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The world has rarely seen any environmental ideas take off like the push to reduce greenhouse gas emissions to zero.
A marginal concept six years ago, it has become a general trend as quickly as more than 60 percent of countries now have some kind of zero net target, along with investors managing about $ 37 billion already at least 20 percent of the 2,000 largest listed companies. The International Energy Agency warns today in a shocking zero net report that all new oil and gas and coal exploration and exploration projects must cease if global warming remains below 1.5 ° C.
Still, for many companies, the rush to zero zero seems like an approaching car accident. These groups face increasing pressure to be sustainable both environmentally and financially at a time when the green technologies they need are still on the drawing board; the support of government policies is negligible and a small group of influential but little-understood arbitrators judge their progress.
Think about what executives of American and European companies have been saying, according to Chatham House rules, at climate business meetings in recent weeks.
“Our customers include local authorities who have declared climate emergencies and who want to be carbon neutral by 2030,” a manager of a construction group told a meeting last month. “Our directors said, ‘Okay, we need to reduce our emissions.’
But when the company studied how to do it, it found that buying cleaner hydrogen-powered equipment for one of its smaller plants would only cost more than $ 2 million.
Another executive from a manufacturing business who had just made a net commitment from scratch said his company was making a technological breakthrough to replace its mainly fossil fuel furnaces with a cleaning kit, hopefully, from here in a few years.
It is likely that the first oven cost “about twice” the normal price, and he said his business was relatively lucky. It is located in Europe, where there is public funding for green industrial innovation. There are too many companies that are not. To them, and unfortunately many others, carbon offsets seem like the easiest solution.
Voluntary compensation schemes allow a company to effectively pay another person to deal with emissions, for example, by planting carbon-absorbing trees or building wind farms to replace coal-fired power plants.
Schemes have been around for decades, though studies they show that too many have not caused additional emission cuts. Not all offsets are useless, but neither are they a satisfactory substitute for the strong unprecedented emissions cuts needed this decade and the next to achieve the safest global temperature targets of the Paris climate agreement.
Unfortunately, interest in compensation increases in conjunction with net zero targets.
“There will be a green rush to find the most credible certificates,” predicts a food company executive.
This rush is in the process of colliding with investors ’demands for scientifically credible climate targets rather than vague promises to do something about the future.
Enter science-based goals initiative, a program created in 2015 by four sustainability groups to validate and review corporate climate goals. This has become an increasingly important benchmark for investors trying to evaluate business climate plans. More than 1,420 companies have joined the initiative, including more than 90 in March alone. triple last year average monthly rate.
The program’s position on offsets has been clear for some time: companies need to set targets based on reducing their own emissions and / or supply chains. Compensation cannot be used to circumvent this requirement.
Their work is undeniably necessary. There are too many corporate goals that are too vague and distant. Some make an abject wash of green.
Still, it is surprising that a handful of NGOs are effectively setting the rules for the greatest economic transformation the world has ever known. It may also be unfair to pressure companies to reform their business models before there are all the elements needed for this transformation. Yet they are.
What should companies do?
First, stop putting pressure on tougher climate action. The delays helped create the problem in the first place. Instead, forge industry alliances to push for broader systemic change, either government support for green innovation or policies to cheapen existing clean technologies.
Finally, it resists offsetting and accepts the reality of the 21st century: the imperative to reduce emissions is urgent and will only grow further in the coming decades.
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