Barriers to achieving a net zero economy by 2050 are falling rapidly, however institutional change is necessary for that target to be reached.
A panel debate at this week’s BloombergNEF Summit in London, which discussed how the energy sector can contribute towards the UK’s net zero by 2050 target, ultimately concluded that while there were “major policy holes” that needed to be filled to point markets in the right direction, there is no political or regulatory barrier to reaching such a target.
Charlie Wilson, reader in energy and climate change at the University of East Anglia, also suggested that any technology, infrastructure and finance barriers were surmountable by 2050.
This led Wilson, and the rest of the panel, to conclude that the challenge to achieving a net zero economy by 2050 would be institutional. Wilson embellished on this point by noting that local governments and even businesses were leaving national governments in the shade with more ambitious action.
This was a point of discussion frequently raised throughout the conference, with ex-clean growth minister and COP26 president nominee Claire Perry adding that the net zero appetite is “stronger in boardrooms than in some governments”.
The panel debate started with a discussion around the actual date chosen by the UK. Former Prime Minister Theresa May set the 2050 target under guidance from the Committee on Climate Change, while Norway’s target has been set at the more ambitious 2045. Meanwhile last month the Labour Party agreed that it would target a significantly more advanced timeline of net zero by 2030.
Faustine Delasalle, director at the Energy Transitions Commission, noted that her organisation’s modelling revealed that the earlier the net zero target the costlier reaching it would be, a matter made all the more complicated by the fact the technology base needed to reach Labour’s net zero target of 2030 are not yet commercially viable.
Electricity, Delasalle said, would be responsible for some 70% of the solution to net zero, placing a significant importance on decarbonising power generation. The question then becomes how the remaining 30% is decarbonised, particularly areas such as heavy-duty transport. Hydrogen was mooted by many at the event as a potential contributor to much of that remaining 30%.
Schneider Electric’s Mike Hughes meanwhile welcomed the addition of such targets, suggesting they had “focused minds and attention” on to the climate crisis itself, perhaps best evidenced by recent protests and climate strikes witnessed across the world. This, Hughes said, had been a “game changer” for the net zero argument.
Not only did this provide evidence that any societal barrier to net zero could be hurdled, but such targets “give companies a very clear direction of where markets are heading,” Hughes said, and allow them to invest accordingly.
Technology barriers and the risk of moving too fast
Delasalle said that while a portfolio of technologies necessary to achieve net zero was under development, there was a need to bring these to market as quickly, and at lowest cost, as possible.
These costs ultimately stand to be borne by companies, with Delasalle pointing in particular to green steel, where the cost to the end consumer is ultimately very small. For a standard family car to be manufactured using green steel instead of conventional materials, it adds approximately 1% to the vehicle cost, a figure which most consumers wouldn’t balk at.
But those costs continue to increase for manufacturers, a matter which Delasalle said would have to be tackled by “the right incentives” to convince businesses to push ahead. The problem is that governments “lack the political courage” to introduce such incentives, she added.
Other questions surrounding the transition to a net zero economy included the potential for a shift in energy generation and consumption occurring too fast, with the risk of triggering an incident that could damage public opinion.
The stress event experienced in the UK in August was ultimately found not to have been triggered by renewables and was pinned on an extremely rare series of concurrent events. Nevertheless, Orsted’s Jakob Askou Bøss pointed to the fact that Denmark is able to run on 50% renewable power using modern technology.
Delasalle did, however, add that it was the energy sector’s responsibility to work in tandem with regulators and businesses to provide the requisite infrastructure to “encourage modal shifts” such as the energy transition.