The world is facing a formidable challenge in the coming decade: to reduce or remove a total of 25 gigatons (Gt) of carbon dioxide emissions by 2030 in order to keep the global temperature increase below 1.5C. While 2 Gt of this total is meant to come from removals, current technology is not yet advanced enough to make this goal realistic. This leaves reductions as the primary means of meeting this target.
There are two main options for generating these reductions: nature-based solutions and technology-based solutions. Nature-based solutions, such as planting trees or preserving mangroves, can be effective at sequestering carbon dioxide. However, these solutions are often expensive, with abatement costs frequently exceeding $70 per ton. They are also relatively slow to implement and have physical limitations, as there is only so much land available for planting trees or preserving mangroves.
Technology-based solutions, on the other hand, can be implemented more quickly and are highly scalable. Examples include fuel switching, energy efficiency measures, and modal shifts. These solutions often have lower abatement costs, with some activities like modal shifts even having costs in the single digits.
Governments have several options for encouraging the adoption of these solutions. Carbon taxes can be used to incentivize the use of lower-carbon alternatives. Legislation can be introduced to mandate the use of certain technologies. And market-based mechanisms, such as carbon markets, can be employed to create a financial incentive for reducing emissions. Of these options, market-based mechanisms are estimated to provide the largest share of the necessary reductions, with an estimated 12.5 Gt expected to be achieved by 2030.
Voluntary carbon credits will also play a role in meeting the target, with an estimated 3.6 Gt expected to come from these programs by 2030. However, current voluntary credit programs are not meeting the demand for technology-based offsets. In 2020, only 20% of the 95 million credits retired came from technology projects. This suggests that there is significant room for growth in this area.
It is clear that meeting the target of 25 Gt of reductions by 2030 will require the concerted efforts of governments, businesses, and individuals. Governments can play a key role in this by using a variety of policy instruments to encourage the adoption of low-carbon solutions. Carbon taxes and legislation can be used to mandate the use of certain technologies, while market-based mechanisms can create a financial incentive for reducing emissions.
However, it is important to note that these policy instruments are not without their drawbacks. Carbon taxes, for example, can have negative impacts on economic growth, while legislation can be difficult to enforce and may face resistance from certain sectors. Market-based mechanisms, on the other hand, have been shown to support economic growth while still achieving significant emissions reductions.
Given the limitations of the various policy instruments, it is likely that a combination of approaches will be needed to meet the target of 25 Gt of reductions by 2030. Governments will need to carefully weigh the costs and benefits of each approach and determine the best mix for their specific circumstances.
In conclusion, the challenge of reducing or removing 25 Gt of carbon dioxide emissions by 2030 is a formidable one, but it is not impossible. By relying on a combination of nature-based solutions and technology-based solutions, and using a variety of policy instruments, it is possible to achieve the necessary reductions and keep global temperatures from rising more than 1.5C. However, much work remains to be done and it will require the concerted efforts of governments, businesses, and individuals to meet this challenge.