1. Introduction

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In the past few years, "net-zero" has been catapulted to a central pillar of efforts to support the long-term temperature goal of the Paris Agreement. The idea of achieving net-zero emissions was enshrined in Article 4.1 of the 2015 Paris Agreement (UNFCCC, 2016[2]). The rationale for reaching net-zero emissions was further supported by the subsequent 2018 Intergovernmental Panel on Climate Change (IPCC) Special Report (IPCC, 2018[3]) and is reiterated in the 2021 Working Group I contribution to the IPCC’s Sixth Assessment Report (IPCC, 2021[4]). Net-zero targets have been adopted by a number of countries, including some advanced economies, emerging and developing countries, and regional groups, such as the European Union (EU). These efforts are supported by various international initiatives, such as the Climate Ambition Alliance (GCAP UNFCCC, n.d.[9]), and high-level commitments (see for example, (Group of Seven, 2021[10])). Countries are not alone in this endeavour, with a number of non-state actors putting forward their own net-zero commitments (UNFCCC, 2020[11]). The momentum behind net-zero has continued despite the COVID-19 pandemic. At the same time, there is a growing gap between the various net-zero commitments put forward and concrete actions being implemented in the near-term (see for example, (OECD, 2021[5]) and (Buckle et al., 2020[6])). Moreover, even if all announced national net-zero pledges as of May 2021 are fully realised, global energy-related CO2 emissions would still be around 22 gigatonnes (Gt) in 2050, and extending this trajectory would lead to a global average temperature rise of around 2.1°C by 2100, with a 50 per cent probability (IEA, 2021[12]). There are several open questions surrounding the concept of net-zero. This includes for example, what net-zero means, how different net-zero targets relate to each other, and what plans, policies, and sectoral transformations are needed to reach net-zero globally. Moreover, there are a number of assumptions, potential risks and uncertainties underlying net-zero commitments related to future technologies and land availability, as well as potential implications for equity and fairness (see for example, (La Hoz Theuer et al., 2021[13])). The various net-zero commitments put forward to date provide welcome signals of intent. However, as currently formulated, net-zero targets vary significantly in their characteristics and there is limited detail available on the concrete pathway to reach these ambitions. The approach adopted by countries to their net-zero targets, for example the terminology used, greenhouse gases (GHGs) and sectors covered, timeframe, balance between emission reductions, removals, and use of international carbon markets to reach the country target, could lead to different outcomes and timelines for reaching net-zero globally. The devil is in the details, and without careful attention to such details, individual net-zero targets risk being too weak to achieve the global goal (Rogelj et al., 2021[14]). This paper aims to unpack countries’2 net-zero emissions targets3 to better understand their characteristics, similarities and differences, and countries’ experiences with translating net-zero targets into near-term plans. This paper focuses on net-zero targets in 51 countries and the EU that have been

2 In this paper, the term “countries” is used to include regional economic organisations (e.g. the EU) when applicable. 3 In this paper, the term “net-zero emissions targets” is used to refer to net-zero (GHG) emissions targets, climate neutrality targets and carbon neutrality targets.

UNDERSTANDING COUNTRIES’ NET-ZERO EMISSIONS TARGETS

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adopted in law, proposed in legislation, or reflected in policy documents4 as of 1 October 2021. This paper also explores the potential role, and associated risks, both for individual countries and globally, of using international carbon markets to help achieve countries’ net-zero targets. It draws on available literature, country experiences, and insights; it does not undertake quantitative scenario analysis, but builds on relevant work by the OECD, IEA, and other organisations. This paper is structured as follows. Section 2. provides a brief background and context, setting out some issues to keep in mind when discussing net-zero targets from the perspective of countries. Section 3. unpacks countries' net-zero targets across key dimensions and explores the extent to which net-zero targets are reflected in short and mid-term policy planning. Section 4. sets out insights from four country cases of planning and implementing net-zero targets. Section 5. explores the role, changes in dynamics and potential risks of using international carbon markets in net-zero emissions plans. Finally, Section 6. provides a synthesis of key findings and conclusions based on the analysis in this paper.

4 This paper does not include countries’ net-zero targets in political pledges or currently under discussion. For this reason, this analysis may differ from other assessments of net-zero targets which adopt a different approach (for example, see (Black et al., 2021[33]), (Climate Action 100+, 2021[169]), (World Resources Institute, 2020[46])).

UNDERSTANDING COUNTRIES’ NET-ZERO EMISSIONS TARGETS