Corporate Demand Side Emissions: A Critical Pathway to Net Zero

Abstract

With a view to slowing down the rise in average global temperatures, many countries and corporations have committed to reaching Net Zero Emissions (NZE) by 2050. One of the pathways pursued to achieve NZE has been through a sharp rise in renewable energy (RE) installations, which has not proved adequate. Demand-side innovation could be slashing demand-side emissions. Using the Avoid-Shift-Improve (A-S-I) methodology originally developed for policymakers, we address demand side emissions in four sectors-electricity, transportation, industry, and buildings. Increasing digitalization by corporations helps them identify and deal with areas where electricity is wasted, combine REs with their existing energy mix, and optimize the cost-risk-emission mix. In transportation, challenges faced by companies transitioning to EVs are discussed particularly with reference to battery production, charging, and recycling. Avoiding emissions could depend on the uptake of public transit, the popularity of remote work, and reconfiguring city design especially in urban areas of the future. Industry includes consumer and industrial goods (e.g. steel). The need for manufacturers to include scope 3 emissions in their NZE plans is of paramount importance. The ways in which circularity can be enhanced are reviewed. Building heating and cooling emissions may be ameliorated, in part, by energy efficiency improvement measures, while building construction emissions are dependent substantially on mitigating emissions from producing steel and concrete. Though the investments needed to implement these A-S-I strategies are massive, the returns to business and society, even if not immediate, would be sufficient to justify the initial outlays. Sustainable finance, public-private partnerships, and government subsidies and incentives are vital to facilitate the demand-side innovations.