Some of today’s major carbon emitters (China, EU, Japan, Korea, and USA) have made pledges to reach net zero emissions by mid-century.This will reduce a large share of emissions. In addition, the transition in these countries will provide technology and policy solutions that will make it easier and more affordable for other countries to follow.
Explained: Why And How G20 Should Act Urgently on Reaching Net Zero Emissions
Chandigarh (ABC Live): In the year 2022, the presidency of G20, a group of the world's largest economies, including both industrialized and developing nations was handed to India.
ABC Research team is keeping a close watch on all events of India’s G20 Presidency and will publish a research report after the New Delhi G20 summit 2023.
It is pertinent to describe here that 1st Environment and Climate Working Group Meeting under India’s G20 Presidency is all set to be organized in Bengaluru from 9/02/2023 to 11/02/2023, wherein the working group will discuss why and how G20 should reach net zero emissions.
Before reporting on India’s G20 Presidency of G20, ABC Team working on India’s G20 Presidency refers to an article published by IMF on why and how to reach net zero emissions for our readers with the sole aim to make them understand the G20’s action plan on reaching net zero emissions.
The above stated IMF’s post under the subhead Need for Immediate and Universal Action says as under;
Why Delaying carbon pricing makes it extremely difficult to reach net zero emissions?
In an illustrative “delayed action” scenario, the green stimulus investment is implemented in 2021, but the start of carbon pricing is delayed to 2030.
It is assumed that the carbon prices applied in the “aggregate policy package” of Box 135 are simply shifted back by nine years.
This delay implies that emissions are merely stabilized at today’s level and are far from reaching net zero by mid-century. Moreover, the trajectory of economic activity is smoother when the introduction of carbon prices is anticipated than when it is unanticipated.
An alternative would be to assume that the carbon prices increase more sharply after their delayed introduction. This might still make it possible to reach net zero emissions by mid-century, but the fast rate of increase in carbon prices can be expected to lead to large economic costs. While an economy can adjust smoothly to a moderate increase in carbon prices, the capital replacement rate might be too slow to react without large losses to drastic increases.
Why Global participation is needed to reach net zero emissions.
Some of today’s major carbon emitters (China, EU, Japan, Korea, and USA) have made pledges to reach net zero emissions by mid-century. This will reduce a large share of emissions. In addition, the transition in these countries will provide technology and policy solutions that will make it easier and more affordable for other countries to follow.
However, stabilizing the global climate will require global emissions to go to net zero. In the absence of climate policy, today’s smaller emitters will become major emitters as their populations grow and per capita incomes increase.
It is thus important that countries other than today’s top several emitters follow quickly. An illustrative “Partial participation” scenario assumes that China, the EU, Japan, and the US form a coalition to reduce their emissions to net zero, but none of the other countries act.
The reduction in emissions by the coalition countries does avoid the increase in global emissions seen in the baseline. But the absolute level of emissions declines only moderately compared to today’s level, reflecting the continued increase of emissions in the countries that do not participate. In this case, global emissions will be far from reaching net zero, underscoring the need to ensure broader participation in mitigation strategies.
How an agreement on a minimum carbon price among G20 countries would help scale up the action while limiting negative spillovers?
A common minimum carbon price among the G-20 economies would help protect firms in energy-intensive and trade-exposed sectors from losing competitiveness and prevent production from shifting to countries with lower prices within the group.
It could also avoid the use of potentially contentious and complex border-carbon adjustments by countries that plan to move ahead with carbon pricing.
A minimum price system could embed a lower carbon price floor for countries with lower per capita incomes in recognition of the principle of common but differentiated responsibilities between countries, as well as the higher carbon intensity of their economies. Higher carbon intensity makes emissions more responsive to changes in carbon prices, requiring a smaller increase to achieve a given reduction in emissions.
For Reading IMF published an article on reaching net zero emissions click here