Addressing climate change issues is not just a philosophy or something for the distant future, but an important management issue that must be considered and implemented now!
Global warming is behind the increase in natural disasters associated with extreme weather events, and climate change is expanding, accelerating, and becoming more serious.
To curb climate change, countries around the world have set goals to significantly and sustainably reduce greenhouse gas emissions.
In addition to energy conservation, expanding the use of renewable energy sources that do not emit greenhouse gases is a major policy for the future.
As sustainable corporate activities are required, environmental measures, including the use of renewable energy, are inevitable.
Global Warming Caused by Anthropogenic Factors
In 1988, an expert opinion was expressed that “An increase in global average temperatures on an unprecedented scale is possible in the first half of the 21st century.”
This led to the creation of the Intergovernmental Panel on Climate Change (IPCC), a United Nations organization, which began research on global warming.
Already, greenhouse gases have caused sea water temperatures to rise, glaciers and sea ice to melt, and sea levels to begin rising. As a result, heavy rains, heat waves, large-scale floods, and wildfires are occurring in many
areas due to climate change.
After the Industrial Revolution that began in the 18th century, the use of fossil fuels such as coal, oil, and natural gas led to a rapid increase in the concentration of carbon dioxide in the atmosphere.
Climate change is caused by changes in weather (weather, temperature, wind, precipitation, etc.). Climate change can be divided into “natural factors” such as volcanic eruptions and changes in solar activity and “anthropogenic factors” such as greenhouse gas emissions and deforestation.
The IPCC has determined that anthropogenic factors are the cause of global warming.
Decarbonization is the global consensus
The United Nations Framework Convention on Climate Change (UNFCCC) was adopted by the United Nations in 1992 with the ultimate goal of stabilizing the concentration of greenhouse gases in the atmosphere and entered into force
Based on the UNFCCC, the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC), which is positioned as the highest decision-making body of the Convention, is held almost every year.
In the history of the COP, the “Kyoto Protocol” and the “Paris Agreement” were major milestones.
A “virtually zero CO2 emissions” society, including “zero emissions,” a recycling-oriented society that uses resources effectively, and “carbon neutrality,” where CO2 emissions and absorption are offset to zero, will be the state of a decarbonized society.
As of COP26 (November 2021), more than 150 countries (all G20 countries) have set annual decarbonization targets. (Most of the developed countries have announced that they will achieve their goals by 2050, China, Russia, and Saudi Arabia by 2060, and India by 2070).
Decarbonization is already the global consensus.
Steps leading up to COP26
The first COP1 was held in Berlin in 1995.
The conflicting interests of various countries in the fight against global warming have become an obstacle to the international community coming together as one.
The Kyoto Protocol, adopted at COP3 in 1997, was groundbreaking in that it set numerical targets for greenhouse gas emissions for the first time, while making only developed countries subject to reduction obligations.
In 2015, the “Paris Agreement” adopted at COP21 was a historic turning point in the fight against global warming and climate change, stipulating that not only developed countries but also “all member countries of the United
Nations Framework Convention on Climate Change should take action to reduce greenhouse gas emissions.
The policy on measures has changed from a low-carbon society to a decarbonized society.
In August 2021, the Intergovernmental Panel on Climate Change (IPCC) released its sixth report, in which it determined for the first time that human activities are the cause of global warming as an anthropogenic factor, saying “there is no doubt that human activities are the cause. The global average temperature has increased by 1.09 degrees Celsius compared to pre-industrial times (1850-1900), and most of this increase is attributable to human activities.
In November 2021, the Glasgow Climate Accord, adopted at COP26, declared that “efforts will be pursued to limit the temperature increase from pre-industrial times to 1.5 degrees Celsius,” strengthening the global target from
“2 degrees” to “1.5 degrees.
The agreement also stipulated for the first time the phasing out of coal-fired power generation and the elimination of fossil fuel subsidies.
Japan’s Decarbonization Policy
In October 2020, Prime Minister Kan declared in his policy speech that “we will achieve a carbon neutral, decarbonized society by 2050.
In April 2021, at the Climate Change Summit, the previous reduction target of “26% reduction by FY2030 (compared to FY 2013)” was significantly raised to 46% reduction.
In addition, the “Green Growth Strategy Accompanying Carbon Neutrality in 2050” has been formulated to encourage bold innovation by the private sector and support the challenges of a new era. This is an idea that sees the response to global warming as an opportunity for growth, rather than as a constraint or cost to economic growth.
Significance of Introducing Renewable Energy
Japan’s energy industry is dominated by fossil fuels with high CO2 emissions, such as petroleum, coal, and liquefied natural gas (LNG), which account for more than 85% of the total.
