Don't Let Carbon Reduction Become Merely a Catchword Governments and Industries on the Move

By Liu Chia-yu

The COVID-19 pandemic has forced the international community to make a dramatic push for transformation and sustainability, and in the post-pandemic year 2021, sustainability will be even more of a priority as the world realizes that the problems and consequences posed by global warming and climate change are as relevant to people's daily lives, economic operations and even survival as the pandemic.
Admittedly, climate change continues to worsen in many regions and countries. Not only has France declared 2020 the hottest year on record, but the World Meteorological Organization (WMO) has since released statistics showing that 2020 is one of the two hottest years ever recorded,indicating that the planet is warming at a rapid pace. Climate change is also starting to cause natural disasters around the world, with two devastating hurricanes hitting Fiji and other Pacific islands in 2020, in addition to the severe bushfires in Australia in 2019.

UN: 2021 is a critical year for addressing climate change

"In the past, people used to use the term 'climate change' when talking about global sustainability, but the shift to 'climate emergency' underlines the importance of energy saving and carbon reduction, and the fact that leading international organizations, governments and industries around the world are more committed to global sustainability than ever before," said Kenny Hong, Deloitte Taiwan chief operating officer of the audit services department. Oxford Dictionary chose "climate emergency" as the word of the year 2019 and defines the term as "a situation in which urgent action is required to reduce or halt climate change and avoid potentially irreversible environmental damage resulting from it."
In his previous remarks on global sustainability,United Nations (UN) Secretary-General Oliveira Guterres said that although the world has made some progress on climate change over the past year, with countries accounting for 70% of the global economy and 65% of global carbon dioxide emissions remaining committed to net zero carbon emission goals, this is not enough as much remains to be done to meet the Paris Agreement's goal of limiting global warming to well below 1.5 ℃ . The year 2021 is therefore still a critical year in the fight against climate change.
Guterres stressed that in order to reach the UN's "net zero emissions" target, countries, cities,financial institutions, and critical sectors such as aviation, water transport, industry and agriculture must see zero emissions as a new normal in life,and that each unit must set specific and clear objectives for their plans, rather than just paying lip service. In terms of eliminating coal, science and economics have now given clear guidance that Organization for Economic Co-operation and Development (OECD) countries must phase out coal by 2030, and all other countries must do so by 2040, while achieving a just transition.

Carbon neutrality as a key strategy for sustainability

At present, countries worldwide regard carbon reduction as the primary goal in the pursuit of global sustainability, said Taiwan Institute for Sustainable Energy ( TAISE) chairman Eugene Chien, and the globe has suddenly witnessed a wave of carbon neutrality, with countries declaring their carbon neutrality to the public. In particular,Joe Biden, the new President of the United States,the world's second largest emitter, has vowed to reapply to join the Paris Agreement after his election on November 7, 2020, ramping up the global carbon reduction trend.
I t is wor th noting that many countr ies worldwide have set their carbon reduction targets as part of their Nationally Determined Contributions (NDCs) and are proposing feasible carbon reduc tion programs based on their situation and capabilities. The total carbon emissions target for South Korea is a 37% reduction from business-as-usual (BAU) levels by 2030, the net emissions target for the EU is a 40% decrease from 1990 by 2030, a 26-28% cut from 2005 by 2025 for the US, and a 26% reduction from 2013 by 2030 for Japan.
As governments and industries around the world continue to place greater emphasis on global sustainability and zero emissions, Taiwan,as a member of the global village, has made many concrete moves towards green policies. Although not part of the UN, Taiwan has echoed the NDCs by committing to a 50% reduction in net emissions by 2030 compared to the BAU scenario.
In addition, given that neighboring Asian countries such as South Korea, Japan, Singapore and China have introduced carbon pricing in recent years, the Environmental Protec tion Administration (EPA) of the Executive Yuan has also made it one of its important tasks to promote the implementation of a domestic carbon pricing system at this stage. According to the EPA, carbon pricing can be achieved by imposing a carbon tax (fee), or by implementing a cap-and-trade system. The amendment to the Greenhouse Gas Reduction and Management Act is currently underway, and the various sectors are still being consulted on the mechanism to promote the levying of carbon fees, such as the targets, rates, reductions or exemptions,subsidies and incentives, etc. The agency will do its best to enhance the competitiveness of the industry and minimize the impact on the general consumption of electricity. The proceeds of the levy will be invested in the development of a low carbon economy, taking into account the overall economic development of the country and the achievement of carbon reduction targets.

Businesses should think about medium and long-term climate change responses

For the industry's efforts on climate change and the strategic direction it should take in the future, the KPMG Survey of Sustainability Reporting 2020, covering 45 of the world's top 100 (N100) and top 250 (G250) companies, revealed that although the proportion of G250 and N100 companies setting carbon reduction targets was higher than in previous years, less than 40% of companies have set targets that were in line with the Paris Agreement's 2℃ warming pathway, indicating that corporations must set feasible carbon reduction targets.
Deloitte Taiwan's Corporate Social Responsibility (CSR) service leader Joe Chen,a senior cer tified public accountant (CPA),suggested that as extreme weather has intensified environmental risks such as heat waves, floods and forest fires, and has dealt a blow to economic and social development, the government and regulatory authorities are increasingly demanding corporate governance, environmental regulation and climate information disclosure, and as investors are more concerned about corporate ESG performance in line with the principles of responsible investment, companies should think about their medium and long-term climate change strategies. In addition to mitigating the impact of climate change by purchasing green electricity and boosting energy efficiency, we should assess the potential impacts of climate change and develop adaptation strategies in advance, and issue green bonds, sustainable development bonds and other sustainable financing channels to set up sustainable operations with the aim of attaining carbon neutrality. Deloitte Taiwan is of the view that, in the face of the crisis of the climate emergency, cooperation and proactive responses from all sectors are leading to a gradual buildup of momentum for sustainable transformation.
Through the development of the green economy and green finance, it is hoped that a new wave of green prosperity will be ushered in, creating more opportunities for society and laying the foundation for social stability.
"As the world has entered a state of climate emergency, corporations are advised to adopt the mindset that carbon reduction is everyone's responsibility rather than just an empty slogan,"said Peng Chi-ming, chief executive of WeatherRisk Explore Inc, adding that with the impact of global warming and climate change, businesses need to find ways to survive from the ever-changing climate and severe weather, hence the use of the "meteorological data" concept. Despite meteorological data being a mobile public asset, there are still many enterprises that have successfully turned deficits into profits in the face of changing weather conditions by combining artificial intelligence with meteorological technologies. He called on companies to draw on "meteorological data" to develop valuable business models.
There is no doubt that energ ysaving,carbon reduction and global sustainability are the common goal of mankind. For international organizations, various governments, industries and people alike, we must build a carbon reduction and sustainabilit y mindset and then make concrete plans to contribute to the survival of the earth and humanity and embrace a better future together.