What went wrong on the way to net zero

Jan 27, 2025
Net Zero 2050 Carbon Neutral and Net Zero Concept natural environment A climate-neutral long-term strategy greenhouse gas emissions targets A cloud of mist in the green Net Zero figure.

The atmosphere at a recent meeting to discuss the results of the 29th Conference of the Parties to the United Nations Convention on Climate Change was glum, to say the least. It was the result of four delusions that doomed the effort from the start.

I recently attended a meeting in Hong Kong as a follow-up to the COP29 conference held last November in Baku, Azerbaijan. COP29 was the 29th Conference of the Parties to the 1994 United Nations Framework Convention on Climate Change (UNFCCC). More than 100 people were at the Hong Kong meeting, most of whom work on climate change issues, as business people or as employees of non-governmental organisations or governments or universities.

The atmosphere at the meeting was glum, to say the least. It was like being at a gathering of the campaign workers for a candidate the day after the candidate lost.

COP29 was the 29th of a series of Conferences of the Parties since 1995. More than 50,000 people attended in person. The Parties are the 198 countries that ratified the UNFCCC Convention in 1994. The UNFCCC was a result of the Earth Summit held in Rio de Janeiro in 1992, which was noteworthy for the fact that more national leaders attended it in person than any other conference. This showed that interest in protecting the global environment was international and unified.

The UNFCCC set a “lofty but specific goal”:

The ultimate objective of the Convention is to stabilise greenhouse gas concentrations “at a level that would prevent dangerous anthropogenic (human induced) interference with the climate system.” It states that “such a level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened, and to enable economic development to proceed in a sustainable manner.”

The goal became an effort to form an international agreement to limit greenhouse gas emissions to a specific amount, with sanctions for failure to meet the commitments. The first attempt to do this was the Kyoto Protocol, which was agreed to at COP3 in 1997. That attempt failed because some of the highest emitters, including China and India, were exempted because they had not previously emitted as much as Western countries due to slower economic development and were deemed to deserve a chance to catch up; at least one country withdrew because it would not be able to meet its commitment; and some countries, such as those formerly dominated by the Soviet Union, had low economic growth, emitting below their commitments so they were able to sell their excess permits to emit to countries that otherwise could not meet their commitments (this was dubbed “hot air”); and the sanctions failed.

After a series of disappointing COPs the process finally reached the 2015 Paris agreement at COP21. It was a cause for great celebration. The Paris agreement set a target of preventing global temperature rise from exceeding at most 2C but preferably 1.5C. It gave up on binding national commitments but settled for voluntary commitments, to be specified annually by each participating country as its “nationally determined contribution” or NDC. Enthusiasm about this system led many countries to announce plans to achieve “net zero” emissions by a specified date such as 2050.

This too has failed. Emissions of greenhouse gases have continued unabated and are even accelerating. The goal of “net zero by 2050” is a fantasy.

What went wrong? The race to net zero is failing because of the delusions of its enthusiasts. Those delusions fall into four categories: economics; finance; technology; and strategy.

In economics, the delusion was that non-carbon-emitting energy sources, specifically wind and solar energy, were cheaper than energy from fossil fuels. Those who believed this falsehood continually pointed to studies by Lazard Freres, a financial company, showing that the “levelised cost of energy” from wind and solar was lower than the cost of oil, gas, and coal.

The problem is that the cost of wind and solar did not include the cost of what is called “balance of system”. To meet the demand for energy requires not just the energy produced by wind and solar but an elaborate system encasing those technologies that enables them to deliver the energy when it is needed. It would be like calculating the average cost of water for agriculture from a source that delivers only in winter when the water is not needed but not in summer when it is needed, without considering the cost of a dam. Had they referred to studies by an energy technology company with energy knowledge instead of a financial company they might not have made this error.

Stemming from the economics delusion, the finance delusion was that uneconomic projects could be financed if only banks could be pressured or shamed enough to do it. It is true that if a solar or wind project were economically superior to a fossil fuel project then banks would be happy to finance it. But if it is not, it can only be financed with the help of government subsidies such as the tax credits in the US, which are insufficient and mostly go to benefit the bottom line of JPMorgan Chase. When climate change activists called for financing they really meant giving money away to build wind and solar to developing countries with accelerating emissions. This is unlikely on a large enough scale.

The technology delusion was that the rate of progress in the use and cost of renewable energy technologies could be inferred from the rate of progress of digital technologies such as microchips and artificial intelligence. But microchips have benefited from extreme rates of miniaturisation, and artificial intelligence benefits from requiring mainly software, not hardware. Energy systems are big-hardware dependent and cannot be miniaturised or made dependent primarily on software.

The strategy delusion was that progress in this arena could be propelled by rising “ambitions” and coerced “pledges” and specific-date “targets” instead of the only real alternative, the patient and unpredictable process of technology research and development.

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