Governing Net-Zero Emissions Targets

As net-zero carbon targets become commonplace, strong governance will be needed to ensure climate benefits. This is episode two in the Exploring Governance series.
This episode is the second in a three-part series that explores governance challenges surrounding the transition to clean energy. Listen to episodes one and three.

In recent years a flood of net-zero emissions targets have been set by companies, municipalities, and countries around the world. In fact, over-two thirds of the global economy is now covered by net-zero targets that aim to zero out greenhouse gas emissions and slow and ideally halt the process of climate change.

Yet, while the quantity of net-zero targets has multiplied, the quality of many of these targets is questionable. Many targets are voluntary and, too frequently, not subject to reliable oversight. At the same time, political realities can present steep hurdles to governments that might seek to establish robust, enforceable net-zero targets at the national level.

Thomas Hale, associate professor in global public policy at the University of Oxford discusses the need for strong governance structures to ensure that net-zero targets deliver the carbon neutrality that they promise. Hale explores what, exactly, constitutes a robust net-zero target, governance frameworks for credible and enforceable targets and the hurdles, political and otherwise, to achieving robust governance.

Andy Stone: Welcome to the Energy Policy Now Podcasts from the Kleinman Center for Energy Policy at the University of Pennsylvania. I’m Andy Stone. In recent years, a flood of net zero emissions targets have been set by companies, municipalities and countries around the world. In fact, over 2/3rds of the global economy is now covered by net zero targets that aim to zero out greenhouse gas emissions and slow and ideally halt the process of climate change. Yet, while the quantity of net zero targets has multiplied, the quality of many of these targets is questionable. Many targets are voluntary and too frequently not subject to reliable oversight. At the same time, political realities can present steep hurdles to governments that might seek to establish robust, enforceable net zero targets at the national level. What is needed are strong governance structures to ensure that net zero targets deliver the carbon neutrality that they promise.

On today’s podcast, we’re going to dive into the challenge of ensuring the credibility of net zero targets and of building the governance frameworks to do so. We’ll look at what exactly constitutes a robust net zero target, and we’ll discuss some of the hurdles, political and otherwise, to robust governance. Today’s guest is Thomas Hale, Associate Professor in Global Public Policy at the University of Oxford. Tom’s work focuses on the management of transnational problems with a focus on environmental, economic and health issues. He is a visiting scholar here at the Kleinman Center. Tom, welcome to the podcast.

Thomas Hale: Thanks for having me, Andy.

Stone: It is great to have you here. So net zero has replaced reducing emissions in the dialog around climate policy. I wonder if you could give us a little bit of a background. When did that shift happen and why?

Hale: Well, it’s happened actually enormously quickly where this idea of net zero has gone from a scientific consensus in the academic literature to actually an organizing principle, and actually a norm for how we think about the climate challenge in just really a span of a decade. So around 2010 or so scientists were writing about carbon budgets are really putting their finger on the main problem, with stopping climate change being controlling the cumulative amount of carbon and other things in the atmosphere. And so that gives you the idea we need to get not just get things low, we need to get them to a point where we’re not putting anything more in than we’re taking out. And that means net zero. So it’s a very simple idea actually. It’s an idea of balance.

Like when you breathe in and breathe out, you’re getting essentially what we need to do for the whole planet, making sure there’s a ratio here that’s not going to be increasing the amount of temperature in the planet. But that was reflected in scientific papers around 2010 or so, that period, and then came through in the IPCC report in 2013 and then into the Paris Agreement in 2015. In this famous article 4.1 which said the world should achieve a balance between sources and sinks of the atmosphere in the second half of the 21st century. So it’s gone from kind of a science idea to actually an organizing principle in this landmark international treaty on climate change in just a few short years.

Stone: You said in an earlier conversation that we had that we are at the end of the beginning of net zero. What does that mean?

