Category: net zero

How Environmental Markets Advance Net Zero



Environmental Markets Part 1 of 3
ESG Data Part 2 of 3
Sustainability Indices Part 3 of 3

The following content is sponsored by ICE.

How Environmental Markets are Advancing Net Zero

How Environmental Markets Advance Net Zero

In 2021, roughly 20% of global carbon emissions were covered by carbon pricing mechanisms.

Meanwhile, the global price of carbon increased 91%, bolstered by government, corporate, and investor demand. This puts traditional fuel sources at a disadvantage, instead building the investment case for renewables.

This infographic from ICE, the first in a three part series on the ESG toolkit, explores how environmental markets work and their role in the fight against climate change.

What are Environmental Markets?

First, meeting a goal of net zero carbon emissions involves limiting the use of the world’s finite carbon budget to meet a 1.5°C pathway.

Achieving net zero requires us to:

  • Change how we utilize energy and transition to less carbon-intensive fuels
  • Put a value on the conservation of nature or “natural capital” and carbon sinks, which accumulate and store carbon

Environmental markets facilitate the pathway to net zero by valuing externalities, such as placing a cost on pollution and placing a price on carbon storage. This helps balance the carbon cycle to manage the carbon budget in the most cost-effective manner.

What Is the Carbon Budget?

To keep temperatures 1.5°C above pre-industrial levels, we have just 420 gigatonnes (Gt) of CO₂ remaining in the global carbon budget. At current rates, this remaining carbon budget is projected to be consumed by 2030 if no reductions are made.

Carbon Budget1.5°C1.7°C2.0°C
Remaining GtCO₂4207701270
Consumed GtCO₂ (Read more...)

How Far Are We From Phasing Out Coal?


This post is by Bruno Venditti from Visual Capitalist


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How Far Are We From Phasing Out Coal?

How Far Are We From Phasing Out Coal?

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.

At the COP26 conference last year, 40 nations agreed to phase coal out of their energy mixes.

Despite this, in 2021, coal-fired electricity generation reached all-time highs globally, showing that eliminating coal from the energy mix will not be a simple task.

This infographic shows the aggressive phase-out of coal power that would be required in order to reach net zero goals by 2050, based on an analysis by Ember that uses data provided by the International Energy Agency (IEA).

Low-Cost Comes at a High Environmental Cost

Coal-powered electricity generation rose by 9.0% in 2021 to 10,042 Terawatt-hours (TWh), marking the biggest percentage rise since 1985.

The main reason is cost. Coal is the world’s most affordable energy fuel. Unfortunately, low-cost energy comes at a high cost for the environment, with coal being the largest source of energy-related CO2 emissions.

China has the highest coal consumption, making up 54% of the world’s coal electricity generation. The country’s consumption jumped 12% between 2010 and 2020, despite coal making up a lower percentage of the country’s energy mix in relative terms.

Top Consumers2020 Consumption (Exajoules)Share of global consumption
China ??82.354.3%
India ??17.511.6%
United States ??9.26.1%
Japan ??4.63.0%
(Read more...)

The Surge in Climate Risk Reporting



The following content is sponsored by the Carbon Streaming Corporation

 

Climate Risk Reporting

The Briefing

  • The Task Force on Climate-related Financial Disclosures (TCFD) provides a global framework for organizations to disclose climate-related risks and opportunities.
  • Since 2018, the number of TCFD supporters has grown five-fold.
  • Over 1,000 financial institutions support the TCFD, representing $194 trillion in assets.

The Surge in Climate Risk Reporting

An average of $2.5 trillion—or 1.8% of global financial assets—would be at risk from climate change if global temperatures rise over 2.5℃ by 2100.

Given that climate change imposes a risk to the world’s assets, reporting on climate-related risks and opportunities is becoming front and center for organizations amid growing pressure from investors and governments.

The Task Force on Climate-related Financial Disclosures (TCFD), created by the Financial Stability Board (FSB) in 2015, provides a global framework for such disclosures. This graphic sponsored by Carbon Streaming Corporation charts the rapid growth in support for climate risk reporting under the TCFD framework.

The Support for Climate-related Disclosures

The number of organizations supporting TCFD has grown five-fold in just three years, at an average annual rate of 73%.

