"Race to Zero": Considerations and Challenges for Net Zero Climate Initiatives
In an AFPC-USA exclusive, Oheneba Ama Nti Osei, business journalist and Managing Editor at PYMNTS, spoke to Nigel Topping, Global Ambassador to the UN High-Level Climate Champions, to discuss net zero climate initiatives and building a green, resilient global economy.
Topping, who was also appointed as the UK’s UN Climate Change High Level Champion in 2020, has been working in close collaboration with Gonzalo Muñoz, the Chilean High-Level Climate Action Champion, on public and private sector initiatives aimed at accelerating the transition to a net zero future.
The AFPC-USA is solely responsible for the content of this educational program. Below, readers will find a summary of key takeaways from the discussion.
ON THE “RACE TO ZERO” CAMPAIGN
Race to Zero is a United Nations-backed global campaign rallying non-state actors – including companies, cities, financial and educational institutions – to commit to an overarching goal: to take immediate, actionable steps towards reducing greenhouse gas emissions by 2030.
Topping started the campaign with Muñoz in 2020 and said the imperative to bring global carbon emissions down to zero became more urgent after the International Panel on Climate Change (IPCC) published a 2018 report highlighting how the economic and the human damage from climate change was now above pre-industrial levels.
There were few companies or cities and “hardly any financial institutions” committed to net zero emissions when the campaign started but Topping said getting non-state actors on board “makes it easier for politicians to act.”
There are currently well over 10,000 companies, over 1,000 cities, and over 500 financial institutions that have joined the Race to Zero campaign after it went viral.
ON THE CHALLENGES BUSINESSES AND STAKEHOLDERS HAVE ENCOUNTERED WHILE PURSUING THIS MISSION
Topping says the first challenge businesses must overcome is the assumption that pursuing a net zero agenda is “going to cost you business” or “be a trade off” of some kind.
The details of the initial transition can be difficult for businesses to accept but according to Topping, “energy-related emissions in industry are amenable to” technological shifts.
Over the last few years, there has been an “exponential change” in the field of renewable energy that will make clean future energy more attainable.
The publication of a 2018 report titled “Mission Possible: Reaching Net-Zero Emissions from Harder-to-Abate Sectors” in partnership with the Energy Transfer Commission has gone a long way to supporting the larger mission by providing pathways to, for example, the steel, cement, shipping, and aviation industries.
ON HOW BANKING AND THE FINANCIAL SERVICES SECTOR COME INTO PLAY
Topping, who is a board member of the UK Infrastructure Bank, says financial institutions will have to “pivot their loan books and investments depending on the type of banks they are” to accelerate the transition to a zero-carbon future.
To reconfigure their loan books, he says this can be achieved partly by lending to new green businesses and by “lending less to those that aren’t making the transition.”
Between $4 and $6 trillion has to be invested toward climate goals by 2030, which is about “five times what [banks] are doing now.” And while there needs to be a lot of public finance, most of the funding will need to come from the private sector.
It’s “complicated” for bankers to commit to reducing their financed emissions per sector, but once they figure out their “baseline,” it must be tracked and becomes another part of the overlay all managers must consider “when engaging with their numbers.”
ON THE RELATIONSHIP BETWEEN THE CIRCULAR ECONOMY AND A NET ZERO FUTURE
Topping says it’s imperative to figure out a way for the economy to function within what scientists refer to as Earth’s “planetary boundaries” — a place with finite sources and finite materials.
The good news: “There is a constant influx of energy from the sun” that offers a circular solution of 40 to 50% of emissions savings. He adds: “There is no way to net zero without a very big push towards circular material flows.”
An important part of the journey is making “recovered material cheaper than virgin materials”—here, Topping uses the production of cashmere to make his point—and that is “helped by fiscal incentives and end of life responsibilities.” There is more investment happening at the moment—but still not enough.
ON CARBON NEGATIVITY AND HOW PRIVATE COMPANIES CAN LEVERAGE IT
“Carbon negativity is our goal,” says Topping, and climate disasters like floods and heat waves “will keep getting worse until we get to net zero.”
Unfortunately, efforts to remedy climate change have been held back by “a very strong oil and gas lobby saying that carbon capture and storage will be the solution” even though there’s been little progress made because most funds invested into carbon capture and storage have gone into enhanced oil recovery.
Ultimately, however, while carbon sequestration can and will be helpful, he says a recovering economy is key — one that “regenerates the stabilizing properties of the climate.”
ON HOW COMPANIES CAN ADOPT TECH TOWARD THEIR NET ZERO AGENDAS
Artificial intelligence (AI) will play a major role in the efforts to reach net zero emissions, says Topping, who notes that digital technologies have “huge benefits in addressing the complexities of the variability you get from having very distributed renewable assets.”
Prior to venturing into AI, the computing power of systems must be acknowledged as they “can help solve problems virtually before you have to build anything that speeds up innovation.”
Topping says there is still a lot of “nonsense” out there about AI “and we're going to have to educate ourselves to make sure we're deploying it for problems where it can really help, not just adding [...] cost.”
ON HOW RISKS RELATED TO DATA PRIVACY AND SECURITY CAN BE MITIGATED
Topping notes that “better governance” is important to mitigating data privacy concerns and that governments should “learn along” with technology instead of giving technology free reign for years “and then try[ing] to retrofit governance” into technological advancements.
He adds: While we can’t expect “governance to be ahead of technology, it needs to be close enough and understand the trajectory to protect society.”
That protection includes “encouraging technologies,” he says, adding that the oil and gas industry has taken great strides to stifle renewable energy technologies and maintain the status quo.
ON THE FUTURE HE ENVISIONS FOR ‘RACE TO ZERO’ AND THE IMPACT ON GLOBAL CLIMATE CHANGE
Topping envisions a healthier economy… without the volatility of fossil fuel prices,” citing efforts in the renewable energy sector.
He also recognizes efforts into “making lives and livelihoods more resilient in the face of these changes,” and these are gaining momentum.
The largest stakeholder to spearhead the changes global society needs is the private sector because “there isn’t enough public finance” to adapt to climate change risks effectively.