Hale: So I find it really remarkable how after the science clarify this idea, how it was picked up into the international architecture and the Paris Agreement, how it then became really popular through a second Intergovernmental Panel on Climate Change IPCC report in 2018, which was a special report they did on global warming of 1.5 degrees Celsius. Which said it’s not just the second half of the 21st century we need to get to net zero by, it’s actually 2050 if you want to have at least a decent chance, a 50/50 chance of limiting temperature change to 1.5 degrees Celsius, which is what the Paris Agreement says we’d like to get to. So that was really mobilizing because it showed, I think, very clearly what needed to be done.

We need to get to net zero and the time frame for doing so. And it was picked up by people like Greta Thunberg and the Fridays for Future Movement and a whole bunch of different things. And then more surprisingly, perhaps by companies, by countries, by cities, by regions. This idea that countries had negotiated this global goal could then be translated into the targets of these other actors we’re taking. So how did it get to the end of the beginning? Well, it got accepted by not just a few sort of leaders, but as of last year, really, the whole world more or less has some kind of net zero target. So that’s a huge step forward, but it now raises new challenges.

Stone: Well, Greta Thunberg has raised issues with the definition of net zero or what it really means. So I want to ask you that, how do you define net zero?

Hale: So the IPCC, again, is very clear about what net zero means for the planet overall. It means that we have a balance between sources and sinks of anthropogenic sources, anthropogenic sinks of greenhouse gasses. But the challenge is when you downscale that global goal to a country, to a city, to a business, what does it really mean for them to do and how do you operationalize that? And that’s a much harder question. So, for example, the United Nations has a campaign called The Race to Zero campaign, which produces a lexicon of different terms. Net zero is one of those terms. And in their definition, an entity achieves net zero when it reduces emissions to residual levels and then permanently neutralizes those remaining emissions through some kind of removal system. So that’s a bit more precise, but again raises lots of more questions. What is the residual level? How do you neutralize? And these kind of things. So that’s the messier process we’re in now.

Stone: Are we talking also about carbon dioxide or all greenhouse gasses?

Hale: So all greenhouse gasses will need to be effectively imbalanced before we achieve an end to further temperature increases. But, obviously, it’s a cumulative amount of carbon. That’s the biggest piece of that, and that’s the one that lasts for a long time in the atmosphere. So net zero carbon is the biggest and most important stepping stone to net zero overall. But then it gets kind of complicated because of these different gasses have different lifespans and how you add them all up and what you prioritize can get a little tricky. The good news, though, is that the first steps are pretty, pretty simple and clear. There’s no ambiguity about them. Reduce carbon, reduce some of the short lived climate forces and you’re on the right track.

Stone: So you’ve done and some colleagues have done some pretty impressive and deep research on the issue of net zero and governance. And in one of the reports you looked at, I believe, 4000 entities, including governments, corporations, I guess municipalities or local governance units to judge who’s got targets. And you found that, as I said in the intro, about two thirds of the global economy is covered. Tell us a little bit more about what you looked at.

Hale: So this is a project I really love. We have something called this net zero tracker, which is trying to track all the countries in the world about 200, all these cities, over 500,000 people, of which there’s about 1200. All of the states, regions, provinces, entities in the top 25 emitters of which is about 800. And then all of the 2000 biggest publicly listed companies in the world, the Forbes 2000. So those are about 4000 entities all together. And we look at them in real time and see which ones have targets and what those targets include. Do they include clarity on what the pathway to net zero will be? Do they have different kinds of governance provisions or not? So we’re trying to put forward a map of who’s doing what and also how robust that is.

Stone: So you found that only five percent of net zero targets are what you’d call robust?

