Of all the member countries of the United Nations, only Bhutan in Asia and Suriname in South America absorb more carbon emissions than they emit. Of the remaining nations, all but six are now signed up to the Paris Climate Agreement after President Biden issued his first set of executive orders last week. Those six left out in the cold, or should that be heat, are Turkey, the oil-exporting countries of Iran, Iraq and Libya and those struggling with civil war, namely Yemen and South Sudan. Combined this small group of countries account for approximately 4% of global greenhouse-gas emissions.
Not content with just re-joining the Paris Accord the new U.S. administration has also declared its intention to reach net-zero-carbon emissions in the power sector by 2035 and 2050 for the overall economy. This means the United States will be joining a slightly more elite club of just over 125 nations who have already set into law or are working toward that goal to reach net-zero-greenhouse gas emissions by 2050 or before, with China the outlier at 2060.
This club has humble origins, dating back to June 2017, when Sweden was the first country to declare the pledge to reach carbon neutrality by 2045. Two years later G7 members France and the UK joined the club, two emission heavyweights. Since then wave upon wave of new countries have joined increasing the share of global gross domestic product (GDP) covered by net-zero-carbon commitments – with a noticeable acceleration since the onset of the coronavirus pandemic.
While China's net-zero ambition stretches out to 2060, hope might be at hand if the city of Shanghai is a guide. At this week's 15th Shanghai Municipal People's Congress, the mayor declared the city aiming to reach a peak in CO2 emissions by 2025, five years ahead of national targets. With China continuing to top the league table when it comes to annual-clean-energy investment, more positive surprises could be in store.
However, keeping country ambitions credible will require constant monitoring and more forceful government action. One example appeared in this week's Climate Adaptation Summit and funding to the UN Green Climate Fund. Under the Trump administration, the Fund suffered a funding shortfall from the U.S. government of 2 billion dollars, but to keep pace with other country pledges, it is estimated the United States would now need to inject three times that shortfall to keep up with their European counterparts. Let's see how this plays out.
* Another source of net zero commitments is captured by the Energy & Climate Intelligence Unit which tracks not just countries, but also states and city commitments. For details of their 2020 scorecard please see here: https://eciu.net/netzerotracker
Sources: DWS Investment UK Ltd analysis as of 01/2021; IMF World Economic Outlook database as of 10/2020
3 . The Biden Plan for a clean energy revolution and environmental justice http://www.joebiden.com
4 . The State Council (25 January 2021). Shanghai aims to see carbon dioxide emissions peak by 2025 http://english.www.gov.cn/news/topnews/202101/25/content_WS600dfeb0c6d0f72576944712.html
5 . BNEF (January 19, 2021). Energy transition investment hit US$50 billion in 2020 – for first time https://about.bnef.com/blog/energy-transition-investment-hit-500-billion-in-2020-for-first-time/