decarbonization

Decarbonization –
The Transition Towards
Low Carbon Economy

Unlocking Economic Opportunities Through Decarbonization

The world is quickly warming and if global temperatures are to be capped at 1.5°C to attain net zero goals by 2050, as per the 2015 Paris Agreement, then rapid Decarbonization is the only way to go.

decarbonization

Benefits of Decarbonization

  • The number one benefit of decarbonization is the effect that it will have on our planet. At present, anthropogenic activity is having an outsized effect on the environment and the flora and fauna which call it home. Reducing harmful emissions will not only curb global warming, but it will bring extreme weather events back under control and ensure that we do not pass a tipping point from which there is no recovery. For the sake of future generations, it’s imperative we decarbonize now.
  • The health effects of a carbon-heavy world are not only quantified by the number of hospitalizations and deaths, but also by the resulting financial impact on the government. Expanding low-carbon technology could provide USD 26 trillion in economic benefits by 2030.
  • There are real public health advantages that will directly impact us and our future generations. After all, employing cutting-edge technologies to track and lower the quantity of pollutants released into the air will not only combat climate change but also improve air quality. Given that air pollution causes over seven million premature deaths worldwide, reducing it will have a significant influence on public health.
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Sustainable Strategies for

Achieving Net Zero Emissions

Decarbonization entails reducing greenhouse gas (GHG) emissions produced by the combustion of fossil fuels. This can be facilitated with the adoption of renewable energy sources such as wind, solar, hydropower, geothermal, and biomass. Improving the overall energy efficiency of vehicles and industries is another way to meet emission targets, improve air quality, and maintain optimum global temperature. Given that air pollution causes over seven million premature deaths worldwide, reducing it will have a significant influence on public health.

Innovations such as AI, IoT, SaaS solutions and cloud-based services provide accurate, quick, and reliable data to engineers so that they can make precise measurements, analyze system behavior, and achieve higher efficiencies. The U.S. Department of Energy recommends minimizing energy waste and upgrading aging facilities for cost-effective decarbonization across light industry manufacturing plants. Therefore, the pillars of decarbonization are improving energy efficiency, electrification, low-carbon fuels, feedstocks, and energy sources (LCFFES), and carbon capture, utilization, and storage (CCUS).

To achieve decarbonization, all aspects of the economy must be considered and transformed right from how energy is generated, to how we produce and deliver goods and services. It may all seem cumbersome, but decarbonization is not unreachable. In fact, it is getting cheaper than ever to go green, thanks to government subsidies and technological innovations. Companies going on the sustainability path are not only doing the right thing for the planet, but they are doing the right thing for their bottom line.

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Turning the Tide of Global Warming with

Renewable Energy Momentum

Renewable energy resources can help minimize the global carbon footprint, but they rely on the weather and other natural elements that are beyond man’s control. Production can’t keep up with demand at all times. The storage of surplus power for later use improves the overall efficiency and reliability of these systems. Electro-thermal energy storage (ETES) systems, Battery energy storage systems (BESS), Liquid air energy storage (LAES), and Compressed air energy storage (CAES) are some of the latest carbon-capturing technologies available in the market. The costs of installation and operation of new renewable energy projects are getting lower than those of coal and natural gas plants by about 10% every year. Switching the global economy to renewable energy might generate savings of over USD 11 trillion by 2050, as per projections.


Focus on Long-term ESG

Goals for Businesses

In November of 2022, world leaders joined forces at the United Nations climate summit called COP27 to commit to creating a more sustainable future on a global scale. At the granular level, this can be achieved with businesses functioning as per ESG standards and putting a framework in place that enables the demonstration of due diligence. Consumers, investors, and employees are increasingly demanding climate responsibility and accountability from organizations. They are being pressurized to disclose and regulate their emissions and targets. Proactive businesses that are preparing themselves for this transition to clean energy will reap financial rewards in the near term, but companies that aren’t investing in decarbonization or have scaled back on efforts to combat climate change will be stuck in reactive mode. Even though organizations do have the capital and resources to achieve a sustainable transition, the level of mobilization necessary to achieve this is still not in place.


Steps Undertaken by

Global Economies to Reduce Carbon Emissions

Various nations have embraced decarbonization efforts, and more than 150 governments have submitted plans to cut carbon emissions by 2030.

  • In recent years, China, Denmark, Ethiopia, and the UK have all reduced their energy intensity at the annual rate of ~4%, which is much higher than the average global rate of 2.3%. This portrays that these countries are marching towards energy efficiency by lowering their energy consumption. All of these countries have established their individual energy efficiency goals and have further put in place a wide range of policy programs coupled with add-on investments.
  • The U.S. Department of Energy (DoE) also released a roadmap for decarbonizing its economy stated “Industrial Decarbonization Roadmap.” The report highlights how the four key pathways can reduce industrial emissions in the manufacturing industry in the nation. Besides this, the report also focuses on singling out energy efficiency as “the most cost-effective option for near-term reductions of greenhouse gas emission.” The report also said that this energy efficiency could be achieved through the implementation of software-driven, smart manufacturing platforms and advanced data analytics.
  • France has banned short-haul flights and the state of California has outlawed gas-guzzling vehicles. The EU is cracking down on emissions from the shipping industry and governments and regulators around the world are getting very serious about climate change.
  • The Inflation Reduction Act (IRA) passed by the US administration has led to the investment of about USD 369 billion to curb climate change. It offers new tax credits for the purchase of electric vehicles, heat pumps, etc.
  • Investments in wind, solar photovoltaics, and geothermal energy are accelerating the decarbonization of electricity in several countries. By 2017, Costa Rica, Denmark, and the UK were all using 20% or more of their energy from non-hydro-renewable sources, up from almost none in 1990. Kenya has also significantly increased its capacity, particularly in the geothermal sector. As the world’s largest market for solar and wind energy, China has had modest growth in renewable energy contributing to the overall electricity demand.

The global economy is marching towards a zero-carbon future. It is high time businesses seized this golden opportunity. Reducing harmful emissions will not only curb global warming, but it will bring extreme weather events back under control and ensure that we do not pass a tipping point from which there won’t be any recovery. For the sake of future generations, it’s imperative that we decarbonize now.

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swara-keni
Swara Keni

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