Hale: That’s right. So if you look at the total number of countries committed to some kind of net zero, like maybe they’ve got a really good law or maybe they’ve just put out a press release on it. If you had all those different countries, just countries alone, you get to something like 90 percent of global GDP covered by some kind of net zero commitment, which is great. I mean, this is why I say we’re at the beginning or the end of the beginning, right? Because we’ve got to the near universal coverage. But if you look at how many of those countries this again are in law, then it’s only about 20 percent. So, again, not trivial. This is a good chunk of the world that’s now got a legally binding net zero target, but obviously we’d like it to get 100 percent. But the thing I’m always flabbergasted by is how quickly it’s changing. So we did that study, it’s an ongoing tracker, but when we looked at it last year, it was at six percent of the world that in terms of global emissions had a legally binding net zero target. So it’s grown now by more than three times in 12 months. That’s the kind of rate of change we’re going to need to see continue and expand to get to where we need to get to.

Stone: Well, you also mentioned that there’s a continuum, and you just kind of started to introduce that concept here, a continuum of net zero targets that go from the industry level voluntarily. And you characterized those as very agile targets that can be put into place very quickly to regulatory standards. Regulatory standards that actually have to go through the governmental process and can take time. Tell us a little bit more about that continuum and the advantages and disadvantages of both ends.

Hale: Yeah. So there’s not going to be one single structure through which this happens. It’d be surprising if the entire world economy could somehow be put into a single framework. And so it’s a complex system, and we need to use the tools of complex systems to understand what’s going on. I like to think about it in four different buckets of governance technologies, if you will, that are at play here. One is, as you say, the voluntary commitments and standards that we see a huge amount of action here, especially the private sector. Companies you never would have thought might set a net zero target like, say, ExxonMobil are setting net zero targets. And then, of course, a key question is what are the standards behind those targets? And so you see a lot of private initiatives, things like the science-based targets initiative, which is a consortium of NGOs that tries to put forward a definition of what a good pathway to net zero could look like. We’re working with the private sector to get them to sign up to these things.

And about a thousand big companies have signed up to that science-based targets initiative. So there’s a lot of substance there, but there’s also plenty of targets out there which have not signed up to any kind of voluntary standards. My favorite example is the Canadian Tar Sands Net Zero Alliance. I don’t want to disparage them too much, but it’s definitely not been put forward for scrutiny by climate scientists to see if this is indeed where they need to be. That’s the voluntary space. But we’re also seeing, I think, really interesting and there is a second big shift to these what I call orchestration campaigns. So think about an orchestra. You have a conductor and you have the musicians. Think about the voluntary standards as the musicians kind of doing their thing. Maybe it’s a jazz ensemble, so they kind of riffing and improvising. What the orchestrator does is step in and say, “Actually, here’s where we’re going to go as a team and we’re going to try to mobilize you and send us all to a common set of of standards.”.

And that’s what the United Nations is trying to do with this Race to Zero Campaign I mentioned, to try to articulate what are some common benchmarks, some common criteria that all net zero standards should try to live up to. And so they’ve been working with things like science-based targets and Cities Race to Zero and the Under2 Coalition of states and regions and all of these kind of networks of subnational non-state actors to put that forward and develop some common criteria. Interestingly, the world’s governments, the countries that form part of the United Nations, have not submitted themselves to a similar kind of process of defining standards. So the subnational non-state actors, the cities, regions, businesses, investors, or at least some of them are beginning to kind of define this. Countries are saying, “We’ll do it ourselves. Thank you very much.” So it’s an interesting contrast there.

Stone: Well, it’s interesting you bring up the U.N. initiative, the Race to Zero Campaign, because you also have identified seven attributes of net zero. Can you explain what this means? Are these frameworks for effective governance? Tell us a little bit more about what those attributes are.

Hale: So if you want to think about this big, big, process for net zero, obviously, it’s scientific questions, engineering question, but it’s also a social question, economic question, a political question. And so we need to think about this as a holistic concept. And with some colleagues in Oxford, what we tried to do is think about what would a good net zero looks like, what would be the criteria, the desiderata, the characteristics that it would have? And we have these seven characteristics as you mentioned into three brackets. First, was the urgency of getting to zero. So reducing. So making quick action, trying to make sure that you’re covering all of your emissions, not just to say your scope one or scope two, meaning your direct emissions, but also things in your value chain. That’s the first bracket.

