## A Path to Zero

## Source details

**Canonical URL:** [A Path to Zero](https://www.imf.org/en/publications/fandd/issues/2021/09/how-to-reach-net-zero-emissions-bertram)

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## Bibliographic details
- Authors: CHRISTOPH BERTRAM, OTTMAR EDENHOFER, GUNNAR LUDERER
- Published: September 2, 2021

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### Overview and key premises
- Reaching net zero emissions and limiting global warming to 1.5°C are achievable with comprehensive and rapid policy action.
- Breathtaking progress in crucial green technologies has improved prospects, but a full restructuring of global energy and land-use systems is required, supported by the right mix of policy incentives.
- Co-benefits of a 1.5°C pathway include improved air quality, modernization of infrastructure and economies, and increased energy sector employment and jobs with better long-term prospects.
- Because CO2 emissions remain in the atmosphere for hundreds of years, cumulative emissions largely determine warming; immediate near-term emissions reductions are therefore more important than the exact year of reaching zero.

### Electricity decarbonization — central role and pathways
- The electricity sector currently contributes roughly a third of total CO2 emissions.
- Achieving the 1.5°C target with medium likelihood requires emissions to decline immediately; the cheapest way entails cutting emissions roughly in half by 2030 compared with 2020 levels.
- Electricity generation remains dominated by coal and gas, but additions of wind and solar capacity increasingly outweigh fossil-fuel-based capacity gains.
- The pandemic illustrated that reduced demand tends to make electricity systems cleaner as higher-cost coal and gas plants are switched off first while solar, wind, nuclear, and hydro continue generating.
- More efficient use of electricity can contribute significantly to swifter emission declines, especially in the next decade when much generation will still be carbon-intensive.
- Limited availability of clean power technology is no longer the impediment; the slow phaseout of fossil-fuel-based capacities is.
- Regulatory action, ideally via some form of carbon pricing, is necessary to:
  - Shift new investments to green power technology.
  - Create incentives for phasing out fossil-fuel power plants.
- If the global community seizes rapid power system decarbonization, the power sector can slash its emissions by more than two-thirds by 2030 (Net Zero 2050 scenario).

### Land use, demand sectors, and CO2 removal
- The land sector currently includes both 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 (though agriculture will continue to emit methane and nitrous oxide).
- Energy demand from industry, buildings, and transportation would remain the primary contributors of fossil-fuel-based CO2 emissions in 2030 and beyond under 1.5°C scenarios.
- In 1.5°C-aligned scenarios:
  - Combined emissions from industry, buildings, and transport must be more than halved by 2040.
  - Those emissions must reach about a quarter of today’s levels by 2050 to achieve carbon neutrality around that date.
- Compensating for residual emissions requires very fast expansion of CO2 removal options, including:
  - Planting new forests.
  - Direct air capture and geological storage.
  - Bioenergy with carbon capture and storage (BECCS).

### Technology uncertainties and multiple pathways
- Many demand-sector decarbonization 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 considerably more uncertain than technologies deployed today (for example, renewable energy and battery-electric vehicles).
- Various combinations of technology developments can still yield a net zero global energy system:
  - If most options develop more favorably than expected, stronger net negative emissions may be achievable.
  - If some options advance while others lag, the mix changes but net zero remains achievable.
  - Only if all options develop more slowly than expected—or if unforeseen bottlenecks (for example, bioenergy-related sustainability issues) arise—would net zero become much more difficult.

### Orderly and just transition — policy tools and social cohesion
- The transformation to limit warming to 1.5°C must be comprehensive and rapid, but with the right policy mix can be relatively orderly.
- An inclusive and just transition that leaves no one behind is a political prerequisite for sustained policy support.
- A central policy tool is carbon pricing, implemented as a permit market (for example, the European Union’s Emissions Trading System) or a carbon levy that rises over time.
- The Network for Greening the Financial System’s “Net Zero 2050” scenarios (NGFS 2021) estimate carbon prices of between $100 and $200 a ton of CO2 in 2030, rising sharply until 2050.
- The International Energy Agency’s “Net Zero by 2050” scenario (IEA 2021) features regulatory policies more prominently and sees carbon prices that do not exceed $250 until 2050.
- Advantages of carbon pricing:
  - Coordinates effort across sectors and countries.
  - Provides regulatory certainty and incentivizes long-term investment.
  - Raises resources that enable governments to implement additional public-funding policies.
- Revenue recycling is important to ensure the transition does not leave anyone behind:
  - Responsible revenue redistribution can render carbon pricing progressive rather than regressive.
  - Revenue can support future-oriented infrastructure (for example, charging stations for electric vehicles) to prevent lock-in of obsolete infrastructure and support market emergence.

### Vital international cooperation and differentiated responsibilities
- The global picture remains daunting; international cooperation must change to ensure countries can recover from the pandemic on similar paths.
- Analysis of 1.5°C scenarios (NGFS 2021) indicates the target does not allow for widely varying decarbonization timetables: all major countries must realize peak emissions very soon and decline thereafter.
- High-income countries have greater responsibility and should provide more support (technology access, financing, increased direct investment) to lower-income countries given historical responsibilities.
- A promising cooperative approach is establishing climate clubs with differentiated minimum carbon prices:
  - Low- and medium-income countries would start with lower floor prices and benefit from some revenue generated by higher pricing in high-income countries.
  - High-income countries would gain assurance that manufacturing, trade, and emissions would not shift to unregulated markets.
  - Such clubs would aim to ensure mitigation efficacy and fair trading conditions while acknowledging political and implementation challenges.

*Christoph Bertram, Ottmar Edenhofer, and Gunnar Luderer (with Stephen Bi, Jérôme Hilaire, and Elmar Kriegler) — F&D Magazine article summarizing research and scenarios for net zero and limiting warming to 1.5°C.*

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_Source: https://www.imf.org/en/publications/fandd/issues/2021/09/how-to-reach-net-zero-emissions-bertram_