When the IPCC released its Fifth Assessment Report earlier this spring, its message was clear: We must do much more to reduce greenhouse gas emissions in order to keep below 2°C and limit climate change’s impacts. If we continue on a business as usual path, inclusive of accounting for reductions we have achieved to date, the world will exhaust our ‘carbon budget’ by 2045, resulting in a global average temperature change well in the 3.7°C to 4.8°C range by 2100, so long Amazon rainforest. We have already realized a global average 0.8°C change, which is resulting in significant, devastating and costly severe weather events, most recently covered by the NY Times, and even if we are to hit the recommended IPCC 2°C change, this would be twice as ‘bad’ as things are today. But most importantly, the IPCC concluded that the window to achieve the 2°C change has not yet passed, but we must act now.
By presenting the current science, impacts, and options for addressing climate change, the IPCC has laid the groundwork for governments and the private sector to start taking more ambitious action. Given that time is of the essence, the fastest route towards reduction is for the private sector is to align its own operating plans with larger climate goals.
Setting greenhouse gas (GHG)-reduction targets has become common practice for many companies, but they generally take a conservative approach that is independent of what climate scientists say is necessary; rather they set targets based on expected emissions reductions from planned projects, which can limit innovation and ambition, or they look to peers and may simply set a top-down goal normalized by sales, that while potentially aspirational, doesn’t drive absolute reductions.
The topic of science-based climate targets has increasingly received attention over the last few years, with only a handful of firms adopting aggressive science-based targets list Ford, Autodesk, EMC and British Telecom. Also referred to as Context-based Metrics, the point here is to use the targets that climate science has now identified to keep global temperature rise below 2°C and allocate the amount of reductions required equitably between countries and companies based on their pro-rata share and/or contribution. In other words, how much do climate scientists and the IPCC recommend reducing emissions in order to avoid the worst impacts of climate change, and how can we meet that challenge, rather than basing goals on reduction projects a company has in the pipeline. To move industry forward to setting these goals, three of the world’s leading non-governmental organizations have partnered together to establish a clear, consistent and straight-forward methodology, entitled the “Mind the Science, Mind the Gap” initiative which seeks to raise the ambition of corporate target-setting levels and drive bolder business solutions.
To publicly launch the initiative, in late May, WWF, World Resources Institute and CDP organized a one day workshop in Washington DC to learn about and provide input into the new methodology. The first phase of the project includes developing a target-setting methodology that allows companies to set credible, science-based GHG emissions reduction targets on a company-wide level—with as little effort as possible and consistent with the IPCC 2 °C scenario. WRI, CDP, and WWF will develop a guidance document that will be published at the end of 2014 which will:
- review available science-based goal setting methods
- recommend how to choose the most appropriate approach, and
- describe ways to practically implement the method within a company.
The current Target-Setting Methodology at a glance:
- Allocates global carbon budget using a sector-based method
- Helps companies set absolute GHG emissions reduction targets
- Uses both physical units and value added to set intensity targets
- Applicable to all companies, from all sectors
The second phase of the project, to be launched in 2015, will include outreach and engagement with companies on goal-setting as well as additional activities to track companies’ performance.
Following a number of set up presentations at WRI’s offices in DC by WWF, CDP and Kevin Moss of BT and Emma Stewart of Autodesk, Giel Linthorst from Ecofys, a consultancy contracted to help coordinate the methodology development, led the audience through the current approach to the target setting standard which bases its allocation on mainly physical indicators, complementing the existing publicly available methodologies which use economic indicators as allocation basis. This was followed with a lengthy debate and discussion about how to improve the approach and data inputs throughout the afternoon. For better or worse, the core of the target setting approach relies upon the power sector to achieve a nearly unthinkable 97% reduction in its own carbon emissions intensity by 2050. All other sectors are reliant upon the power they will use to be increasingly decarbonized and renewable over time to allow them to phase in efficiency reductions in the face of setting, admittedly, very aggressive absolute goal reductions. The bottom line for our society is if we don’t clean up our power, no amount of efficiency reductions will be enough to reach a 2°C scenario and real, hard work is going to be needed to set aggressive absolute reductions.
And as if on cue, on Monday last week, President Obama unveiled the latest — and likely greatest — emissions reduction policy since he announced his Climate Action Plan last year: new rules to limit carbon dioxide pollution from existing power plants. With power plants accounting for around one-third of U.S. emissions, these rules will address the country’s single-largest source of greenhouse gas pollution and the keystone piece required to achieve emissions reductions across the entire economy. Along with standards for new power plants, rules addressing methane emissions, and measures promoting energy efficiency, the forthcoming standards illustrate the way in which the president is using existing legislative authority to put the United States on a path toward meeting short-term and long-term climate commitments.