Stone: So a robust target implies then that they’re going to act quickly.

Hale: Indeed. So one of the reasons why you hear criticism of net zero as a concept is because some people think, you’re saying what you’re going to do in 30 years when you’re no longer to be in power or maybe you will be dead.

Stone: I’m going to be in net zero by 2050.

Hale: Exactly. And there’s a great article in a satirical Australian newspaper which said, 70 year old man commits to quit drinking by 2050, and he was obviously enjoying his Australian shiraz in the meantime. And so, as Saint Augustine said, “Lord, make me chaste, but just not yet.” So this is exactly the really important problem. If you only think about what happens in 2050, obviously, that’s not going to be a way to get there. Again, the basic science is the cumulative amount of emissions to the atmosphere that matters. So we need to crush, flatten the curve. Crush the curve, really, a term we’ve heard all too often the last two years, and then get it down to zero and potentially even go below that if we need to think about removals. So first step is urgent emission reductions. But then, of course, you need to think about the net part. For the residual emissions that remain, how do you have a high integrity, actual robust system for ensuring neutralization?

And that’s a really, I would say, less mature space in the climate field where it’s a lot of investment, of course, in restoring nature and maintaining nature to provide that natural sink the world would need to have a global state of net zero. But we can’t plant enough trees to maintain our current emissions and still expect to somehow get to where we want to get to. So it has to come with emissions reductions and we see a huge amount of growth in the technological space where people are really trying to develop new ways of sucking carbon out of the atmosphere. And that’s going to be an important part of the solution, even if we’re super successful as we must be in crushing the emissions curve in the next few decades. This going to be needed for those residual emissions. And, of course, a great thing to develop for future uncertainties we may have in this pathway.

Stone: You also get into issues such as offsets and carbon dioxide reduction and the role of those, or the limitations of those, right?

Hale: Yeah. So we’ve had a system where in the past, countries and mostly companies have used offsets in a pretty unregulated, unstandardized way. So anyone can put up their hand and say, “I’m selling offsets,” and those offsets could be really good or they could be not very good. And if you’re buying offsets as a company for something like $4 a tonne, which some of them you can get for, you got to think, is it really that easy to deal with these problems or is something a little fishy going on there? And plenty of reason to think, it’s a bit fishy. So some of the fisher ones, for example, are selling forestry offsets, planting trees or restoring land in some way and then in a few years, maybe that’s not permanent because the land burns down from a forest fire. Or because land gets sold because it was never really owned in a kind of long term legal structure that can preserve it through time.

So there’s some really kind of difficult things and permanence. And so the solution here again is governance. If you can have a strong standard where you can actually verify what’s going on and have some kind of credibility and guarantee of that, then this kind of offsetting market could work well. But there’s no global regulator who set that up. There’s no global police force that said, you can do this, you can’t do this because that’s where I think we really need to step in and see a strong regulation of that. This UN orchestrator I mentioned it’s to kind of clarify what should happen there, but it requires a big infrastructure built up to actually get a well-regulated kind of offsetting market developed and we’re not there yet.

Stone: Is this something that you think governments would be best equipped to handle through regulation? Or is this something — because there’s quite a lot of complexity here. Could voluntary targets also encompass this? Can industries encompass this in their targets themselves, do you think?

Hale: They do now already do so and, as I said, imperfectly. And so I think the burden of proof is really on the entities, especially companies that are wishing to use offsets so that they can do it in a robust way. Because there’s been so much greenwashing and and lack of transparency in the space, it’s really a huge market failure. Some governments, like the Australian government, have set up their own kind of offsetting scheme, but it’s not very good. It’s widely criticized by scientists that is not really doing what it’s doing. So there’s no guarantee that government regulation is going to be the the solution here. There’s a nice initiative called the Voluntary Carbon Markets Integrity Initiative, which is trying to look at this question and define what does good look like and to instill standards around it.

