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What is a decarbonized economy?
A decarbonized economy, also known as a low-carbon economy, centers on reducing greenhouse gas emissions, achieved through the decarbonization of energy sources and sectors. This global shift aims to combat climate change, promote renewable energy adoption, and enhance sustainability for a greener future.
Establishing a decarbonized economy is crucial given the challenges posed by worldwide climate change. This comprehensive transformation requires a strategic focus on numerous sectors to significantly reduce carbon emissions, promote sustainable practices, and ensure a greener future for the planet.
The impact of decarbonization on economic growth and sustainability
Decarbonization significantly impacts economic growth and sustainability by fostering innovation and creating green jobs. Transitioning to a decarbonized economy encourages investments in renewable energy, energy efficiency, and sustainable practices, leading to long-term economic resilience. This shift not only helps mitigate climate change but also promotes a healthier environment, enhancing quality of life and ensuring sustainable development for future generations.
The economic transformation: What would change?
In the transition towards a decarbonized economy, key changes include shifting energy sources from fossil fuels to renewables, increasing energy efficiency, and adopting green technologies. Industries will transform, while investment in sustainable infrastructure will rise. This transition aims to reduce greenhouse gas emissions, fostering a sustainable, environmentally responsible economic growth model.
- Energy sector
The cornerstone of decarbonization lies in transitioning from fossil fuels to renewable energy sources. Solar, wind, hydro, and geothermal energy must replace coal, oil, and gas. This shift involves investments in renewable infrastructure, energy storage solutions, and smart grids for efficient distribution and consumption. The energy sector’s successful decarbonization is pivotal for achieving a sustainable world.
- Transportation
Overhauling the transportation sector is paramount. The electrification of vehicles, especially public transportation, is vital. Expanding EV charging networks and investing in battery technology advancements are crucial steps. Additionally, promoting sustainable transport options like cycling and walking can reduce emissions from personal vehicles.
- Industrial decarbonization
Industries are major contributors to emissions. Implementing energy-efficient practices and clean manufacturing technologies is essential. Carbon capture and utilization techniques can mitigate emissions from hard-to-decarbonize industries. Adopting circular economy principles, where resources are reused and recycled, further supports industrial decarbonization.
- Buildings and infrastructure
Retrofitting existing buildings for energy efficiency and integrating renewable energy systems are key components. Developing green building standards and promoting sustainable construction practices contribute to reducing the carbon footprint of buildings. Decarbonizing heating and cooling systems through electrification and renewable energy adoption is critical.
- Agriculture and land use
Agriculture must shift towards regenerative practices that enhance soil health and sequester carbon. Reducing methane emissions from livestock and promoting sustainable land management practices play crucial roles. Afforestation, reforestation, and sustainable forestry practices contribute to the net removal of carbon from the atmosphere.
- Waste management
Enhancing waste reduction, recycling, and composting efforts is vital. Waste-to-energy technologies can convert organic waste into renewable energy, reducing landfill emissions. Minimizing methane emissions from landfills is essential for effective waste decarbonization.
- Water and wastewater
Improving water efficiency and reducing energy consumption in water treatment processes contribute to the decarbonization effort. Exploring renewable energy options for wastewater treatment plants further aligns with the transition to a sustainable economy.
- Finance and policy
Mobilizing finance for sustainable projects and incentivizing green investments is pivotal. Implementing carbon pricing mechanisms creates economic incentives for emissions reduction. Robust policy frameworks and international cooperation ensure a coordinated global approach to decarbonization.
- Innovation and research
Advancements in carbon capture and storage, renewable energy technologies, and sustainable materials are crucial. Robust research and development initiatives drive the innovation needed to accelerate the transition to a decarbonized economy.
Achieving a decarbonized economy necessitates an all-encompassing approach across various sectors, including energy, transportation, industry, buildings, agriculture, waste management, water, finance, policy, and innovation. This collective effort, combined with global cooperation, will pave the way for a sustainable and resilient future, mitigating the impacts of climate change.
Today, we widely acknowledge that to achieve global decarbonization, the world’s economy needs to reach net-zero greenhouse gas emissions by 2050. The Intergovernmental Panel for Climate Change (IPCC) demonstrated in its 2018 review that not only must we zero these emissions by 2050, but they also need to be significantly abated by 2030 if the world is to stay within a global warming trajectory of 1.5-degree.
Moreover, CO2 emissions should notably reduce by 30-50 percent by 2030 compared to the existing levels of today. While power generation represents 45 percent of reviewed emissions, decarbonizing energy for the demand side proves key across all economic activities — buildings and construction, industry, and mobility.