YearNumber of TCFD SupportersCombined Market Capitalization
2018513$8T
2019785$9T
20201,512$13T
20212,616$25T

As of 2021, over 2,600 organizations supported the TCFD framework, with a combined market capitalization of $25 trillion. These organizations span 89 different countries and jurisdictions, highlighting the global support for climate risk reporting.

Additionally, 1,069 or nearly 41% of (Read more...)

The Impact of Carbon Removal Technologies



The following content is sponsored by the AFRY

Carbon Removal Technologies

The Impact of Carbon Removal Technologies

According to climate scientists worldwide, global warming and the inevitable climate change can lead to severe catastrophic disasters. The only way to avoid this is to reduce greenhouse gas and carbon dioxide (CO2) emissions.

According to the Intergovernmental Panel on Climate Change (IPCC), the global temperature rise must be limited to 1.5oC. To achieve this, current CO2 emissions must drop by 50% by 2030 and reach net-zero by 2050.

The following infographic by AFRY showcases how carbon removal technologies help facilitate the reduction of environmental CO2 emissions and the role companies play in helping achieve these goals.

How Carbon Offset Technologies Can Help

The most common way to reduce CO2 emissions is through carbon offset technologies, namely avoided emissions and carbon removal. Though they serve a similar purpose, these two methods are fundamentally different.

One metric ton of CO2 is reduced or avoided for every metric ton of CO2 emitted in avoided emissions. This still leads to a positive increase in emissions overall.

On the other hand, carbon removal technologies completely remove and store one metric ton of CO2 for every metric ton of CO2 emitted.

Carbon removal technologies have a distinct advantage over the avoided emissions. For this reason, they could be the future of CO2 emissions reduction. They are divided into short-term and long-term methods based on the CO (Read more...)

Irrecoverable Carbon: The Importance of Preventing Deforestation



The following content is sponsored by the Carbon Streaming Corporation

 

Irrecoverable Carbon

The Briefing

  • Researchers have identified natural places that the world cannot afford to lose due to their irreplaceable carbon reserves, known as “irrecoverable carbon”
  • Nearly 50% of global irrecoverable carbon is found in forests

Irrecoverable Carbon: Preventing Deforestation

The Earth is home to some natural ecosystems that function as carbon vaults, storing massive amounts of carbon. Researchers developed the concept of “irrecoverable carbon” to identify areas on the basis of three criteria relevant for conservation:

  1. Manageability: How they can be influenced by direct and local human actions
  2. Vulnerability: The magnitude of carbon lost upon disturbance
  3. Recoverability: The recoverability of carbon stocks following loss

Applying the three criteria across all ecosystems reveals that some places contain carbon that humans can manage, and if lost, could not be recovered by 2050, when the world needs to reach net-zero.

The above graphic sponsored by Carbon Streaming Corporation charts global irrecoverable carbon by land area, highlighting important ecosystems that function as carbon sinks.

Breaking Down the Earth’s Irrecoverable Carbon

According to researchers Noon, M.L., Goldstein, A. et al., natural ecosystems contain around 139.1 ± 443.6 gigatonnes (Gt) of irrecoverable carbon globally. (Because the amount of stored carbon cannot be negative, the researchers restrained the uncertainty to 0–582.7 Gt.)

Here’s a breakdown of global irrecoverable carbon by ecosystem type:

EcosystemTotal Irrecoverable Carbon (Gt)% of Global Total
Tropical and subtropical forest41.129.5%
Boreal and temperate peat23.416.9%
Tropical (Read more...)

Financing a Net-Zero Future with Carbon Credit Streaming



The following content is sponsored by Carbon Streaming Corporation.

Financing a Net-Zero Future with Carbon Credit Streaming

Financing a Net-Zero Future with Carbon Credit Streaming

The world is advancing towards a net-zero carbon future, but achieving it will require a larger role for carbon credits.

A carbon credit is a tradeable certificate that represents one metric ton of carbon dioxide (CO2) or the CO2 equivalent (CO2e) of another greenhouse gas (GHG) that is prevented from entering the atmosphere or is removed from the atmosphere. Organizations purchase and use these certificates to offset their emissions that are difficult to reduce or control.