So my hope is that we can see some clarity on that question that then gets picked up by international standards, by regulatory decisions and really embedded into the requirements of this pathway to net zero. But offsetting gets a lot of attention. And to my mind, probably more than is merited based on the percentage of the solution we’re going to solve that way. So it can be a helpful thing, but the primary focus of our efforts should be on what is the pathway in the short term to cut emissions really in half this decade. And half is a big number. And that’s going to be done through reductions more than offsets.

Stone: When I push a little bit further on that issue of offsets and particularly nature-based offsets, about a year ago we had Nathalie Seddon, who’s also with Oxford here talking about nature- based solutions, and she brought up the issue of the difference between nature-based and biological solutions, which you also point out in these seven attributes. And this is such a big issue because we hear about the million, trillion, billion in how many tree planting campaigns and all these things. And I want to ask you about that. There is again a lot of emphasis on the offsetting. What are the dangers of offsetting, particularly when we’re looking at nature?

Hale: Nature is such a critical part of the solution because we know, again, going back to the basic IPCC definition, the world as a whole has to be in a state of net zero. And that means that we need all of the natural sinks,the ocean, the forest, soils that are there whose job throughout the last several millennia has been to do that. So we need to make sure those are protected and restored. Where I think we get into trouble is when we downscale to the individual company, city, country level and say, “Okay, you’re going to have to also get to net zero, but you can avoid a little bit of your reductions if you buy a little bit of someone else’s.” Unless we have a kind of system that actually adds it up and make sure it’s consistent with a global pathway to reach real net zero at a global scale, then we’re not going to actually achieve that.

So, again, it’s about standardizing and putting regulations in place to make sure that the left hand and the right hand are coordinated, not just doing this. And then our net zero tracker we see some real problems here because of those two thousand companies that I mentioned. The majority say they’re going to use offsetting, but the majority of those also don’t say what they’re going to do with offsetting. So at a minimum, we need to understand what the plan is. And probably the truth of matter is most companies don’t know exactly what the plan is. Until we figure that out together, it’s not clear that all of this will add up to a net zero world.

Stone: Well, Nathalie was very specific on the issue of the biological solutions, which can be monoculture plantations. You plant a bunch of trees or whatever plants grow quickly to suck carbon dioxide out the atmosphere, but that can have detrimental impacts in terms of ecosystem biodiversity, what have you.

Hale: Absolutely. And that’s why we need this holistic vision, because if we were to hypothetically imagine increasing biological solutions to be as, you said, monetary plantations, we could do a huge amount of damage to everything else we care about livelihoods, biodiversity, everything else we need to survive on this rock going around the sun and not be able to achieve our climate goals even. So it’d be really a perverse outcome. I think this is again where we need to kind of take a little step back and think about what are we really trying to achieve here. Is the purpose of selling offsets to help companies achieve their goals or is what we’re trying to achieve to build a world of net zero, which is going to have robust nature as one big pillar of that? And, therefore, what are the tools we should use, maybe including, but also not limited to offsetting fundraising tools to get us there.

Stone: One last attribute that I really want to focus on here is that of economic opportunity dislocation. And, interestingly, in one of the reports, you bring up Germany’s Ruhr Valley, which I believe is where brown coal or maybe hard coal was produced and burned as one of the few examples of successful transition. Tell us a little bit more about transition being an essential attribute of net zero targets.

