There’s a new game in town for climate delayers. It’s called ‘net zero’.
Andrew Pendleton is Director, Policy & Advocacy at the New Economics Foundation
Cross-posted from the New Economics Foundation
The misery of those who bore the brunt of Storm Dennis this week and Storm Ciara the week before foretells a future in which the weather will be throwing much more volatility humanity’s way.
The much-discussed ‘Greta Thunberg effect’ has opened up the debate about what has come to be known as the climate emergency. Storms Ciara and Dennis will have opened this debate wider still.
You would have thought the time for obfuscation is over. But there’s a new game in town for those who still think there’s time left for business as usual. It’s called ‘net zero by 2050’ and it’s prevalence shows how many of those with power and influence still don’t really ‘get’ climate change.
There are three problems with ‘net zero by 2050’, which is the UK government’s official climate change target. The first is that it’s highly unlikely to be anything close to adequate in terms of the pace and scale of action required for the UK to meaningfully respond to the climate emergency. The second problem is that 2050 does not carry enough of a sense of jeopardy to influence decisions being made now. The UK is already wandering off track, with no clear climate plan for the economy.
Every business leader and politician loves a long-term target: never do today what you can put off until tomorrow! But the third problem with net zero by 2050 is the ‘net’ bit. It is already clear that ‘net’ is the last refuge of the climate scoundrel. In the global game of climate monopoly, it is fast becoming the ‘net out of jail free’ card.
‘Net zero’ describes a state in which the residual emissions that are left once the economy has decarbonised to the maximum extent possible are absorbed (or netted out) by planting a lot of trees and by the use of technologies such as carbon capture. The Committee on Climate Change (CCC), the UK’s climate watchdog, suggests the amount of carbon to be ‘netted out’ should be around 130 million tonnes of CO2 and restricted to sectors such as aviation and steel that are very hard to decarbonise. The CCC also advises that all of the ‘netting out’ should be achieved domestically and not by using international offsets (like planting trees in other countries, likely in the Global South). But the problem is that every sector wants to get their hands on some of these net emissions.
There are some notable exceptions to free riding on net zero, but also some egregious examples. Step forward BP.
Last week, just before Dennis blew into town, new BP CEO Bernard Looney announced the UK-based big oil corporation would be ‘reimagining energy’ and aiming for net zero by 2050, whereupon its share price rose by 1%. This is the first use in earnest of a ‘net out of jail free’ card by a large oil company, and the markets like it.
The only thing in BP’s announcement that is reliably at absolute zero is detail of how, as an oil company, it will achieve this. But what the markets probably responded to is the promise of future action in the long-enough term, alongside the pursuance of business as usual in the immediate term.
By the end of next year, BP expects to be pumping an extra 900,000 barrels of oil equivalent per day. This is around one-quarter more than the company’s reported 2018 levels, though it will probably be accompanied by a drop in production in some of BP’s older reserves. According to our ‘crude’ calculations, when burned, this would lead to around 140 million additional tonnes of CO2 equivalent per year, which is around two-fifths of the entire emissions of the UK in 2018.
A ‘net zero by 2050’ target, accompanied by no plan and an apparent business as usual strategy, is about as much use as a bucket in a once-in-a-century flood.
BP should not be allowed to get away with its all mouth and no trousers approach, but it has a role model: the UK government. Because for all of Prime Minister Johnson’s bravado at the recent launch of the UK’s presidency of the UN climate talks later this year, his government has no plan for how to achieve net zero and is carrying on as usual.
If companies and governments want to show leadership, as both BP and the UK claim, then they need to do three things. The first is stop playing the ‘net out of jail free’ card and be realistic about the need to reduce emissions to as close to zero as possible. The more the promise of ‘net’ beckons, the less incentive there is for the scale of action to reduce emissions now.
The third is to budget for carbon in the same way government and companies budget financially. The Climate Change Act already requires carbon budgets to be set in five year cycles and for annual reports to Parliament by the CCC, to which the government has to respond. It’s now time to set annual reduction targets of at least 10% and prepare an annual budget — including measures to achieve next year’s reductions — that has equal status with the government’s finances andis firmly linked to the government’s finances. Companies should do exactly the same.
Storms Ciara and Dennis and the growing climate movements are calling governments and business leaders out. Bring us the plan and stop trying to net out of jail free.