This infographic sponsored by Carbon Streaming Corporation explains how the company is funding the fight against climate change by bringing the streaming model—traditionally used in mining and energy—to the growing market for carbon credits.

The Rising Need for Climate Action

Global GHG emissions have risen alongside the expansion of industries and economies.

Since the Industrial Revolution, atmospheric concentrations of CO2 have increased at a rate at least 10 times faster than at any other time during the last 800,000 years. Consequently, global surface temperatures have risen, bringing the world closer to the devastating effects of climate change.

According to the latest United Nations Emissions Gap Report, limiting global temperature rise to 1.5°C requires a 50% reduction in GHG emissions by 2030 relative to current levels. While attaining this goal seems difficult, carbon credits can help get us closer to it.

What are Carbon Credits, and How Can They Help?

Carbon (Read more...)

Why the Demand Outlook for Carbon Credits Is Bright



The following content is sponsored by the Carbon Streaming Corporation.

 

Carbon Credits

The Briefing

  • Demand for carbon credits (also referred to as carbon offsets) is poised to skyrocket as corporations aim to meet climate goals.
  • By 2050, demand for carbon credits could rise up to 100-fold.

Why the Demand Outlook for Carbon Credits Is Bright

More than ever, carbon credits are playing a critical role in tackling climate change.

Based on demand projections for carbon credits, the voluntary carbon market could grow up to 100-fold by 2050. Voluntary carbon markets are where carbon credits can be purchased by those that voluntarily want to offset their emissions.

In this graphic sponsored by Carbon Streaming Corporation, we show two demand scenarios in voluntary carbon markets:

 NGFS scenarios (GtCO₂)NGFS “immediate action” 1.5°C pathway scenario (GtCO₂)*
20200.10.1
2030E1.52.0
2050E<7<13

*With carbon dioxide removal
Source: McKinsey, NGFS = Network for Greening the Financial System

First, one gigaton is equal to one billion metric tons of CO₂— or one trillion kilograms.

According to the forecast from McKinsey, annual global demand for carbon credits could reach up to 1.5 to 2 billion metric tons of carbon dioxide by 2030 and up to 7 to 13 billion metric tons by midcentury.

This has steep implications for the voluntary carbon market: McKinsey estimates that in 2020 just a fraction of these totals were retired by buyers, at roughly 95 million metric tons.

How Do Carbon Credits Work?

A carbon credit represents one metric ton of greenhouse gas (GHG) emissions.

As companies contend with time and technological gaps in reducing their emissions, they purchase carbon credits to help offset their emissions. These purchases are facilitated by brokers who connect corporate buyers with project developers.

Project developers create carbon offset projects, such as protecting mangroves or reforestation. These projects, in turn, generate carbon credits.

Some projects also advance multiple United Nation Sustainable Development Goals by providing additional economic, social, educational, or biodiversity benefits.

Here is the transaction volume and value of the voluntary carbon markets.

YearVolume (MtCO₂e)Value (USD)
2021239$748M
2020188$473M
2019104$320M

Source: Ecosystem Marketplace, through Aug 31, 2021

In 2021, the value of the voluntary markets is projected to reach $1 billion— a record high. Driving this demand are corporate net-zero commitments, among other factors.

For instance, 1,565 companies with $12.5 trillion in revenue have set net-zero targets. Not only that, the 128 signatories of the Net-Zero Asset Managers Initiative, that represent $43 trillion in managed assets, are committed to supporting the goal of net-zero GHG emissions by 2050 or sooner.

As bold action is being increasingly expected from shareholders, carbon credits will likely play a greater role in corporate climate strategy.

Where does this data come from?

Source: McKinsey, ‘A blueprint for scaling voluntary carbon markets to meet the challenge,” January 2021.

The post Why the Demand Outlook for Carbon Credits Is Bright appeared first on Visual Capitalist.

Smashing Atoms: The History of Uranium and Nuclear Power



The following content is sponsored by the Sprott Physical Uranium Trust

uranium and nuclear power infographic

The History of Uranium and Nuclear Power

Uranium has been around for millennia, but we only recently began to understand its unique properties.

Today, the radioactive metal fuels hundreds of nuclear reactors, enabling carbon-free energy generation across the globe. But how did uranium and nuclear power come to be?