Hale: It’s exactly this idea of a holistic transition. We know that the rate limiting step to getting to net zero is not going to be can we imagine the engineering solutions that we need. We probably think it’s not even going to be can we fund, find a marketplace for those engineering solutions? Renewable energy is taking off hugely in the market. This is really encouraging. But people need to be brought along on this journey. And there’s no world where net zero is politically sustainable unless people can imagine that as a world they actually want to live in or they have livelihoods where the communities are not decane. And so this goes way beyond the science that you read in the IPCC reports, but it is obviously essential for effecting what’s essentially the largest and fastest economic transformation humanity has ever attempted ever in our history. And so it’d be surprising if that didn’t involve some real thinking about how to mobilize support across society, especially in those parts of society that might have some losses from this transition.

So I think there are some good examples. The Ruhr valleys is one. Here in the state of Pennsylvania, Pittsburgh is a really good example of this, where the city has, I think, done a very good job of thinking about what the future industries are and health care and science and technology and innovation, and making that pivot. I’m not going to say it’s easy, there’s certainly plenty of difficulties in Pittsburgh and anywhere else, but it’s exactly the kind of transformation we need to see at scale.

Stone: Another aspect of this that comes to mind is also the transfer of capabilities to the countries that may not have the capabilities to – So Germany, United States, Pittsburgh, we’re a developed world, but you have a lot of places that are actually obviously suffering under the first impacts of climate change and the transfer of technology of finance is also part of this. And it gets very complex because, again, these attributes of robust net zero targets are asking a lot of anyone who’s going to be involved with this. I think the question, and you anticipated this earlier, you had said that regulation is not necessarily the panacea. It doesn’t guarantee that things will be robust targets. But if it’s not at the federal level and it’s not governed, how do you really make sure that this is all for real?

Hale: Great question. And I think, to my mind, the best example of this is looking at deforestation. One of the biggest drivers of climate change is illegal deforestation. So you’ve already got the laws, right? It’s not a question of getting regulations to say this is illegal, it’s defined as illegal deforestation. So how do we combat that is through finding better capacity building systems for people, authorities in rural parts of Indonesia or the Amazon to be able to enforce the law. But also probably more importantly, building up economic alternatives for those populations so that there’s a pathway to a better world that doesn’t involve quite as much deforestation. And so this is a very important mind of this is a system we need to change. And we have human systems as well as natural systems, and the human systems are a lot more complicated. I’m a political scientist, right? So I like to think about this part of the challenge as the one we’re really grappling with now. How do you not just build the right regulations where you can, but also ensure that they’re not going to be captured by special interests? And if you even get them on the books, how do you make sure that they’re going to be delivered and implemented?

And that’s a bigger question. Just thinking about what is the balance between sources and sinks in the atmosphere going to be. It’s a fundamental question of politics is how we as a society make collective decisions, and who benefits and who doesn’t and how you mobilize support. So that’s going to be central. And just to make it very concrete, at COP26 last year, we had a very optimistic and ambitious announcement that the number of Western governments are going to provide South Africa with 8.5 billion dollars in a package to help their power industry transition of coal, which is a huge problem. Have we seen any details on that emerging yet? We haven’t. And so that’s a real question, can we deliver on that very specific narrow one? If we can’t, I think that’s a huge step backwards and one that really could draw us in the question, are we going to get this right? But it’s not dead yet, we still have a lot of time to get that right. So I would hope to see a COP27 next, and the next one’s coming up in a few months, this has been done. And if we can look at more of those proof points implementation, I think we’ll have some confidence in the broader transition.

Stone: Let’s take a step forward here and look at the EU. The EU has one of the most aggressive, comprehensive net zero targets, net zero by the middle of the century, and more immediately a reduction in emissions by 55 percent by the end of this decade, which is now not very far away — eight years or so away. Will the EU have adequate verification for its net zero targets?

