Key Messages

1 Global net-zero will be achieved when human-caused GHG emissions have been reduced to the absolute minimum levels feasible; and any remaining “residual emissions” are balanced by an equivalent quantity of human-caused removals that are permanently stored so that emissions cannot be released into the atmosphere.

2 The scale and urgency of emission reductions needed by both countries and the private sector mean that we can no longer take action only where emissions reductions are low cost or in a piecemeal fashion. Instead, we must reduce all emissions comprehensively and as quickly and efficiently as possible.

3 Carbon pricing, including international cooperation through carbon markets, should be included in the arsenal of measures to enable the achievement to net-zero targets. Carbon prices must also be high enough to provide effective signals to society, to drive the level of investment and technological changes necessary to reach net-zero and be taken in conjunction with complementary policy actions to make carbon pricing relevant across company value chains. This can be achieved by expanding pricing mechanisms and coordination across countries to cover a higher proportion of global emissions.

4 International carbon markets must increase ambition and leverage investment, rather than being used solely to reduce costs.

5 As countries approach net-zero and emissions are aggressively abated, the use of emission reduction credits must necessarily decrease. Only high-quality removal credits should be used to balance residual emissions at net-zero and beyond. However, high-quality emission reduction credits can provide an important flow of capital to accelerate action on the path to net-zero and progress towards emission reductions now.

6 Corporate achievement of net-zero occurs when value chain emissions have been abated to the maximum extent possible and the remaining residual emissions neutralized by an equivalent quantity of removals.

7 Net Zero criteria should be integrated into all investment decisions, including those by development finance institutions, to support rapid decarbonization across all economic sectors, taking into account the national circumstance of individual countries.

8 Whether implemented by countries or by the private sector, net-zero strategies should support socially fair and just transitions across all regions to be successful. Governments and companies should respect human rights and pay attention to the impacts of these strategies on people, especially vulnerable and indigenous populations, align with development objectives and promote jobs and the distribution of costs and benefits.

9 The credibility of ambition and stakeholder engagement in net-zero development and implementation processes depend on transparent net-zero targets. Moreover, it will foster sectoral mainstreaming and identify opportunities for gains from alignment and collaboration needed to achieve truly systemic change at the pace and scale required.

10 Transparency in efforts and separate targets for emission reductions and removals along the trajectory to net-zero at all levels, rather than solely net emission targets, would promote accountability and may help prioritize emission abatement.

11 To be credible and to gain and maintain public acceptance all carbon market instruments need to operate within a clear trajectory to net-zero and apply robust accounting rules to ensure the avoidance of double counting. Companies must robustly account for credits and mitigation contributions and, where possible, track and disclose where credits are sourced.

12 If a company uses international credits for compliance purposes, it must ensure that the reductions or removals are not double-counted. Companies should not use international credits without a corresponding adjustment in the host country if that credit is accounted toward the NDC of another country.

13 All countries, sectors and companies need to participate in this “race to zero” but not all countries will achieve net-zero at the same time. Due to their capabilities and historic emission levels, advanced countries, in particular, must reach net-zero as quickly as possible. Developing and emerging countries may need to take a slower pace due to institutional or capacity limitations or development needs. Still, they should also strive to achieve net-zero as quickly as possible