Towards Sustainable Development — the Net-Zero Emissions

In the recent decades, global climate change has become a great challenge to be reckoned with. According to NASA, for millennia, atmospheric carbon dioxide had never been above the level of roughly 300 parts per million. However, following the Industrial Revolution and other intensive human activities, the level has been proceeding at an unprecedented rate in the mid-19th and the 20th century. The increasing level of greenhouse gases has caused the earth’s surface temperature to rise over 2 degrees Fahrenheit (1 degrees Celsius) since the late 19th century, which further resulted in warming ocean, shrinking ice sheet, glacial retreat, decreased snow cover, sea level rise, declining Arctic sea ice, extreme events and ocean acidification. Many animals, especially in the polar region, were deprived of habitats because of the destruction on ecosystem. It is also suggested that the thawing permafrost would unleash ancient viruses and twice as much carbon as earth’s current atmosphere, inducing further rises in temperature. Net-zero emissions is a goal proposed by economists and politicians as human races are confronted with escalating global climate changes. It refers to achieving an overall balance between the release and the reduction of greenhouse gas emissions, which means actions like afforestation and energy saving should be done to offset and curb the emissions in production from countries, enterprises and individuals. In the long run, it is also necessary to achieve “real” net-zero emissions, rather than carbon neutrality.
The goal seems to be far beyond reach since it requires efforts from everyone who is involved in the economic production. In 2018, EU posted a prospect to achieve the goal by 2050, with many advanced economies following its pace. Biden also announced in the 2021 Leaders Summit on Climate that the US will cut carbon emissions by 50% to 2030, and realize carbon neutrality by 2050. Nevertheless, it could be costly to put the blueprint into practice. For governments, in the first place, a huge sum of investment is required in both infrastructure and the establishment of a complete carbon pricing system. Besides, it entails time and labour costs to enshrine the commitment in law, supervise the operation of enterprises and cope with unemployment. In terms of enterprises, it is expensive to carry out research on alternative energy and have an in-depth analysis on coal exposure, fossil fuel reserves, utilities and mining, followed by the transformation of products life-circle and supply chains, according to the data provided by S&P Global. “Carbon neutrality is not merely related to technology, but also Economics and Management,” said Liu Qiao, the president of Guanghua School of Management in Peking University. If enterprises regard carbon as an element of expenditure, the production function changes, which affects the pattern of long-term firm growth. For individuals, with new burgeoning supplies, both consumers and investors are to reconsider their life style and demands. After all, the resilience from either demands or supplies varies. Controversy was also sparked on how the government will implement the policy, rather than a campaign slogan.
Furthermore, even if all advanced economies pledge to reach the target, problems occur in developing regions. In the post-industrial stage, developed countries rest mostly on the third sector and have been gradually shifting heavy industry to developing countries like Vietnam and Cambodia where the second sector contributes much to their GDP growth. The “transfer” may alleviate emission problems in a certain area, but means nothing to the Earth as a whole.
In the 2022 Boao Forum in Asia, experts have been discussing on the detailed missions nations should do to accomplish the goal. As what Zhou Xiaochuan the vice chairman of the forum said, carbon price was market-driven in the early phase where only the minority of people had been aware of climate changes, hence is low in a voluntary carbon market with little stimulus. With growing consensus and the optimization of incentives, a larger and more united carbon market is formed, and the carbon price soars.
He added that the incentive mechanism should not only cover spot prices, but also futures. While those who emit more must pay a carbon tax, those with less obtain profits by selling the quota, which is the permitted aggregate of emissions. In the long run, by releasing signals of potential revenues from carbon reduction, carbon sink and other derivatives, more firms, investors and financial institutions will be attracted.
As for the diminution worldwide, Li Bo, the vice president of the International Monetary Fund (IMF), suggested that a global carbon pricing floor should be set as a crucial means to this end. Despite the fact that the current price is only around $5 per ton, according to estimates, the average carbon price in developed countries should hit US$75 per ton by 2030, with US$50 for middle-income developing countries and more than US$25 for low-income countries. The specific price level differs in terms of industrial competitiveness, the development level of each country and the strength of international support.
Besides, Janos Pasztor, the executive director of the Carnegie Climate Governance (C2G) Initiative, stressed the importance of multilateral cooperation when mentioning Climate Justice. Developed countries should to reach the end as soon as possible, leaving time for developing economies which need technological support and financial assistance.
By Jennifer Liu