and supply chain. Meanwhile, emissions from fuel supply and customers driving vehicles accounted for 79%. For Volkswagen, assuming responsibility for scopes 1–3 is propelling a more ambitious corporate strategy (with cleaner, electric-powered cars at its heart) and in turn a beneficial impact on world CO2 emissions.
If cities are to truly lead on climate action, ideally we would define “Fully Scoped” as assuming responsibility for scopes 1, 2, and 3, upstream and downstream – sector-based and consumption-based.17 The C40 analysis shows how the consumption-based method “offers complementary insights into the drivers of GHG emission – recognizing cities as both consumers and producers of goods and services – and can help cities identify a broader range of opportunities to reduce global GHG emissions”.18
In addition to “all scopes”, “Fully Scoped” should clearly include all GHGs19 and not just carbon dioxide. We recommend that this is made explicit within the concept of “Fully Scoped”: i.e. all activities, all gases. A recent report in McKinsey Quarterly 20 shows – in Figure 1.6 – how important assuming responsibility for all gases is for any city that has significant industrial and agricultural sectors; but it also demonstrates that all cities should consider targeting all GHGs, considering waste has such a strong global warming potential outside the effects of carbon dioxide.
Figure 1.6 Anthropogenic GHG emissions per sector and type of gas. (Source: Based on Emissions databases for Global Atmospheric Research (EDGAR), 2015; FAOSTAT, 2015; IEA, 2015; Mc Kinsey Global Energy Perspective 2019; Reference case 1.5c Scenario Analysis.)
“Science-Based”: What Does This Mean?
The Science-Based Targets Initiative (SBTi) has focused on providing the corporate sector “with a clearly defined pathway to future-proof growth by specifying how much and how quickly they need to reduce their greenhouse gas emissions”.21 The targeting process involves a widely accepted methodology from the World Resources Institute, CDP, UN Global Compact, and World Wildlife Fund to calculate reduction pathways for different sectors. That methodology apportions the Paris Agreement’s emissions-reduction goals to each entity according to their capacity to reduce. The methodology helps organizations calculate the emissions reductions to target in accordance with any of three aligned approaches: a sector-based division of the global carbon budget; an absolute approach based on emissions reductions required; and an approach that uses an entity’s relative economic contribution to determine its emissions reduction target. As of December 2019, over 740 companies had committed to science-based targets.
The SBTi has not yet created similar pathways and guidance for cities but (1) points to the C-FACT methodology as a useful corollary of the method22 and (2) has inspired a science-based approach.
Importantly for our summary here, it provides a principle for cities when targeting “Net-Zero”: looking to the best-available science to help inform the appropriate share of emissions reductions for the city and defining how quickly the reduction should occur to be in line with global climate stabilization targets.
The contraction and convergence approach developed by the Global Commons Institute back in the 1990s, but championed more recently by C40 in its Climate Action Plan guide,23 helps cities measure and “converge” on an emissions per capita that is becoming equal to its relevant peers and also “contracting” enough for global net-zero emissions to be achieved by 2050.
Keeping global temperature rise under 1.5–2°C requires leaders to focus their strategies on both the total amount of global emissions reductions and detailed accountability for each city’s appropriate share of their relevant national total. To say a city’s net-zero target or pathway is science-based communicates that the city has considered its appropriate obligations under the Paris Agreement and has set is emissions-reduction target accordingly. Of the many strong examples of “science-based” leadership to net-zero emissions, the Mayor of London’s “Zero carbon London: A 1.5oC compatible plan”24 explicitly links the plan to the global temperature goal in the Paris Agreement.
“Paris-Agreement-Compliant”: What Does This Mean?
Many cities may approach the idea of reducing to zero emissions and conclude that with best efforts and all available technology they will not be able to get there on their own. There will be an emissions gap. This gap may be a hard-to-abate industrial sector within the city’s boundary or it may just be the need to be connected to a grid that is not on a zero-carbon trajectory and lies outside the city’s sphere of control.
As with leaders in the corporate world, these municipal leaders may conclude the need to purchase carbon credits, or invest in negative emissions technologies, in order to offset the emissions that they cannot reduce on their own account. These outside-entity investments can help us all along the journey to a net-zero world if they are tied to the global carbon budget. To achieve this, the unit of carbon credit supply needs to be counted in the appropriate nation’s single, unified GHG inventory. Only then will the credit be netted against the nation’s other carbon sources (e.g. logging and carbon-emitting factories) and sinks (e.g. forest preservation, afforestation); and only then will there be a unified picture of reality at the global level. Most organizations fund these sinks, though, by purchasing carbon credits in a flawed marketplace. Subnational, project-based carbon credits may often have a variety of real-world benefits but fall short from the point of view of atmospheric integrity because they do not form part of the relevant nation’s GHG inventory.
However, encouraging directions announced at COP25 – for example, by REDD.plus – point to some fixes on the horizon.25 Powered by the Coalition for Rainforest Nations, this platform will be making United Nations Framework Convention on Climate Change (UNFCCC)-registered REDD+ forest carbon credits issued by nations under the Paris Agreement, and these will be made available to subnational and private actors such as cities to purchase for the first time. This could trigger a significant, voluntary transfer of capital from wealthier, industrial cities to developing countries to reduce deforestation and encourage forest preservation. Under any global scenario that gets the world to 1.5oC, McKinsey point out in their “Climate math” report that a minimum 77% of deforestation’s current emissions need to be abated by 2030.26 This level of reduction will need to be funded by those who can afford it and who cannot necessarily get to “Net-Zero” without purchasing offsets.
Different approaches to financing the emissions gap will affect countries’ nationally determined contributions in different ways. Instead of purchasing carbon credits, a city could create quantifiable projects themselves (think urban tree plantings within the city boundary) or investments in negative emissions technologies, to remove carbon dioxide from the air. While these emissions-reduction activities could appeal to that city more than purchasing carbon credits – especially as the former has many spillover community benefits – they might not be captured in the relevant nation’s nationally determined contribution as part of the Paris Agreement, and therefore would not contribute to global carbon budget accounting. For a city to be liveable and also truly “Net-Zero” under the definition of the Paris Agreement, I would encourage a blend of the two approaches: creating and funding high-quality, verifiable in-boundary (“on-site”) credits and blending that with UNFCCC-registered credits that are part of the global carbon budget and transfer funds to the countries and communities to abate the vast majority of deforestation emissions within the decade, while avoiding the purchase of non-Paris-Agreement-compliant outside-boundary carbon credits. Most importantly, the city should say explicitly to what extent it is relying on carbon credits and external investments, to what standards these credits are verified, and to what extent its actions affect a relevant nationally determined contribution.
“Cumulative”: What Does This Mean?
Now