100 days on from COP26, Invesco research reveals C20 countries will struggle to meet emissions pledges.
Invesco has conducted research to track global efforts to reach net-zero emissions and found that, based on recent trends, only the UK will meet its net-zero target.
The Economic Transition Monitor is the first edition of what will be a regular monitoring of the path to net-zero. Invesco focused on the C20 – the 20 largest CO2 emitter countries – and examined progress against the net-zero targets set by each country. To analyse the likely success of meeting those targets Invesco looked at recent trends in emissions, emissions per capita and the CO2 intensity of economic activity and found:
- Global emissions continue to rise and it’s unlikely temperature change can be limited to 1.5°C. The challenge is to limit by how far that target is exceeded;
- Only the UK will meet its net-zero target (2050) based on recent trends. The UK is the second least CO2 intensive C20 economy, helped by its focus on service industries. Intensity has been gradually falling; the decline over the last 10 years is the fastest among the C20. At current trend, the UK will achieve net zero by 2037;
- Eight C20 countries are still seeing a rise in emissions per capita. These include China, the largest emitter of the C20 and India, which is third largest. These trends will eventually need to be reversed if net-zero is to be achieved;
- Many C20 countries are set to miss their net zero targets including the US, which is projected to reach net zero in 2074, not 2050; Germany, projected to reach net zero in 2067, not 2045; and Saudi Arabia, on track to achieve net zero in 2467, not 2060.
- New technologies will be critical in reducing the CO2 intensity of economic activity, but will need to be shared with poorer countries to avoid the worst climate change outcomes.
Paul Jackson, global head of asset allocation research at Invesco, says: “Governments have an important role to play in achieving climate change goals but the private sector’s behaviour will be critical. Investors can deploy assets in a way that forces, and profits from, change but can also pressure governments to do the right things. This Monitor will benchmark government progress against the goals they have set and examines what the private sector can do to help countries stay on track to reach net zero.
“While consumers have been barraged with a variety of energy saving tips and suggestions on how to minimize their climate impact, the reality is that it is technology, not behavioural changes, that are likely to play the leading role in the economic transition to a cleaner and greener future. Many of these technologies have already been developed, and research continues to design more efficient and alternative technologies – from carbon capture and removal to hydrogen energy, pumped storage hydropower and even blockchain – that have the potential to transform our everyday and industrial lives.”