The above infographic from the Sprott Physical Uranium Trust outlines the history of nuclear energy and highlights the role of uranium in producing clean energy.

From Discovery to Fission: Uncovering Uranium

Just like all matter, the history of uranium and nuclear energy can be traced back to the atom.

Martin Klaproth, a German chemist, first discovered uranium in 1789 by extracting it from a mineral called “pitchblende”. He named uranium after the then newly discovered planet, Uranus. But the history of nuclear power really began in 1895 when German engineer Wilhelm Röntgen discovered X-rays and radiation, kicking off a series of experiments and discoveries—including that of radioactivity.

In 1905, Albert Einstein set the stage for nuclear power with his famous theory relating mass and energy, E = mc2. Roughly 35 years later, Otto Hahn and Fritz Strassman confirmed his theory by firing neutrons into uranium atoms, which yielded elements lighter than uranium. According to Einstein’s theory, the mass lost during the reaction changed into energy. This demonstrated that fission—the splitting of one atom into lighter elements—had occurred.

“Nuclear energy is incomparably greater than the molecular energy which we (Read more...)

Net-Zero Emissions: The Steps Companies and Investors Can Consider


This post is by Jenna Ross from Visual Capitalist


Net-Zero emissions

The Steps to Net-Zero Emissions

To help prevent the worst effects of climate change, a growing number of companies are pledging to achieve net-zero emissions by 2050. In fact, the percentage of companies declaring a net-zero target nearly doubled from 2019 to 2020.

With urgency building, how can companies and investors approach net-zero emissions? The above infographic from MSCI highlights the steps these two groups can take, from defining a strategy to reporting progress.

Net-Zero Emissions: A Clear Process

Setting a net-zero emissions target means reducing carbon emissions to the greatest extent possible, and compensating for the remaining unavoidable emissions via removal.

Companies and investors can take four broad steps to move toward their targets.

1. Define Strategy

To begin, companies can measure current emissions and identify priority areas where emissions can be reduced. For example, ABC chemical company determines that its greenhouse gas (GHG) emissions far exceed those of its competitors. In response, ABC chemical company prioritizes reducing GHG emissions during material processing.

Similarly, wealth and asset managers can assess climate risks:

  • Risks of transitioning to a net-zero economy
  • Risks of extreme weather events

They can then map out a strategy to curb climate risk. For example, XYZ asset manager determines that 33% of its portfolio may be vulnerable to asset stranding or some level of transition risk. XYZ decides to lower its transition risk by aligning with a 1.5 degrees Celsius (2.7 degrees Fahrenheit) warming scenario.

2. Set Target

With a strategy set, companies can pledge their net-zero (Read more...)

A Complete Visual Guide to Carbon Markets



The following content is sponsored by Carbon Streaming Corporation.



Carbon

A Complete Visual Guide to Carbon Markets

Carbon markets enable the trading of carbon credits, also referred to as carbon offsets.

One carbon credit is equivalent to one metric ton of greenhouse gas (GHG) emissions. Going further, carbon markets help companies offset their emissions and work towards their climate goals. But how exactly do carbon markets work?

In this infographic from Carbon Streaming Corporation, we look at the fundamentals of carbon markets and why they show significant growth potential.

What Are Carbon Markets?

For many companies, such as Microsoft, Delta, Shell and Gucci, carbon markets play an important role in offsetting their impact on the environment and meeting climate targets.

Companies buy a carbon credit, which funds a GHG reduction project such as reforestation. This allows the company to reduce their GHG emissions over a given time frame. There are two main types of carbon markets, based on whether emission reductions are mandatory, or voluntary:

Compliance Markets:
Mandatory systems regulated by government organizations to cap emissions for specific industries.

Voluntary Carbon Markets:
Voluntary systems where carbon credits can be purchased by those wanting to offset their emissions.

As demand to cut emissions intensifies, voluntary carbon market volume has grown five-fold in less than five years.

Drivers of Carbon Market Demand

What factors are behind this surge in volume?

  • Paris Agreement: Companies seeking alignment with these goals.
  • Technological Gaps: Companies are limited by technologies that are available at scale (Read more...)