Strategy

Everything you need to know about the CCC’s Net Zero Report

Posted by Carlota Esguevillas, Wednesday, 8 May, 2019

The damaging impacts of climate change are indisputably already being felt today. Thanks largely to the IPCC, we now fully understand the urgency of limiting temperature rises as quickly as possible. As we stand, the UK has experienced one of its warmest, driest winters to date and is forecast to exceed existing carbon targets in 2025 and 2030. Dramatic change at speed has never been more necessary, and last week we witnessed that the tides may be turning.

Last Wednesday, following months of climate protests across the UK and globally, Parliament passed a motion declaring an “environment and climate crisis.” It makes the UK the first state in the world to declare a climate emergency, in theory placing climate change at the very centre of every political decision made in this country.

Following hot on the heels of this declaration is the Committee on Climate Change’s much-anticipated report stating that the UK must immediately set a legally binding target to cut greenhouse gas emissions to zero by 2050. If the UK heeds this recommendation, which it is expected to, it will place the UK as a global leader in combating carbon.

The Recommendations

“The Committee on Climate Change’s report and recommendations mark a new dawn for climate change action in the UK.”  – Rain Newton-Smith, CBI Chief Economist

‘Net Zero’, as the report is titled, refers to reaching zero carbon emissions by 2050. It means dramatically reducing all emissions, and for those unavoidable emissions, balancing the amount emitted with equivalent emissions that are either offset or sequestered. This differs from zero carbon, which requires no carbon emitted as its key criteria.

Crucially, the CCC target includes flying, shipping and all greenhouse gases, whilst allowing no offsetting of emissions abroad. This make it the toughest of any major economy to date.

Hitting zero emissions by 2050 will require a leap in the ambition of government policy, particularly in areas such as heating and transport. It will mean the end of petrol and diesel cars and gas boilers, less meat in our diets, quadrupling clean electricity generation and planting an estimated 1.5 billion trees.

Whilst this may seem a daunting task, the CCC also confirmed what many in our sector already know. The UK possesses the technical capabilities, natural resources, and financial capital to deliver all the key pillars of a net-zero economy within this timeframe. The foundations are already in place, and many of the technologies and systems required are already in development.

Encouragingly, nothing about the report seems impossible. All scenarios are firmly rooted in technological, economic, and political reality. Further still, the Committee believes the recommendations could be achieved within the same cost envelope (1-2% of GDP) as the current, less-ambitious Climate Change Act. And this is before even considering countless benefits such as health, green economy growth and many more.

What does this mean for business?

Reaching net zero by mid-century will require a series of paradigm shifts happening in unison across all sectors of the economy. It will touch every business, small and large. Expectations and subsequent scrutiny on business to align ambitions to UK Government and support this monumental transition will inevitably increase.

Two sectors facing the biggest challenges due to their current reliance on fossil fuels are Transport and Home Building and Heating.

Transport

This sector, which currently accounts for a quarter of UK emissions, will see dramatic changes by mid-century. Transport is already undergoing a transformation with a number of existing targets in place at a policy level, such as the ban on the sales of new diesel and petrol cars and vans by 2040.

But the CCC argues they don’t go nearly far enough. It recommends moving this phase-out nearly two decades earlier, to 2025. It also recognises that these cars will still require a lot of electricity – clean electricity. Therefore, clean power generation will need to quadruple by 2050 to meet new demand, and more big storage will also be needed.

Aviation, currently the fastest-growing source of greenhouse gas emissions, is also included in the CCC targets. Further behind the automobile industry in terms of low-carbon technology, expansion will likely have to be limited, with potential aviation growth dependent on airlines cutting their emissions per flight and introducing electric planes.

Home Building and Heating

At present hugely reliant on natural gas for heating, this sector requires radical, systemic transformation. Homes account for 22% of the UK’s CO2 emissions. Yet since 2012, there has been a 95% reduction in installation of energy efficiency measures in UK homes – this is a trend which needs to be reversed very quickly.

The CCC recommends that no new home should be connected to the gas grid after 2025. Natural gas will need to be replaced – electrification will be an important part of this but the CCC also recognises that a low-carbon alternative gas such as Hydrogen is part of the solution. Building this infrastructure and capability would also support decarbonisation in other sectors such as transport.

Final thoughts

The headline benefits of a zero-carbon economy are obvious. But beyond leading the way in preventing the catastrophic impacts of climate change, we can also expect to see huge benefits to people’s health from better air quality, less noise thanks to quieter vehicles, more active lifestyles, heathier diets, and increased recreational benefits from changes to land use.

In addition, the UK will receive an industrial boost as it leads the way in low-carbon products and services. We have both a responsibility and an opportunity to lead the decarbonisation of the economy, and the CCC’s Net Zero Report provides an evidence-based, hopeful, and (most importantly) achievable blueprint to follow. Aligning corporate strategies to the aim of achieving net zero is surely the only sensible commercial response.

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