## Reaching net zero emissions and limiting global warming to 1.5°C

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**Canonical URL:** [Reaching net zero emissions and limiting global warming to 1.5°C](https://www.imf.org/-/media/files/publications/fandd/article/2021/september/how-to-reach-net-zero-emissions-bertram.pdf)

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### Electricity decarbonization: the first key
- Electricity sector currently contributes roughly a third of total CO2 emissions.
- Immediate emissions decline is critical because cumulative CO2 largely determines warming; the cheapest path to 1.5°C entails cutting emissions roughly in half by 2030 compared with 2020 levels.
- Wind and solar additions increasingly outweigh fossil-fuel-based capacity gains; limited availability of clean power technology is no longer the main impediment—slow phaseout of fossil-fuel capacities is.
- The power sector can slash its emissions by more than two-thirds by 2030 under the Net Zero 2050 scenario.
- Higher efficiency in electricity use contributes to swift emission declines without sacrificing system capacity; during periods of reduced demand, higher-cost coal and gas plants are switched off first while solar, wind, nuclear, and hydro continue generating.

### Land use, CO2 sinks, and removals
- The land sector includes CO2 sinks (for example, establishing new forests) and CO2 sources (most notably deforestation and other land-use processes).
- Changes in land-use practices could achieve CO2 neutrality in that sector by 2030.
- Land use—chiefly agriculture—will continue to contribute to warming through methane and nitrous oxide emissions.
- Compensating residual emissions requires very fast expansion of CO2 removal options, including:
  - planting new forests;
  - direct air capture with geological storage;
  - bioenergy with carbon capture and storage (BECCS).

### Demand sectors, technologies, and uncertainties
- Energy demand from industry, buildings, and transportation will be the primary contributors of fossil-fuel-based CO2 emissions in 2030 and beyond in 1.5°C-aligned scenarios.
- In these scenarios:
  - combined emissions of industry, buildings, and transportation would need to be more than halved by 2040;
  - combined emissions would need to reach about a quarter of today’s levels by 2050 to achieve carbon neutrality around that date.
- Many required technologies involve direct or indirect electrification via hydrogen-based fuels, fuel cell technology, and synthetic fuels.
- These technologies are not yet deployed at scale and face institutional and environmental challenges; their future performance and costs are more uncertain than those of technologies deployed today (for example, renewable energy and battery-electric vehicles).
- Multiple technology pathways can still deliver net zero; stronger net negative emissions are possible if options develop more favorably than expected. Achievement becomes much more difficult only if all options develop more slowly than expected or if unforeseen bottlenecks arise (for example, bioenergy-related sustainability issues).

### Orderly transition and policy tools
- The transformation to limit warming to 1.5°C must be comprehensive and rapid but can be relatively orderly with the right policy mix.
- A carbon price is a central coordination tool, implemented either as a permit market (for example, the European Union’s Emissions Trading System) or a rising carbon levy.
- Scenario price estimates:
  - Network for Greening the Financial System’s “Net Zero 2050” scenarios estimate carbon prices of between $100 and $200 a ton of CO2 in 2030, rising sharply until 2050.
  - International Energy Agency’s “Net Zero by 2050” scenario shows carbon prices that do not exceed $250 until 2050.
- Chief advantages of carbon pricing:
  - coordinates effort across sectors and countries;
  - fosters regulatory certainty;
  - incentivizes adequate long-term investment;
  - raises resources for additional policies requiring public funding.
- Revenue recycling is essential to ensure an inclusive and just transition:
  - revenue recycling to citizens can render carbon pricing progressive and support social cohesion and political support;
  - revenue can support future-oriented infrastructure projects (for example, charging stations for electric vehicles) that foster fledgling markets and avoid lock-in of obsolete infrastructure.

### International cooperation and climate clubs
- The global South and North have different responsibilities; all major countries must realize peak emissions very soon and decline thereafter.
- High-income countries should provide more support to other countries via easier access to technology, financing, and increased direct investment.
- A promising cooperative option is climate clubs with differentiated minimum carbon prices:
  - Low- and medium-income countries start with lower floor prices and benefit from some revenue generated by higher pricing in high-income countries.
  - Richer countries benefit from reduced risk of emissions or production shifting to unregulated markets and fairer trading conditions.
- Political challenges exist, but rewards include thriving, modernized economies and healthier, resilient societies.

_Christoph Bertram, Ottmar Edenhofer, and Gunnar Luderer; Stephen Bi, Jérôme Hilaire, and Elmar Kriegler also contributed to the research behind this article._

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2021/september/how-to-reach-net-zero-emissions-bertram.pdf_