CO2 reduction pathways slightly modified and marginally less ambitious
The Intergovernmental Panel on Climate Change has once again warned of the drastic effects of climate change in the recently published so-called Synthesis Report and pointed out that there is a comparatively high probability that the 1.5-degree limit could already be exceeded in the coming decade. In addition, it is reported that climate change has recently progressed somewhat faster than most projections had previously assumed.
In the reporting on the latest publication of the Intergovernmental Panel on Climate Change, however, it was somewhat overlooked that it also included recalculations of the possible CO2 reduction pathways, each of which would lead to compliance with the 1.5 degree target in the long term. These paths are not only of academic significance – quite the contrary. From these pathways it is possible to derive how large the residual budget of CO2 equivalents is that would just be compatible with a warming of 1.5 degrees compared to the global reference temperature (average of the years 1850 to 1900). From this residual budget, policy-makers derive the climate policy action path for the coming decades. Now, the truth is that there is no one “right” reduction path that is universally valid. In fact, the Intergovernmental Panel on Climate Change has over 200 pathways and associated models, each of which points to a way to meet the 1.5 degree target. Each of these pathways has a slightly different trajectory and also assumes slightly different CO2 residual budgets.
The more than 200 pathways (the last IPCC report could only rely on 77 pathways and models) can be roughly divided into two groups. The first group consists of pathways that initially lead to a slight “overshoot”. This means that emissions are not reduced ambitiously enough at first, resulting in too many emissions worldwide. Through negative net emissions in the last third of the century, however, the 1.5 degree target could still be achieved by 2100. The other group of models initially shows a particularly aggressive reduction path for the next decades, but is then somewhat less ambitious for the last third of the century and still allows marginally positive net emissions towards the end of the century – at least on average for the model group. Thus, this second model group is presumably a little more relevant for practice according to the current state of the art. The good news now is that the more than 200 models on average show a reduction path that is a little bit “easier” to achieve than what has been the state of the art so far.
This is no reason to sound the all-clear: even the emission reduction steps now demanded are so ambitious that they will be extremely difficult to achieve. In addition, the models assume on average that population growth will slow down, an assumption that could prove to be too optimistic. Furthermore, the models are based on the assumption that it will not be possible to achieve net zero emissions of greenhouse gases such as methane, which means that the annual reductions in CO2 will have to be particularly significant. This is because the reporting often ignores the fact that the respective reduction paths refer to all greenhouse gases and are only expressed in so-called CO2 equivalents for reasons of simplification.
This is how CAP2 uses the new reduction pathways
For CAP2, the publication of the new reduction paths results in the possibility and also the necessity of recalculating its own master reduction path and adjusting it according to the new findings from the studies published in the meantime. This master reduction path is needed to determine to what extent companies deviate with their own CO2 emissions from a path that would be compatible with the 1.5 degree target. The CAP2 master path is calculated in a slightly simplified way as follows: In the set of more than 200 individual reduction paths, a kind of non-linear regression line is placed with the help of an optimiser, which corresponds as best as possible to the statistical properties of all individual paths on average and at the same time leads to a CO2 residual budget, which in turn corresponds to the median of all IPCC 1.5-degree paths. This master path also shows a much more steady development than the individual paths and is free from the jumps of some individual paths, which sometimes have a rather arbitrary character in the course. From this master reduction path, the percentage reduction in CO2 emissions can be derived for each year, which we also expect from companies in order to be 1.5 degree compatible.
Differences between company-specific reduction paths and the master path can also be expressed concretely in CO2 tonnes. Assuming a company is responsible for 1,000 tonnes of CO2 emissions in the year T0 and the master reduction path requires a 10% reduction in emissions in the year T1 compared to T0 , this company must reduce its CO2 emissions by 100 tonnes in the period in order to be compatible with the 1.5 degree climate target.
CO2 reduction through the decommissioning of EUAs
In this example, if the actual reduction of the company concerned were only 50 tonnes, there would be a “gap” of 50 tonnes to be compatible with the global reduction path. This is where CAP2 comes into play: The difference is “closed” by buying the reduction performance of 50 tonnes of CO2 on the market for European emission allowances (EUAs). Rights to emit 50 tonnes of CO2 equivalents are purchased on the secondary market from an EUA seller and donated to a German climate foundation for perpetual safekeeping. This removes the rights from the market forever. Since the rights would otherwise have been compulsorily used to legitimise emissions, the reduction of emissions is the logically compelling consequence.