The Net-Zero Challenge: Global Climate Action at a Crossroads (Part 1)

Briefing PaperThe Net-Zero Challenge: Global Climate Action at a Crossroads(Part 1)December 2019In collaboration with Boston Consulting Group World Economic Forum91-93 route de la CapiteCH-1223 Cologny/GenevaSwitzerlandTel.: +41 (0)22 869 1212Fax: +41 (0)22 786 2744Email: contact@weforum.orgwww.weforum.org© 2019 World Economic Forum. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system.This briefing paper has been published by the World Economic Forum as a contribution to a project, insight area or interaction. The findings, interpretations and conclusions expressed herein are a result of a collaborative process facilitated and endorsed by the World Economic Forum, but whose results do not necessarily represent the views of the World Economic Forum, nor the entirety of its Members, Partners or other stakeholders. 3The Net-Zero Challenge: Global Climate Action at a Crossroads (Part 1)Foreword Executive summaryThe world needs to move to net zero – yet emissions continue to rise Governments: Commitments and policies are dramatically insufficient Corporations: Only a minority are taking the lead Investors: Action on long-term climate risks and opportunities is still limited Public opinion: Pressure is mounting, but not fast enough The way forward: Decisive, cohesive action by all stakeholders Methodology ContributorsReferences Endnotes45681012131617181920Contents 4The Net-Zero Challenge: Global Climate Action at a Crossroads (Part 1)ForewordFour years after world leaders met in Paris to agree on the historic Paris Climate Agreement, it is time to take an honest look at the progress on global climate action to date.This World Economic Forum and Boston Consulting Group paper is the first in a two-part series on The Net-Zero Challenge that examines what corporations, governments and civil society have achieved since the accord was drafted in 2015 and assesses the current state of global climate action. The full report, which includes a set of proposals to accelerate climate action, will be published in January 2020.A series of momentous events for the future of climate action – the United Nations Framework Convention on Climate Change COP25 at the end of 2019, the World Economic Forum Annual Meeting 2020 in January, and the COP26 in 2020 – provide the opportunity to build a strong, unified call for accelerated action among business and government leaders. Greater action is needed to deliver a safer world for future generations.Nations are still far from reaching the emissions trajectory needed to ensure that global warming stays within safe limits. While the risks of inaction are mounting, it is still possible to prevent the worst effects of global warming. The costs of abatement are falling and the technological solutions needed to decarbonize our economies are available. Many of these technologies can even have positive effects on other environmental challenges such as pollution, thereby providing opportunities for governments and businesses to establish a first-mover advantage.It is within everyone’s power and responsibility to act. This paper and the complete report aim to help clarify the path ahead and encourage a greater push for the action needed today.ForewordPatrick HerholdManaging Director and Partner, Centre for Climate Action, Boston Consulting GroupEmily Farnworth Head of Climate Change Initiatives, World Economic Forum 5The Net-Zero Challenge: Global Climate Action at a Crossroads (Part 1)Executive summaryCompanies should reduce the emission intensity of their businesses and seek opportunities in new low-carbon business models. By acting with others in their ecosystems, they can unlock further opportunities that might not be viable for solo players. Governments should come forward with Paris-compliant commitments and design policy frameworks to decarbonize their economies. By applying instruments such as cross-border carbon taxes or low-carbon product standards, they can protect vulnerable industries from unfair high-carbon competition – and potentially trigger a domino effect.The world is at a crossroads. The coming decade will decide whether humanity can achieve the goal of limiting warming to 1.5°C. Without a meaningful reduction in emissions in the next five years, the ability to act will increasingly be lost, resulting in damage that could become irreversible.In 2015, government representatives from 197 countries met in Paris and agreed to limit a global temperature rise by the end of the century to well below 2°C and to pursue efforts to limit the temperature increase even further to 1.5°C. In the four years since the historic meeting and 24 years after the first Conference of the Parties (COP) in 1995, however, progress on climate action has been limited at best. Global greenhouse gas emissions continued to increase by 1.5% per year in the past dec