It is also found that — provided the right frameworks and innovative decarbonization strategies are in place — savings on the demand-side are likely to yield additional consumer benefits (in terms of energy costs), hence facilitating rapid adoption. In other words, ‘building back better’ is as much about decarbonizing the economy as about fostering its transformation for the benefit of all.
An effort of such magnitude will necessarily build on all sectors of the economy, as supply and demand almost equally share current emissions. While supply-side emissions have long been under scrutiny, decarbonization of demand represents the major case for change in the coming decade.
Running on thin ice: How can decarbonization help in the fight against climate change?
Decarbonization of the economy seems to be a race against time undeniably. However, the sooner we reduce emissions, the lower the carbon budget depletion, and the higher the chances to remain within global warming limits. 2030 is a critical milestone that requires us to take action now.
While the global conversation has very much revolved on ‘hard-to-abate’ sectors in recent years, short-term action plans should still focus on abating what can be done with current technologies and value chains available, what we refer to here as ‘easy-to-abate’ sectors, contributing significantly to a globally decarbonized economy.
In addition, since most of these sectorial transformations ultimately come at a net benefit for consumers, one can better understand them as critical modernization programs which will not only achieve stringent decarbonization objectives but also fair redistribution, economic growth, and employment opportunities. And, climate change might be a historic opportunity in this regard. But, for that to happen, current policy frameworks must reflect these transformational objectives.
Efforts driving optimal energy management
Organizations are bringing climate change action and decarbonization to the top of their corporate agendas. As stakeholders and investors recognize climate change risks, organizations commit to taking bold climate change action. Therefore, as an increased number of enterprises target carbon reductions, buy renewable energy and activate their value chain toward their sustainability goals, ambitious climate change action and decarbonization strategies continue to emerge across the world.
A few of them are doing this by following simple yet practical decarbonization strategies and processes. This might include:
- Strengthening the regulatory system
- Implementation of energy management systems
- Moving toward renewable energy sources
- Accelerated adoption of efficient technologies
- Energy efficiency financing
We, at Schneider Electric, are collaborating with organizations to assist them in achieving their climate action targets with active energy management, decarbonization of supply chain, our climate change advisory services and much more.
But what does active energy management deal with?
Active energy management deals with analyzing where you are today and where are you heading in terms of decarbonization of energy and global decarbonization. It is a state of market convergence where organizations around the world are benefitting from controlling, optimizing, and financially saving money across their footprint for their supply, demand, and sustainability initiatives. To understand this, let’s take up three of them one by one:
- Supply
This basically concerns with, ‘from where do you buy the energy’, that maybe from utilities, deregulated liberalizing markets, etc. In this, pricing comes into play, thereby assessing the priorities with which you can save money for your footprint.
- Efficiency
This deals with capturing project data, prioritizing energy conservation methods, controlling and optimizing energy consumption on a real-time basis, thus benefitting a cost-saving portfolio.
- Sustainability
This deals with managing resources to achieve goals you have set at the enterprise level or resource mitigation, looking at renewable or clean energy, compliance reporting, and much more.
The role of electrification in achieving a decarbonized economy
Electrification plays a crucial role in achieving a decarbonized economy by transitioning energy consumption from fossil fuels to renewable sources. By enhancing energy efficiency and integrating smart technologies, electrification reduces greenhouse gas emissions across various sectors, including transportation, industry, and residential spaces. This shift not only fosters sustainable growth but also paves the way for innovative solutions to combat climate change.
Collaboration for accelerating decarbonization of energy
Schneider Electric and Walmart Inc. have announced a collaboration that will provide Walmart’s US-based suppliers with increased access to renewable energy, thus enabling them to lead climate change action and decarbonization of energy. This ground-breaking initiative is called the Gigaton PPA (GPPA) Program. It is basically designed to educate Walmart suppliers about accelerating the adoption of renewable energy and renewable energy purchase through aggregate power purchase agreements by participating suppliers.
Achieving climate action targets with efficient energy management
Therefore, energy efficiency has a pivotal role to play in tackling climate change. And, considering the rising level of emissions, decarbonization of energy and achieving energy efficiency has become urgent than ever before. Though achieving these targets soon might seem challenging, it is practically possible to achieve them with the support of coordinated efforts, collaborations and active energy management. So, analyze your current status, set targets for the future, and embark on your journey to achieve climate action and energy decarbonization targets.
