Further to COP 21, most countries have translated their commitments to the Paris Agreement into laws, policy documents and national targets, and these are evolving and being updated constantly. For instance, at the Climate Action Summit in September 2019, 77 countries, ten regions and more than 100 cities committed to net-zero carbon emissions by 2050. By June 2020, more than 20 countries and regions had progressed from simple commitment to full adoption of net-zero targets: Austria, Bhutan, Chile, Costa Rica, Denmark, the E.U., Fiji, Finland, France, Germany, Hungary, Iceland, Ireland, Japan, the Marshall Islands, New Zealand, Norway, Portugal, Singapore, Slovenia, Spain, Sweden, Switzerland, Suriname and the United Kingdom. Moreover, as of June 2020, 120 countries are committed to working on net-zero targets through the Climate Ambition Alliance.
Given their weight in global emissions, we provide below an update on China, the U.S. and the E.U.
- As of December 2019, China claimed to have met its carbon intensity target further to the Copenhagen Accord which was signed by participants of COP 15 in 2009. At that time, China aimed to lower its carbon intensity by 40-45% by 2020 (from 2005 levels). The country’s new climate goal, further to the Paris Agreement, is to lower carbon intensity by 60-65% and to have its total emissions peak by 2030. It is likely this ‘peak emissions’ target is no longer acceptable to the international community and will be constrained via carbon-footprint trade tariffs or net zero supply chain requirements by vendors and retailers purchasing Chinese finished goods.
- There are high expectations that China’s Emission Trading Scheme (ETS) will be up and running by the end of 2020.
- The 14th Five Year Plan (2021-2025) is expected to set a more ambitious goal to increase energy produced from non-fossil fuel sources to at least 20% by 2030 (from 15% in 2020, as per the 13th Five Year Plan).
- Autos: In October 2019, China announced its draft EV development plan for 2021-35; the targets for EV sales as a % of total auto sales are 20% by 2025 and 40% by 2030, compared to 4.7% in 2019.
After the current Administration withdrew from the Paris Agreement, federal and state targets and policies have had conflicting objectives.
- As of June 2020, 23 states and the District of Columbia have implemented state-wide greenhouse gas (GHG) reduction targets (see full table in the appendix).
- California has long been acting to curb GHG emissions through the state’s Global Warming Solutions Act of 2006, legislation AB 32, which mandates a reduction in California’s man-made GHG emissions (1.4% of global emissions in 2004) to 1990 emission levels by 2020. Subsequent bills aim for GHG emissions to be 40% below 1990 levels by 2030 and 80% below 1990 levels by 2050. California has also introduced a new building code (effective January 2020) that requires new single-family and multi-family homes up to three stories high to have a solar photovoltaic system.
- Politics aside, it is worth noting the proposals of U.S. Democratic Presidential candidate Joe Biden:
- Eliminate carbon pollution from power plants by 2035.
- Install 500 million solar panels, including eight million solar roof and community solar energy systems, and 60,000 onshore and offshore wind turbines that are manufactured in America
- Net-zero emissions for all new buildings by 2030, on the pathway to a 100% clean building sector
- Retrofit four million buildings, prioritizing hospitals, schools, and municipal buildings
- Retrofit two million households making energy saving upgrades
- Advance appliance and equipment efficiency standards
- Transition the entire fleet of 500,000 school buses to American-made, zero-emission alternatives within five years
- Transition 3 million vehicles in the federal, state, and local fleets to zero-emission vehicles
- Install at least 500,000 public charging stations
- Re-join the Paris Climate Agreement and announce a more ambitious Nationally Determined Contribution (climate pledge to reducing emissions) by 2030
- Autos: In 2018, the Environmental Protection Agency cancelled the planned 2022-25 fuel economy standards for passenger cars and light trucks. California set its own targets for a 3.7% annual reduction in emissions through 2026. In July 2020, 15 states and the District of Columbia announced a joint memorandum of understanding to ensure that 100 percent of all new medium- and heavy-duty vehicle sales be zero-emission vehicles by 2050 with an interim target for 30 percent zero-emission vehicle sales by 2030.
- The E.U. formally ratified the Paris Agreement on 5 October 2016, thus enabling its entry into force on 4 November 2016.
- The E.U. 2020 climate & energy package (enacted in 2009) was a set of binding legislation to ensure the E.U. meets its climate and energy targets for the year 2020. The package set three key targets:
- 20% cut in greenhouse gas emissions (from 1990 levels)
- 20% of E.U. energy from renewables
- 20% improvement in energy efficiency
- The E.U. then introduced the 2030 climate and energy framework which includes E.U.-wide targets and policy objectives for the period from 2021 to 2030. Key targets for 2030 are:
- At least 40% cut in greenhouse gas emissions (from 1990 levels)
- At least 32% of E.U. energy from renewables
- At least 32.5% improvement in energy efficiency
- The European Green Deal aims for the E.U. to be climate-neutral by 2050.
- Finally, in June 2020, the European Parliament has adopted the Taxonomy Regulation, a classification system for sustainable economic activities. This will allow investors to identify and direct investments into sustainable activities.
- Autos: In 2020/21, a new carbon limit of 95g/km has been introduced across the region with penalties for any manufacturer failing to meet the regulation.