The path to decarbonisation is uneven and daunting, but we have the capacity to spur change.
Reaching net zero was always going to be hard. Given that 84% of the world’s energy still comes from fossil fuels, achieving a state where our global systems emit only as much carbon as they can absorb will be the biggest challenge humanity has ever undertaken.
In the next years to 2030 and beyond there are going to be vast changes in the ways we work, play, eat, move around, power our lives, make and use things because all of these activities generate greenhouse gas emissions. Meeting the aggressive targets the world has set to reduce emissions means that all of these activities have to be transformed.
How can we start to unpack this vast transformation that is needed across our society and economy? It’s not about a single magic bullet, a single technology, or even a single stream of work. Rather, we think action is needed in at least four interconnected areas to spark the chain reactions of change that can build upon one another, create momentum, and propel us more rapidly on the path to net zero:
1. Innovation & product development
We need innovation and product development to make green options feasible, affordable, and appealing. In fact, the International Energy Agency predicts that roughly half of our improved carbon efficiency in energy by 2050 will use technology that exists now only as prototypes. While momentum is building to achieve the breakthroughs we need, the lack of feasible green alternatives inhibits the transition. Without feasible, scalable green options, from aviation fuel to steel and everything in between, the political reality is that companies and countries will struggle to scale up their decarbonisation efforts. As a result, governments and the private sector need to fuel investment in innovation, product development, and the distribution of products to end-users at scale.
2. Functioning markets
We need to make functioning markets where business can exercise its creative power to deliver a green transition at speed. This means making sure myriad elements such as financing, infrastructure, demand, and aligned incentives are in place. Many obstacles still exist though: bureaucratic barriers, conflicting interests, lack of infrastructure, low demand, high risk, broken supply chains, absent incentives, and other market inhibitors prevent companies from entering markets or operating in ways that ultimately reduce emissions. To develop thriving green markets, a broader conception of value is needed that includes both financial and societal benefit. Trusted non-financial reporting metrics and disclosures are also necessary so that businesses can plan and measure their progress, and so that investors can reward performers accordingly.
3. Policies & regulations
We need government policies and regulations to incentivise actions aligned with net zero and to provide the clear market signals business requires in order to act and invest with confidence. Movement toward consistent policies, frameworks, and reporting standards has begun, but the work to agree to global standards and achieve adoption by governments and regulators will be a marathon, not a sprint. As a result, policies at the state and local level need to be implemented to set clear expectations and incentives for business.
4. Political & public will
We need to build and maintain political and public will for deep change. To maintain the world’s will, we must deliver a just transition, managing the social and human impact with compassion for all people and nations. We must recognise countries’ differing abilities to make this transition, and the need for feasible green options if countries are to reach net zero while maintaining their people’s livelihoods. While many today agree that urgent action is needed, the path to net zero needs to be practical and affordable, otherwise support for net zero could erode if the transition is too painful. It’s not sufficient simply to declare that systems must change without regard for how those changes will affect people or countries. We must manage this vast, disruptive transformation with empathy for its effects on people.
It’s easy to be pessimistic about the pace of progress. PwC research shows we are decarbonising at less than a fifth of the rate needed to achieve net-zero emissions by mid-century. Although there is a broad global consensus that rapid emissions reduction is necessary, heroic efforts will be needed to achieve it. We need all hands on deck in both the public and the private sectors. We all need to pull every lever in our grasp to accelerate progress. The powerful force of the four areas mentioned above can sustain the exponential gains needed to keep the goal of limiting the temperature rise to 1.5°C. Let’s make it happen.
