Irish Business & Climate Change Race to Zero & COP26
12th March, 2021
Net Zero Emissions
Five years after the adoption of the United Nations (UN) Paris Agreement on Climate Change, the world is heading for a 3°C rise in global temperature by 2050. The science is clear – to avoid the most catastrophic impacts of climate change, we must limit global warming to 1.5°Celsius (C). To achieve this, global Greenhouse Gas (GHG) emissions must be reduced to 55% of 2010 levels by 2030, reaching net zero by 2050. Net zero is when manmade GHG emissions to the atmosphere are balanced by natural and/or artificial removals. A simple analogy is to think of the climate like a bathtub that’s filling up with water. To stop temperatures rising, we have to turn off the tap entirely and get to net zero emissions.
Failure to meet net zero will result in stranded assets, a dire future for the next generations and widening inequalities. By 2050, climate change could cost the world economy $7.9 trillion as increased storms, wildfires, drought, flooding and crop failures hamper growth and threaten infrastructure. By comparison, the cost to tackle climate change is much cheaper at only 1.5% of global GDP, or approximately $1.5-2 trillion a year for the next 30 years. Now is the time for governments and business to align on a well-managed, low-carbon transition. Governments, society and businesses tackling climate change are zooming in on one target – net zero emissions by 2050.
Businesses, large and small, across all sectors of the economy are under increasing pressure to be part of the solution, not the problem, on climate change. Large GHG emitting sectors like power generation, transport (vehicles, aviation, shipping), agriculture and the built environment are the hardest to abate. Eight supply chains – food, construction, fashion, fast-moving consumer goods, electronics, automotive, professional services and freight – account for over 50% of global GHG emissions. So many of the solutions lie with business. Companies can tackle climate change through decarbonising their direct operations and supply chains. While there are challenges, there are many innovations and new market opportunities from a climate resilient world.
The next big climate change milestone is the UN COP26 summit in November 2021 in Glasgow, where 187 countries have signed up to the UN Paris Agreement on Climate Change and will meet to assess distance to target. Governments alone cannot achieve net zero emissions by 2050, so the role of business is key at COP26. The Race to Zero global campaign at COP26 aims to rally leadership and support from businesses, investors and other non-government actors for a healthy and zero carbon recovery.
Key takeaways and next steps
- The pressure for business to be part of the solution, and not the problem, on climate change is at an all-time high. Regulators, customers, shareholders and civil society are all demanding credible GHG emissions targets and action across operations and value chains.
- Investors in particular are becoming among the most demanding voices as they are focused on avoiding risk from stranded assets and maximising returns from the low-carbon and green economy.
- The good news is that the science and many of the solutions we need are available. Those still needed are an innovation and market opportunity. We just need to move faster.
- For business not yet on board, the COP26 Race to Zero campaign provides an opportunity to engage meaningfully with a range of credible net zero initiatives that are verifiable and supporting a 1.5°C scenario.
The Davy Horizons team have published a White Paper titled: Irish Business & Climate Change Race to Zero & COP 26. Ireland has made a commitment to achieve net zero emissions by 2050 and this paper looks at the role that Irish businesses, large and small must play to achieve that 1.5 °C critical pathway. Stepping up to the climate challenge will also provide significant opportunities for all businesses; though innovation, public private partnerships and new markets, as society transitions towards a low carbon future.
Download the full whitepaper now.