Hale: I think it will have adequate verification. I mean, the monitoring and verification part is really advanced hugely in the last years through satellite technology, through remote sensing and other ways of adding things up. For many years, countries reported their emissions every year or two years, even less, to the UN in like a big printed out set of papers. Like, that’s not a system that’s going to be good for monitoring, but now is much more distributed. And there’s a huge amount of private sector interest in providing real time monitoring of these things. And that’s really changed the game because it means we can now hold people accountable much better than we did before. And in Europe, we’ve already seen this beginning to unfold where different groups have been suing governments or companies to say, “You’re not doing enough, you need to do more.” And some courts finding that to be in agreement. And so we’ve seen that in the Netherlands, we’ve seen it in Germany, there are efforts in every country to do that more. And I think that’s going to be an increasing part of it as we see these targets put forward, as the monitoring verification becomes more easy, as we maybe slip back a bit from where we should be. Then the power of the courts we mobilized more and more.

Stone: Transparency is going to be such a big issue, right?

Hale: Totally.

Stone: The public is going to have to have confidence that these targets are real and verified.

Hale: And so the logic of this is right. You set a high target, implement it, you show you’ve done it and that gives you confidence and gives people confidence to go further and set the next target. This whole Paris ratchet mechanism we’ve set up is premised on the idea that you do a bit, then you implement it, you do it more and you ratchet up and up and up until we get to, hopefully, net zero. But to make that work, you need to show results, right? If people are just setting a target and not meeting it, and then setting a higher target and not meeting it, we’re going to lose confidence. And that’s the integrity piece of the equation. It’s going to be key. That’s what really what the net zero tracker is hoping to try to do, is provide a bit of transparency and comparability across different targets to look at some of that sunshine and see what it disinfects.

Stone: Well, the SEC here on this side of the Atlantic has proposed disclosure requirements for publicly traded companies around climate risk. I suppose that’s part of the transparency and ensuring robustness, all of it ties in, right?

Hale: Exactly. This is a great example, I think, of how we’re seeing the governance in net zero shift more and more from voluntary to regulatory along a conveyor belt, if you will, from the voluntary to the regulatory where companies have been disclosing voluntarily their carbon emissions and climate related risks for decades now through groups like CDP. After the 2008 financial crisis, that got picked up by the G20 into a commission by the Financial Stability Board, which became the task force on disclosure of climate related risks to CFD. That then became the law of the land in a few places. So for example in the U.K., it started on April 1st of this month, and the EU is kicking into force and to pilot already, and from 2024 universally and Japan is going forward. And here in the West it has been proposed by the SEC. So we’re seeing that large markets around the world now go from this is a good idea to this is a fundamental thing we need to do to understand where we are in the transition, and just report it like you do your taxes or your financial information. So I think that’s a very promising step. Disclosure isn’t the be all and end all, but it’s a good first step.

Stone: Just a curiosity here. Every time I do a Google search, I see at the bottom of the Google page, it says, carbon neutral since 2007. What does that mean?

Hale: Great question. So a lot of the tech companies have been very aggressive in buying renewable energy and they’re huge energy users, but they’re also quite rich companies that are able to do that well. So there’s been a lot of different terms we see bandied about carbon neutral, net zero, climate positive. I was reading a carton of milk the other day that said it was carbon positive milk, which I think is probably not what they were going for, but that’s what it said. So it’s not really much clarity, and people use these terms in different ways. But the race to zero campaign has this lexicon, which has defined these terms or tried to bring some convergence there. To me, the key point is we don’t have a really good standardized system for how companies especially report on what they’re doing.

So I haven’t looked at the details of Google’s thing, but to be claiming carbon neutrality, I would expect them to be reducing their emissions to a point where they’re quite low and then buying offsets of a high quality to compensate for those. Now, if those offsets are not of the kind that are permanently neutralizing the residual emissions, then I wouldn’t say they’re net zero. But there might be sort of carbon neutral in the sense that the two sides add up, and that’s the kind of overall atmospheric impact of what they’re doing on the removal side is matching the residual emissions. That’s the point where we can declare net zero. So I hope Google — I wish them good luck and godspeed on their accelerating that path because 2007 is a good point. We need to get to the next one.

