The future of net-zero carbon emissions

Climate change is an established threat that will only grow over time as reaching global net-zero emissions is an important element to address this danger.

At the same time, there is a fundamental political and economic obstacle to achieving net-zero carbon emissions by the middle of the century. For the developing world and emerging markets — notably China, India, and Russia — an overwhelming reliance on hydrocarbons will have to be addressed.

The scale of change required by the energy transition to reach net-zero carbon emissions is daunting if it is intended to only focus on a shift to renewable energy.

Consequently, this move away from hydrocarbons presents an enormous short-term fiscal cost, with consequent political ramifications. For the developing world, the need for sustained economic expansion creates significant constraints on how resources can be deployed, and the economic fragility during the COVID-19 recovery compounds this dilemma.

Displacement of hydrocarbons not only implies new installations of renewable energy (which is increasingly cost-competitive), but also the costly replacement of existing power generation and vehicle fleets on a massive scale. This challenge limits countries’ willingness to commit to net-zero targets that are based on a clearly articulated and credible plan to achieve such targets, when the political payoff for immediate investment will not be realized for decades.

A recent King Abdullah Petroleum Studies and Research Center study has simulated the geopolitical pressures (implicit and explicit) around net-zero targets, using the KAPSARC Toolkit for Behavioral Analysis to forecast the future trends of international commitments. Interstate relations around climate change involve explicit dialogue around events (e.g. COP26 in Glasgow) and implicit pressure based on national commitments and diplomatic signaling.

The modeling focuses on the global trends among countries most critical to the global consensus on climate change. The results of this analysis present an optimistic picture tempered by pragmatism, resulting in a collective shift toward more concrete support of a net-zero future.

The EU, the UK, and Western European economies have made the most concrete and sweeping commitments to net zero. Yet even among these countries, the political challenge and cost of achieving extremely ambitious goals have kept limits on the scope and concreteness of commitment. Indeed, plans for the most progressive European ambitions range from “acceptable” to “average” in the Climate Action Tracker’s ratings. When judged alongside evaluations by the World Resource Institute’s Climate Watch, these commitments fall short of a “sure thing” to achieve their stated objectives.

In the EU, the Polish economy, for example, relies heavily on its domestic coal reserves, and its willingness to forego the economic gains from this natural resource endowment keeps its commitments limited.

The US has declared its commitment for a 2050 net-zero target under President Joe Biden’s administration, though the plan to achieve this goal remains unclear without Congressional support. China has articulated its commitment for a 2060 net-zero target, though with a pragmatic balancing of the scope and details of its commitment. Russia has declared a 2060 net-zero strategy, but will carefully balance economic and climate priorities to finalize a plan that can be implemented.

Saudi Arabia announced its commitment to net zero emissions by 2060. Much of the developing world takes a much more cautious approach to net-zero, at most signaling consideration of a target.

Net-zero commitments are tempered by the reality of how to achieve ambitious climate goals. Hydrocarbons will almost certainly play a role for the foreseeable future. A pragmatic approach to net-zero emissions will have to include managing carbon and related emissions, along the lines of the circular carbon economy approach.

Growing support for a global net-zero outcome by Saudi Arabia, UAE, China, Russia, and other carbon “heavyweights” helps provide focus on an attainable path.

Equitable redistribution of burden and benefits of the global energy transition is needed to make such a path possible. China is a critical political anchor to secure support from the developing world — its advocacy on the net-zero debate is an important symbol given its own need to balance economic growth with a radical adjustment to its approach to the emission of greenhouse gases.

Based on our simulation analysis, we expect China to build support for a balanced and pragmatic approach to net-zero targets in the developing world.

In turn, the US and non-European developed countries are expected to see the value of aligning with this approach. Beyond COP26, South Korea and Japan are expected to remain committed to their current net-zero targets and plans. Notably, the UK, EU, France, and Germany are expected to remain steadfast in their current 2050 net-zero targets and associated plans.

During the Saudi Green Initiative in Riyadh, Saudi Crown Prince Mohammad bin Salman announced the Kingdom’s goal is to reach net-zero emissions by 2060, utilizing a package of initiatives in the Circular Carbon Economy approach.

Over time, our analysis anticipates an enhancement of the Kingdom’s current stated ambitions, enshrining its announced commitment in policy documents while providing a more concrete articulation of how its CCE initiatives will achieve its ambitions.

China is expected to continue to enhance the concreteness and scope of its own commitments, with the majority of the developing world aligning with the Chinese approach. Over time, while EU countries will continue to move forward on their ambitious climate goals, the political clout of China will be the key driver for additional commitments from the rest of the world to achieve net-zero carbon emissions. The support of Saudi Arabia serves to enhance the scope of expected pragmatic commitments in the geopolitical dialogue.

• Brian Efird is the program director for policy and decision science and a senior research fellow at KAPSARC. Nourah Al Hosain also contributed.