Zero emission technologies can "outcompete" older carbon-intensive industries across multiple sectors worldwide within a decade, as investors, businesses, governments and consumers demand a shift towards cleaner, greener solutions throughout the 2020s, a fresh analysis has suggested.
Greenhouse gas emissions and global temperatures may have continued to rise in the five years since the Paris Agreement was brokered in 2015, confirmed by the latest edition of the Emission Gap report from the UN Environment Programme. But investment in and deployment of low carbon technologies and solutions has accelerated significantly over the past five years and is poised to surge over the coming decade, according to a major new study from consultancy Systemiq.
The report, "The Paris Effect," details how clean and green solutions are on course to become competitive with dirtier counterparts in sectors accounting for over 70 percent of global emissions by 2030, which could deliver a global green economy capable of generating 35 million jobs and a healthier society.
The projections mark a significant shift from five years ago when there were was almost no green competition to fossil fuels at all, while even today there are only cost competitive solutions in the energy sector, covering a quarter of global emissions, according to the new findings.
The report, which has won backing from a raft of top green business figures, highlights how clean tech development is being aided by the fact countries, cities, regions and companies accounting for over 50 percent of global GDP have net zero emission targets in place.
The same market dynamics that have delivered rapid green progress in energy and road transport are likely to be replicated in other sectors.
As such, while the world is still not on track to limit average temperature-wise to "well below" 2 degrees Celsius, as required under the Paris Agreement, the analysis suggest the net zero transition is rapidly accelerating, and with the right policy support the shift "will come faster than we think," according to Systemiq founding partner Jeremy Oppenheim.
He argued the Paris Agreement and its in-built ratchet mechanism to spur bolder climate action from countries every five years has laid out a clear pathway for 195 nations to decarbonize, helping set the conditions for dramatic progress in low carbon solutions and markets.
"The 'Paris Effect' shows us that the Paris Agreement created a unifying framework for unprecedented climate action," he said. "We shouldn't be misled by 2050 — it will come faster than we think. With the right policy support, zero carbon technologies and business models can outcompete old carbon-intensive industries across multiple sectors by 2030."
"Smart countries, companies, investors and cities know that the balance of risk has shifted," he added. "They want to get ahead of the curve, benefitting from the new jobs, health and value creation opportunities, and not find themselves left behind."
The findings come in a report by the consultancy — founded in 2016 to support progress on the Paris Agreement and UN Sustainable Development Goals (SDGs) — which assesses for the first time the pace and scale of change since the climate treaty was brokered in 2015.
The findings are based on research and analysis of the past five years' economic, social and political trends, and have won widespread backing from a host of top green figures, including former UNFCCC chief Christiana Figueres and leading climate economist Lord Nicholas Stern.
The rapidly falling cost of solar and wind technologies, compounded by the pandemic-driven disruption to oil and gas markets in 2020, mean renewables already are becoming a safer bet for investors than fossil fuels across multiple markets, it notes.
The projections mark a significant shift from 5 years ago when there were was almost no green competition to fossil fuels at all.
Moreover, it argues the pace of electric vehicle development has "repeatedly confounded expectations," with all major car manufacturers scrambling to increase their production of battery cars over the coming decade, leaving diesel and petrol cars as niche products in the 2030s.
And even in hard-to-abate sectors such as heavy industry, agriculture, shipping and aviation, the report sees increasingly competitive low carbon solutions emerging in the decade. For example, 66 zero emission pilots projects are under way in the shipping sector, around 200 electric planes in development, and green pilot projects taking place in the steel and cement industries, it notes.
The same market dynamics that have delivered rapid green progress in energy and road transport are likely to be replicated in other sectors, bringing them closer to market tipping points in the next five to 10 years, it states.
Stern, professor of economics and government and chair of the Grantham Research Institute on Climate Change and the Environment at LSE, said acting too slowly to decarbonize translated into "massive and costly climate risk" and could see economies falling behind in the transition.
"That wave is already gathering pace and will become a dominant force in growth and transformation over this decade," he said. "Wise policy makers and investors will aim for the opportunities, jobs and resilience that can be delivered only through a net-zero economy."
Others endorsing the findings include EU Commission vice president Franz Timmermans, World Economic Forum founder and director Klaus Schwab, former Unilever CEO Paul Polman and European Climate Foundation CEO and key Paris Agreement architect Laurence Tubiana.
The findings echo those of separate research last week by consulting giant McKinsey, which estimates the European Union could achieve net zero emissions by 2050 at zero cost, while also yielding a net gain of 5 million jobs.
In order to secure the most cost-efficient pathway to net zero over the next decade without compromising prosperity across the EU, decisive, collective action from all countries in the bloc will be crucial.
Decarbonization likely would raise the cost of doing business in some sectors — such as aircraft, shipping and industry — but it also would result in savings in others that would make up the difference, the consultancy giant argued. And while the net zero transition could eliminate 6 million jobs as industries shift onto a greener footing, around 11 million new jobs would be created.
However, in order to secure the most cost-efficient pathway to net zero over the next decade without compromising prosperity across the EU, decisive, collective action from all countries in the bloc will be crucial, according to McKinsey's analysis.
"Advances over the last decades have put climate neutrality within reach," it states. "But laying the foundation in the next decade will be critical to achieving this goal."
Both reports are also echoed by the landmark decarbonization plan published by the U.K.'s Climate Change Committee, which detailed how the U.K. could up the pace of emissions reduction over the next decade and deliver net zero emissions by 2050 at a significantly lower cost than previously estimated.
Immense challenges remain, but there is suddenly growing evidence that the Paris Agreement is starting to work precisely in the way its architects hoped it would.