Decarbonization can be defined simply as a reduction of carbon dioxide emissions. Decarbonization is also the pathway to—and often discussed in conjunction with—concepts such as reaching net-zero emissions, carbon neutrality, and a low-carbon economy.

Climate experts and global leaders have been calling for rapid decarbonization for years, citing impacts on agriculture and food production, higher risk of extreme weather events, exacerbated supply chain disruption, and other effects—many irreversible.

Ideally, decarbonization is achieved without compromising overall efficiency, quality, competitiveness, or growth. However, achieving decarbonization on behalf of a country, city, organization, or individual is anything but simple.

Drivers of decarbonization

Broadly speaking, climate change and its monumental impacts are driving the push for decarbonization. Rapid decarbonization is required on a global scale to keep the planet from warming more than 1.5⁰C above pre-industrial levels (per the Paris Agreement),

In addition to supply chain, health, and agricultural concerns, rising fuel costs, higher energy demands and urbanization, and declining fossil fuel resources also help drive the shift towards a low-carbon economy.

As a result of these concerns, more immediate drivers have also arisen, including:

• Increased regulatory scrutiny, such as the proposed SEC ruling requiring scopes 1, 2, and disclosures for certain companies and government-mandated disclosure requirements in the UK, New Zealand, and the EU.
• ESG reporting frameworks and organizations that require scope 1, 2, and 3 reporting, such as the International Sustainability Standards Board (ISSB).
• Investor interest and demands, seen in an increasing number of ESG-related shareholder proposals, as well as investors and exchanges requiring greater transparency and detailed disclosures and action plans around decarbonization.

Major sources of carbon emissions

Organizations in every industry have a part to play in global decarbonization, though some sectors pose more challenges than others. Top sources of GHG emissions in the U.S. include transportation, electricity production, industry, commercial and residential buildings, agriculture, and land use/forestry.

On a global scale, the U.S. is the world’s largest historical carbon emitter—and the second largest carbon emitter at present, joining China, India, Russia, and the EU as the top five emitters in the world. The U.S. is also the highest emitter per capita, followed by Russia, South Korea, Iran, Japan, and China.

What methods are being used to achieve decarbonization goals?

New solutions are constantly being developed. Some popular methods are as follows:

Reduction of emissions

• A switch to fossil fuel alternatives in the form of renewable sources (e.g., solar and wind energy) or low-carbon fuels and energy sources. In 2021, renewable energy sources generated about 20% of all U.S. electricity.
• Expanded renewable energy use by improving availability and developing energy storage
• Increased energy efficiency and reduced waste at and in power plants, production processes, services, buildings, and end-use products.
• City and environmental planning and regulatory strategies such as promoting mixed-use developments and urban connectivity, encouraging the use of public transport and disincentivizing car use and parking, employing traffic calming measures, and developing smart growth technologies.

Capture and storage of existing carbon dioxide

• Carbon capture and sequestration, or the “process of capturing and storing atmospheric carbon dioxide.” This includes agricultural methods that improve soil carbon storage through practices like conservation tillage, alley cropping, and the use of biochar. It also includes forest management and sequestering carbon through natural processes, pulling carbon out of the atmosphere and transforming it into biomass. Even as parts of the tree fall off or die, captured carbon remains in the form of wood, leaves, and other litter on and in the forest floor.
• Carbon utilization, which largely refers to using or “recycling” captured carbon oxides or byproducts into valuable products or services. This opens a wide range of possibilities, from bioproducts to fuels and other inorganic materials, such as concrete that uses carbon in the curation process and stores the resulting solids in the concrete material.

What level of decarbonization is needed to achieve global goals?

The Intergovernmental Panel on Climate Change (IPCC) states that in order to limit warming to 1.5⁰C, global GHG emissions must peak before 2025 and be reduced by 48% by 2080. This goal would also require a methane reduction of about 33%. Achieving this global target calls for the cooperation of and meaningful commitments by major emitters, including the US, China, and the EU.

Adopted in 2015, the Paris Agreement is a “legally binding international treaty on climate change” with 196 participating parties whose goal is to limit global warming to 1.5⁰C, compared to pre-industrial levels. To achieve this goal, participating countries must undergo “economic and social transformation,” supporting each other in the areas of finance, technology, and climate-related capacity-building.

To this end, participating countries submit Nationally Determined Contributions (NDCs), which document actions each respective country will take to reach the goals of the Paris Agreement and build resilience to adapt to climate change impacts.

In 2021, for example, the U.S. rejoined the Paris Agreement and committed to “an economy-wide target of reducing its net greenhouse gas (GHG) emissions by 50-52% below 2005 levels in 2030.” The NDC proposes sector-based actions such as providing incentives and standards to reduce carbon pollution from electricity generation, investing in transportation infrastructure to reduce vehicle use and encourage zero-emission vehicles, and promoting low- and zero-carbon industrial processes and products such as carbon capture and renewable energy sourcing.

The EU’s updated 2020/2021 NDC commitment targets a similar goal of a 55% reduction compared to 1990 levels by 2030, while Russia is committing to a 70% reduction in the same time frame.

Getting started with decarbonization

Decarbonization has become one of the ruling topics in the ESG space, with many organizations rushing to define net-zero strategies. We explore this topic in more depth during our webinar “Streamlining Decarbonization: Key Strategies and Net-Zero Planning.” View the full webinar for free in our Resources section and learn about our six-step process from emission source identification to strategy selection and implementation planning.

To learn more about decarbonization and how you can integrate net-zero planning into your strategy discussions, check out our webinar “Streamlining Decarbonization.”