BlogNet-Zero
What is Net-Zero?
Term Net Zero refers to the state at which greenhouse gas (GHG) emissions INTO the atmosphere and emissions OUT of the atmosphere are balanced out. This means that when what we add is no more than what we take away, we reach net zero.
Difference between Net-Zero and Carbon Neutral
- Net-zero means reducing emissions (all greenhouse gases: CO2, methane, sulphur dioxide, etc.) in line with the latest climate science and would generally follow a certain trajectory, e.g. 1.5°C or 2°C. Remaining residual emissions are balanced out through the purchase of carbon removal credits.
- Carbon neutral means balancing emissions (typically CO2) released to the atmosphere from human activities by buying carbon reduction credits (carbon sinks like forests or oceans that absorb more carbon than they emit to the atmosphere). It wouldn’t follow a specific reduction trajectory like in the net-zero case.
Ambition Level: Net-zero often implies a deeper commitment to reducing emissions to as close to zero as possible before considering offsets, while carbon neutrality may rely more heavily on offsetting emissions that cannot be reduced.
Application: Carbon neutrality can apply to specific activities, events, products, or organizations, while net-zero is often used in a broader context, such as for entire countries, cities, or large corporations.
Nationally Determined Contribution (NDC)
Submissions by countries that have ratified the Paris Agreement present their national efforts to reach the long-term temperature goal of limiting warming to well below 2°C. New or updated NDCs were submitted in 2020 and every five years thereafter. NDCs thus represent a country’s current ambition or target for reducing emissions nationally.
Science Based Targets Initiative (SBTi)
The initiative is a collaboration between four prominent environmental organizations: Carbon Disclosure Project (CDP) CDP, the United Nations (UN) Global Compact UNGlobalCompact, the World Resources Institute (WRI) WRI and the World Wide Fund for Nature (WWF) Panda.Org, and one of the We Mean Business Coalition WeMeanBusiness commitments.
Science-based targets (SBT) – provide a clearly defined pathway for companies to future-proof their business, by specifying how much and how quickly GHG emissions need to be reduced to avoid serious and severe effects of climate change. Targets are considered science-based if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement.
The SBTi defines and promotes best practices in science-based target (SBT) settings, offers resources and guidance to reduce barriers to adoption, and independently assesses and approves companies’ targets.
Science Based Targets Initiative (SBTi) corporate net-zero standard
As there is an increase in the number of countries, organizations, and businesses setting net-zero targets, the SBTi has developed a science-based framework for the formulation and assessment of net-zero targets in the corporate sector.
Broadly speaking, corporate net-zero targets differ across three key dimensions:
- the boundary of the target
- the mitigation strategy that the company will follow to attain the target
- the timeframe to achieve the target
What are scope 1, 2, and 3 carbon emissions?
There are three different ‘scopes’ within which companies’ GHG emissions are measured and assessed. This allows to identify the source(s) of the emissions and to gain an understanding of what activities contribute to them before committing to the emission reductions.
Scope 1, 2, and 3 are used to categorize different kinds of emissions a company creates in its own operations and in its wider ‘value chain’ (its suppliers and customers).
- Scope 1 – are direct emissions that a company has control over. Example, fleet/vehicle fuel use, leaks and venting emissions from operations, etc.
- Scope 2 – are indirect emissions that occur from where the source of energy (electricity, steam, heat, and cooling) a company purchases and uses is produced. Emissions are a consequence of activities of the reporting organization but actually occur at sources owned or controlled by another organization. Example, the use of electricity by the company’s building/facility.
- Scope 3 – are also indirect emissions but which are not covered by Scope 1 or 2. Example, sold gas which was used by customer, purchased goods and services, employee commuting, etc.
Carbon Credits / Carbon Offset
Carbon credits are a market-based mechanism used to reduce greenhouse gas emissions.
Carbon credits represent the right to emit a certain amount of carbon dioxide (CO2) or other greenhouse gases (GHGs). One carbon credit typically permits the emission of one metric ton of CO2 or an equivalent amount of other GHGs.
Purpose:
The primary goal of carbon credits is to provide economic incentives for reducing emissions of pollutants. By putting a price on carbon emissions, companies and organizations are motivated to adopt cleaner technologies and practices.
How they work:
- Cap-and-Trade System:
- Governments or regulatory bodies set a cap on the total amount of greenhouse gases that can be emitted by certain industries or sectors.
- Companies receive or buy a certain number of carbon credits, which represent their allowance to emit a specific amount of carbon dioxide.
- Companies that reduce their emissions can sell their excess credits to other companies that are struggling to stay within their emission limits, creating a financial incentive for reducing emissions.
- Carbon Offset Projects:
- Organizations can also invest in carbon offset projects that reduce, remove, or avoid emissions elsewhere, such as reforestation, renewable energy projects, or energy efficiency improvements.
- These projects generate carbon credits that can be sold or traded.