This post is part of our ongoing series on climate, economics, and “green capitalism.” Read the rest of the posts here.
In March, the IPCC released a devastating summary of its forthcoming “synthesis report” on recent climate research. In addition to cataloguing the horrors expected to result on our current climate trajectory, it reiterates the only surefire way to halt these trends: “From a physical science perspective, limiting human-caused global warming to a specific level requires . . . reaching at least net zero CO2 emissions.” In other words, humans must figure out how to remove as much carbon from the atmosphere as we put into it each year.
This scientific concept of net-zero emissions has quickly become an organizing policy paradigm, enshrined in the Paris Agreement and manifested in thousands of “net-zero” pledges developed by countries, states, cities, and private companies. Collectively, these pledges now purport to cover more than 91% of the global economy. If this figure sounds too good to be true, that’s because it likely is. Already, there is evidence that many entities will fall short of their pledges. But even among those concerned about pledge integrity, the problem is usually framed as one of enforcement, best addressed via standard-setting organizations and market certification schemes that serve as a check against false promises.
Let’s assume (perhaps implausibly) that these voluntary checking mechanisms work to weed out false pledges. Even still, as I have previously argued at greater length, the challenges of this new net-zero paradigm extend far beyond pledge enforcement. Net zero is anti-democratic, inequitable, and imperial. For related reasons that I focus on in this post, it is also unlikely to work as a strategy to achieve the collective global aim of net-zero carbon emissions.
A Libertarian Leap
To start, note the curious translation that happened from scientists’ identification of the collective net-zero imperative to the prevailing net-zero model: a global target for net-zero emissions has been broken down into thousands of individualized net-zero pledges. Entities making pledges then self-determine how to meet them, potentially via internal emissions cuts, the purchase of clean energy, the addition of technologies to capture emissions, or—quite prominently—the purchase of emissions “offsets” from other entities that have demonstrably avoided emissions or generated “negative” carbon emissions. At present, these offsets mostly come from avoided emissions and forestry projects that purport to store carbon long-term in trees. In the longer term, many hope that “direct air capture” technologies will allow for cost-effective underground storage of carbon sucked directly from the atmosphere—although these technologies remain prohibitively expensive and unscaled at present.
Under the netting framework, most entities will choose the cheapest method of hitting net-zero carbon. For example, a company that emitted 10,000 tons of carbon dioxide annually might cut 1,000 tons by implementing more efficient processes that also save it money in the long term, and then buy cheap offsets from the carbon markets to ‘cover’ the remaining 9,000 tons of emissions. Even extraction-based corporations—such as Shell Oil—are getting in on the net-zero game. But to make pledges accord with future profits, these companies often ignore the emissions associated with the eventual (inevitable) burning of their products, producing plans only to net additional emissions that they cause during the production of fossil fuels.
This company-by-company netting is a deeply libertarian approach to achieving our collective imperative. To be sure, the global net-zero goal must be disaggregated somehow. In the current world order, without an empowered global body to direct emissions reductions, I think that national net-zero planning and execution makes good sense. But the current net-zero framework takes disaggregation much further, encouraging each corporate entity to manipulate its own carbon universe in the way it sees fit.
The Collective Achievement Challenge
There is a real clash between this approach to net zero and the scientific imperatives of decarbonization. In brief, the challenge is this: as the latest IPCC report highlights, we have a limited window to dramatically decrease emissions to keep planetary warming below the globally established threshold of 1.5º Celsius, or even the riskier backstop threshold of 2º Celsius. Climate models illustrate that this pace of change is possible only if every feasible emission cut that can be achieved anywhere is pursued. Carbon removal technologies—while a critical part of achieving net zero—should be reserved for counterbalancing emissions in essential industrial sectors where reducing emissions is particularly difficult or expensive. As the International Energy Agency has forcefully emphasized, that functionally means that no new fossil fuel projects—anywhere—should be pursued, and some existing fossil-fuel infrastructure likely needs to shut down before its useful life is over.
There is a gaping disconnect between these findings and the predominant strategy the world has embraced for reducing emissions. As one might expect from profit-oriented entities pursuing net-zero pledges, few if any corporate net-zero pledges include planned, voluntary obsolescence or leaving potential future profit sources untapped—instead, analysts find that offsets substitute for such internal emissions cuts. Even at the country level, few are willing to eschew the use of offsets in place of domestic emissions reductions as a core national strategy for achieving net zero. Switzerland, for example, is relying on investments in cookstoves in Ghana and Dominica to count for at least a third of its promised emissions reductions.
Individually, these net-zero plans might appear rational. The trouble comes when you begin to add them up toward a global target. There are three key challenges. First, there is a dramatic risk of underachieving necessary emissions cuts. The atomized, libertarian approach to net-zero only incentivizes companies to undertake emissions reductions activities that are cheaper than available offsets. But any entity that opts to purchase offsets to cover a ton of emissions that feasibly could be eliminated jeopardizes the global project of net zero.
The second risk is a corollary to the first: if entities are underachieving emissions reductions by over-relying on offsets, we must examine the consequences of rapid and expansive investment in core offsetting strategies. The two carbon removal strategies that the IPCC considers mature enough to include in its models (afforestation and bioenergy) rely centrally on large tracts of available land. But as past experience has shown and numerous activists and scholars have warned, a global land rush for carbon offsetting will have significant negative impacts on indigenous communities, economic equality, and biodiversity. Collectively, it seems unlikely that the world can deliver the total amount of offsets that net-zero pledgers appear poised to demand. But if it is capable, this delivery is likely to be accompanied by devastating collateral consequences for vulnerable populations, particularly in developing countries—with potential political fallout as well.
That brings me to the third challenge—a more legalistic one. The Paris Agreement provides the current overarching legal framework for international climate diplomacy via a “pledge and review” process, in which each country submits a “Nationally Determined Contribution” (NDC) every five years promising certain emissions reductions. The theory behind this agreement is that in crafting and executing these NDCs, countries will ratchet up their level of ambition as collective trust builds in the process. But this structure creates serious incentive challenges for the net-zero project, with its focus on inducing private-sector investment into (largely) developing countries. Despite years of negotiations, it remains legally unclear who gets to “count” or claim credit for voluntary net-zero offset projects. The corporate buyer? The host country? Both? This unanswered, diplomatically explosive question is central to the integrity of voluntary carbon offset markets going forward. If companies and host countries can both count the same offset credits, then net zero becomes an even more vacuous concept. But if countries must deduct offset credits sold to the voluntary market, then they may risk ceding many of the cheapest, easiest cuts within their borders to purchasing companies—potentially making their own eventual pathways to net zero more expensive and complex.
A Global Project Demands a Coordinated Effort
As this brief exposition of just some of the challenges of the net-zero project suggests, there are real difficulties with the current net-zero paradigm. These critiques are not meant to discourage all voluntary corporate action on climate change. Corporate experimentation and financing may prove vital in spurring innovations necessary to reach net-zero global carbon emissions. However, the net-zero project in its present iteration is more smokescreen than progress, unlikely to catalyze carbon reductions at the scale or pace necessary.
Fortunately, a more thoughtful, deliberate, and democratic net zero is possible. To achieve it, countries must take the lead on net zero, and should be held to account by their populations and peers for the many difficult choices involved in emissions netting policies. We should stop encouraging corporate pledges that focus on netting and start asking corporations to pledge simple, transparent emissions reductions goals, coupled with contributions to a global fund to help drive equitable, coordinated efforts toward necessary carbon removal. Corporate participation rates might drop but the integrity of the net-zero project would rise immensely—as would the chances of the world actually achieving the atmospheric equilibrium that we desperately need.