It is realistic to assume that it will be difficult to meet all electricity demand 100% from renewable energy sources, and reference values suggest that about 50~60% of electricity generation will be covered by renewable energy sources by 2050.
Renewable energies such as solar, wind, geothermal, small and medium-sized hydropower, and biomass are considered promising, diverse, and important low-carbon domestic energy sources that can contribute to energy security because they do not emit greenhouse gases and can be produced domestically.
In order to make renewable energy a main source of power, it is first necessary to reduce the generation cost of renewable energy, which is high compared to the rest of the world.
The obligation to decarbonize is on companies
The Paris Agreement (post-2020 framework) does not include an obligation for countries to reduce their emissions.
The target is the company and it is the company that is affected.
The rules of climate change have changed by making it impossible to continue doing business.
While investment is moving away from carbon, investment is moving toward decarbonization.
319 institutional investors with $28 trillion ($308 trillion) in assets under management issued a joint statement (June 2018) calling on G7 leaders to strengthen climate action.
A district court in the Netherlands has issued a ruling approving a lawsuit against oil giant Royal Dutch Shell. (May 2021)
In addition to ordering the company to reduce CO2 emissions (by 45%) with numerical targets, the ruling shocked the world because it recognized climate change as a human rights issue that must be reduced.
Calculating your GHG emissions based on the GHG Protocol is the most important first step in creating a decarbonized organization.
In the future, companies that do not comply will be penalized accordingly.
Environmental values are pervasive
Environmental awareness of air pollution, oceanic pollution, and waste is growing, with the greatest concern about global warming.
A public opinion survey released by the Cabinet Office (March 2021) shows an extremely high level of interest in global environmental issues, with more than 90% of respondents of all ages indicating a desire to take steps to decarbonize.
The term “Eco-Guilt” has also emerged in the English-speaking world as a way of expressing a sense of self-consciousness that one has done something bad for the environment in one’s daily life and feels guilty about it.
This can be attributed to an overly heightened environmental consciousness.
Carbon dioxide CO2 emissions are seen as a social cost and surface as a previously hidden economic cost.
An increasing number of companies are introducing “Internal Carbon Pricing” (ICP), which considers CO2 emissions as a “cost” and independently assigns a price to the CO2 emissions to help make capital investment decisions.
Hitachi, Ltd. introduced it in 2019 and set the price of CO2 at 5,000 yen per ton, which was raised to 14,000 yen in August 2021.
Carbon pricing is a mechanism to put a price on CO2 emissions and curb emissions through a market mechanism.
In Europe, the world’s leading emissions trading market, the price currently exceeds 80 euros/ton (approximately 10,000 yen/ton).
Ube Industries has announced in its Integrated Report that its GHG emissions for FY2020 are 11.27 million tons. At a price of 10,000 yen/t, this represents a cost of 112.7 billion yen, or more than four times the level of operating income.
To a decent decarbonization concept
The idea of decarbonization itself began 25 years ago with the Kyoto Protocol (COP3, 1997), an international treaty.
There have been a number of opposing views, including that the global warming crisis theory is fake, that it is being used as a tool for political conflict and trade, and that it is an unfeasible and irresponsible claim.
However, the point that “CO2 emissions must be reduced” seems unlikely to be overturned in the future. Against this premise, discussions are likely to continue on how to reduce emissions and what kind of system should be introduced.
This means that the idea of what leads to a decent decarbonization is itself in the process of evolving.
In the past, there were criticisms that wind farms emit a lot of CO2 in the manufacturing process, or that coal-fired power is also used to charge electric cars, but this has been resolved by expanding the scope of CO2 to be
Previously, only “direct emissions” (SCOPE 1) of CO2 emitted by the parties themselves were counted, but “indirect emissions from energy sources” (SCOPE 2) were introduced in response to the question of whether the electricity being introduced is decarbonizing in the first place.
In addition, the trend is to consider “other indirect emissions” (SCOPE3), which extends upstream and downstream emissions to include contracted manufacturers and outsourced exhaust shoe treatment.
A joint declaration has been issued by environmental NGOs that “Biomass power generation with large-scale fuel imports should be stopped.”(December 3, 2020)
Biomass power generation is being promoted as “environmentally friendly” using a levy that is added to electricity rates, while fuel imports such as wood pellets and PKS (palm kernel shells) are rapidly increasing.
It was expressed that large biomass power plants based on imported fuels should be stopped because they will further accelerate the biodiversity and climate crises.
As part of efforts to decarbonize society, it is important to consider whether or not the society will be better off if these methods are further expanded.
The true decarbonization business is one that is sustainable, economically viable, and can be pursued by a large number of private companies.
It is hoped that a number of small-scale true decarbonization businesses will emerge that are technically feasible.