Stone: No intention on picking on Google here at all. But it does bring up the point of of heavy industrial companies, right? And you’ve got the whole issue of upstream and downstream emissions, the scope of emissions, that’s going to be a big challenge for everybody.

Hale: Absolutely. So for Google, there’s a pretty clear path forward and how to get there. If you’re an airline or a steel maker, then there’s going to be some big changes that are needed to imagine what net zero pathway could be. So that’s going to mean that we’re going to be on different timeframes and some would find it easier. But the kind of power I think of the net zero idea is that no one is going to be able to be off this journey, right? We’re all going to need to get to the net,get to net zero and then anything remaining will need to be permanently neutralized. And we’re seeing huge breakthroughs in steel I think, for example, as one of promising sectors. Aviation, I think, is going a bit slower. There’s a reluctance to consider some of the more radical solutions like, for example, not taking short haul flights. Maybe we want to save the carbon we have available for aviation, for the places they need it. Maybe use more trains.

And these are like the harder choices that are not going to be things that most companies will get to voluntarily because it’s a pretty radical shift. That’s where the regulation comes in. France, for example, in their Covid stimulus package made a condition for Air France and all the airlines forgetting their getting support from national governments. They said, “We’re going to support you because we want there to be Air France in the future, but we’re going to have to ask you to stop flying on routes where trains are equally good for short distance stuff within France, which kind of makes a lot of sense if you have as good a rail network as France does and not a huge amount of geography to cover. So, yeah, that’s a good example of where a little bit of regulation can help companies get to the point where we ultimately need them to get to.

Stone: Great. Before we finish up, anything you wanted to go into that I forgot to ask about?

Hale: Just to say, I think it’s a really exciting time to think about these questions because we have got this kind of critical mass where we have 90 percent of the world’s economy signed up. So let’s make it stick. And I worry that if we don’t dig into these harder questions of getting the regulation right, getting the standards right, and doing the operationalization rate, we’re going to risk throwing the baby out with the bathwater. Because you have a lot of pushback from civil society, from activists, from people who are skeptical who read things like these carbon neutral claims don’t really add up and say, this whole thing is kind of B.S. We need a better way to go about it by calling out the B.S. by exposing that but also pushing toward the rigorous version of it because without that, we’re really quite lost. So unless we get the governance right, I think we’re really not going to be able to build on this momentum we’ve seen, instead might fall back a bit. So, yeah, and the time is critical.

Stone: Are you optimistic that we’ll get that governance in time?

Hale: I always like to look at what we can do and think about the barriers as things to be overcome. But let’s be realistic, it’s going to be a fight. And there’s a lot of reasons why it’s going to be difficult. One of the opportunities I see this year is some of the U.N. secretary general put together a High-Level Panel on net zero standards that’s going to come out with a big statement around this COP27 moment in November, so let’s all push for that as a way to really look at what’s good, call out what’s bad, and create a plan for building up going forward.

Stone: Tom, thanks very much for talking.

Hale: Thanks for having me.

Stone: Today’s guest has been Thomas Hale, Associate Professor in global public policy at the University of Oxford and a visiting scholar here at the Kleinman Center for Energy Policy. Visit the Kleinman Center’s website for more podcasts, as well as energy policy research and blog posts from experts in the field. To keep up with the latest from the center, subscribe to our monthly newsletter on our website. Our address is Kleinmanenergy.upenn.edu. Thanks for listening to the podcast and have a great day.


Thomas Hale

Professor of Public Policy, University of Oxford
Thomas Hale is a professor in public policy at the University of Oxford Blavatnik School of Government. Hale is a 2021-2022 Kleinman Center Visiting Scholar.

Andy Stone

Energy Policy Now Host and Producer
Andy Stone is producer and host of Energy Policy Now, the Kleinman Center’s podcast series. He previously worked in business planning with PJM Interconnection and was a senior energy reporter at Forbes Magazine.