Looking at a net zero transition in the real economy from ISF’s modelled pathways for industries.
Shifting away from coal and gas to clean power comes with its unique challenges. To announce net zero targets is one thing, to implement them another.
Industry capacity, investment pathways and decarbonisation targets are all areas brought to question to ensure a just transition to net zero emissions.
Among the private sector net zero targets, those of the financial industry have the highest capacity to mobilise capital and direct it towards climate solutions. Aiming to align investment decisions with the latest science, the UN-convened Net-Zero Asset Owner Alliance (NZAOA), representing 71 institutional investors with over US$ 10.4 trillion in assets, and the European Climate Foundation (ECF) have commissioned The Institute for Sustainable Futures (ISF) to develop energy-related carbon budgets for 12 main industry and service sectors in line with a maximum temperature rise of 1.5°C degrees above pre-industrial temperatures on a no/limited overshoot path.
The Principles for Responsible Investment (PRI), who is convening the NZAOA together with the UNEPFI, hosted a webinar on 4 May, Net Zero investor targets & sector pathways: One Earth Climate Model, discussing the pathways to net zero across key sectors. ISF Associate Professor and Research Director, Dr. Sven Teske, launched the latest key results of the One Earth Climate Model (OECM) for 12 industry sectors on scope 1, 2 and 3 emissions.
After meticulous research work, the findings result in granular data of each of the industries that emit the most greenhouse gases and identify clearly the cross-sectoral responsibility of those emissions. The datasets are open for download not only for the financial sector to align their investment, insurance, lending, and underwriting activities, but to everyone, so that businesses, policymakers, and other scientists have access to the tools that allow them to advance towards a true net zero economy around the world.
“Despite the growing number of countries and companies that have pledged for net zero targets, global annual greenhouse gas emissions have increased, which shows that setting targets is one thing, and implementing them is quite another”, says Dr. Sven Teske.
Dr Teske when regarding sectoral budgeting said that “power utilities have by far the greatest responsibility: They have to provide enough renewable electricity for the energy intensive chemical, steel, cement and aluminium industries and for electric vehicles that no longer need oil.”
It is crucial to have a science-based carbon budget for specific industries to implement climate targets for all parts of these industries and as a basis for carbon trading.
– Dr Sven Teske, ISF
The ‘greening’ of existing energy jobs is rapidly increasing and the sectoral pathways of the OECM identify the key enablers for industries to adopt and make the switch to renewable energy.
The new findings of the OECM show that it is still possible to limit global warming to 1.5°C if we take scientific data to heart, and if immediate and bold action is taken by all actors in politics, financial sector, and the real economy.
RESEARCH OUTPUTS
B) 1.5 °C pathways for the Global Industry Classification (GICS) sectors chemicals, aluminium, and steel (2022) (Journal Article)
C) One Earth Climate Model—Integrated Energy Assessment Model to Develop Industry-Specific 1.5 °C Pathways with High Technical Resolution for the Finance Sector (2022) (Journal Article)
D) OECM data results:
Read more about this project
How can we limit global warming to 1.5°C?This research has been supported by the European Climate Foundation. Responsibility for the information and views set out in it lies with the author[s]. The European Climate Foundation cannot be held responsible for any use which may be made of the information contained or expressed therein.