Full Title: Hard-to-Abate Sectors and Emissions: The Toughest Nuts to Crack for a Net Zero Future
Author(s): Jason Channell, Elizabeth Curmi, Ying Qin, Emma Hawkins
Publisher(s): Citi GPS
Publication Date: May 21, 2021
Full Text: Download Resource
Description (excerpt):
The COVID-19 pandemic has been noteworthy for so many negative things, but there was one temporary bright spot — global carbon emissions declined. With the sudden halt in industrial production and transportation coming to a standstill, cities saw noticeable declines in air pollution and the atmosphere benefitted from a decline in greenhouse gas emissions. Although these benefits were temporary and reversed once economic activity started to ramp up, it was encouraging to see that declines in emissions can actually happen.
Obviously shutting down major sectors of the economy for periods of time isn’t the long-term answer to reducing emissions. But seeing evidence that lowering emissions can lead to a decline in greenhouse gas concentrations — whether the decline is big or small — is important and has helped changed attitudes toward making the effort.
In our Citi GPS report Financing a Greener Planet, we noted that government focus on climate action is actually accelerating with stronger climate policies and net zero emissions targets being put in place. This increased focus on climate is occurring in parallel with a rise in corporate and individual focus. Stimulus packages in many countries are focusing on green infrastructure and technology investment that help the economy transition away from fossil fuels.
Progress towards a more sustainable global economy is already being made in a number of sectors, through actions such as the promotion of electric vehicles and recycling schemes, as well as an increased focus on energy efficiency in buildings. But not all sectors are created equal in terms of how easy it is to convert them to green. Certain sectors are harder to abate than others and it will take breakthroughs in technology, investment, and time to lower emissions.
In the report that follows, Citi’s Sustainable Finance team takes a detailed look at two hard-to-abate sectors — transport (road freight, aviation and shipping) and industry (cement and steel) — which need to be focused on to successfully meet net zero emission commitments. Collectively, these sectors account for 25% of today’s global carbon emissions, but have the potential to rise by 50% through 2050 given growth expectations.