the problem than telling the blunt truth that would give us a chance to act."

Opportunities

The report's recommendation that fossil fuel consumption be drastically reduced doesn't go quite as far as the International Energy Agency's heavily-cited report from last May, but a rapid move towards non-emitting fuel sources and greater electrification is an opportunity for certain sectors of the energy industry.

One trade association certainly saw the report as that. "Concluding from the new IPCC Working Group III report, 3 actions must be taken: 1. Maximize the mitigation potential of existing #nuclear reactors. 2. Enable a significant acceleration in the deployment of new NPPs. 3. Invest in the development of new nuclear technologies," the World Nuclear Association (WNA) tweeted 4 April.

A UK academic, Corentin Cadiou, a doctor of astrophysics at University College London, took issue with that assessment, arguing in the WNA thread that on the contrary, wind and solar are each four times more cost-efficient for reducing carbon footprint than nuclear, and therefore point two and three of WNA's tweet should be about renewables.

Wind advocates wouldn't disagree. Global Wind Energy Council CEO Ben Backwell told Net-Zero Business Daily: "If governments are serious about limiting global warming, then this report spells game over for fossil fuels. Drastic and sustained action is needed now to scale up the deployment of wind and renewables."

He said there are hundreds of gigawatts of "shovel-ready" wind projects in the development pipeline around the world, particularly in key G20 countries like the US, China, India, Australia, Brazil, and the UK. As a result, "in this current global energy and climate crisis, governments should introduce fast-track measures for these projects, such as streamlining permitting and prioritizing grid access. Accelerating these projects in the next one to three years will increase energy security, accelerate emissions reductions and generate billions in capital investment for a greener and more resilient economy," he said in a 4 April email.

Investors agree. Stephanie Pfeifer, CEO at the Institutional Investors Group on Climate Change, said: "The report is unequivocal in the need for scaling up climate solution technologies, including renewables. The investment gap between what is currently being allocated to such technologies and where it needs to be, must be cut rapidly; failure to do so threatens to undermine all mitigation efforts."

It isn't just wind power that can offer change, other renewable technologies must be utilized too, according to International Renewable Energy Agency (IRENA) CEO Francesco La Camera. He tweeted 4 April that the report "is a nod" to IRENA's call to "abandon" fossil fuels and accelerate growth across the global low-carbon economy in its Energy Transitions Outlook in March.

Changing habits

Changing humanity's energy consumption habits is a major focus for the report, but it also suggests change in other habits too, recommending that shifting to "balanced, sustainable healthy diets", which it termed a demand-side measure, more people cycling to work, and increasing plastics recycling could also contribute to mitigation efforts.

Reyes Tirado, a research scientist with Greenpeace Research Laboratories at the University of Exeter, noted in a statement: "Protecting forests and ecosystems, stopping deforestation and shifting to plant-based diets in high income societies are essential to achieve a safe climate. The solutions to fix the broken food systems and secure nature protection have been made evident: significant increases in finance, ensuring the rights of Indigenous Peoples and local communities, and defending food sovereignty and rural livelihoods."

The report is the third in a series from working groups for the IPCC sixth assessment report. The first two looked at the physical science basis of climate change and the impacts. After originally being scheduled for release in July 2021, the latest report's release was delayed for several months by the COVID-19 pandemic, the IPCC said.

It was an arduous journey right up until the end. One of the authors, WWF Global Lead Climate Scientist Stephanie Roe, tweeted on 3 April: "16 days, capped off with a final ~40hrs straight of line-by-line negotiation & approval. As one of the authors of the report, this moment culminates years of work." The finalization process was the longest approval plenary on record.

Posted 06 April 2022 by Keiron Greenhalgh, Senior Editor

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.