Government Net-Zero Strategy Playbook

miles away. You end up studying a lot, but it's all kind of trial and error, and you crammed night before the exam. Anyway, what you need is a study guide to help you know what and how to study, what works, what's not worth spending time on. And you need to study group to share notes. Well, forgive the analogy, but it's kind of the same thing. For climate change. We know the exam is coming up, and unlike any of my college exams I thought were just so important,

this one actually is. To be specific, without real action, the world is likely to hit one point five degrees celsius about pre industrial levels between and so sooner than I expected. That means this decade is critical to get things going okay. So countries and companies have begun to level up their decarbonization ambitions, many aiming to go net zero by but for the most part of not laid

out clear pathways to getting there. They're putting themselves in the position of having to cram the night or decade before the exam and at that point it's too late. As I said, this decade is critical to get things going, but they need a study guide so they can implement the clear strategy and aced the exam. Well, Bloomberg has that study guide. Today. We've got BEENEF head of Energy Transitions Louisa tomorrow to talk about the net zero Pathfinders initiative,

just launched on the eighteenth of October. The idea is to provide a resource of actionable policy ideas and case studies of what's worked around the world to help policymakers and other stakeholders design and implement decarbonization strategies today. So a study guide to help jurisdictions plan their climate strategies and figure out their study groups. And Louisa will mention this again in the interview, but go check it out

at Bloomberg dot com. Forward slash net zero Pathfinders or sending examples of what's worked for you and your stakeholders at pathfinders at Bloomberg dot net as a reminder being if does not provide investment or strategy advice, and you can hear the full disclaimer at the end of the show. I'm Mark Taylor and you're listening to switch on to be net podcast. Louisa, thanks for joining, Thank you for

having me here, Mark, and welcome to London. You just moved over from from Apollo, Is that right, Yes, that's right, moved exactly a month ago, sweet right on, just in time for it to get dark here all the time. I'm sorry we're pulling you away from the summer over there, but we're really glad to have you, and we're really glad to have you on the show today to talk about what countries and companies by extension can do to reach net zero targets. Now, let's start off just by

digging into that a bit. We're going to start this show with the assumption that climate change is a thing, that it's real, that it has dire consequences if we don't get it solved. All that, and one way to do that is by setting what are called net zero targets? Now, can you just start us off by explaining what a net zero target is. I'm not your target is simply aiming or pablishing the goal data, country or a company,

we will produce less greenhouse gas emissions. Then it takes from the atmosphere, so not to start getting to zero, but getting to zero net emissions, which is, by the way, it really hard considering how we produce everything today. And when I say we, am referring to us as a society as a participants of the economy. Yes, there you go, and everybody, just so you know, I called called that out. I asked Lisa to clarify that because I'm just really

conscious that been for Bloomberg. We're analysts, not advocates, and we're going to say we a lot in this in this episode here today, and it's just going to refer to all of us collectively as the human race or humans. The reason why I say ways, because we, or the word we, will not get to zero if every single person and company and sector and government player isn't involved in this race. So, now that we know what net zero is and what it's designed to do, can you

describe for us. The commitments that countries have made around that six years ago, in two thousands fift change pair is the government's most governments around the world have agreed to keep the increase in global warming below two degrees and to make efforts to limit it to one point five degrees. Why is that important? To degrees in one point? This is what i PCC or the inter Governmental Panel

on Climate Change estimate. This is the maximum that we can increase global warming to limit catastrophic climate change effects. So that's why it's important. And I think the basic thing that's important to understanding is we're not talking about reducing the global warming. We're talking about limiting the increase of global warming. So government's got together six years ago and they had agreed to make efforts to limit this global warming, and they do this by committing to take

action and committed to limit the two emissions. However, since then, we have not really gotten any better. To be more specific, the i p c C estimates that emissions need to fall about forty five belows two thousand ten levels by two thousand thirty to reach net zero on to town fifty. So twenty years later, however, we have actually increase emissions by around one five per year between ninety nine and

two thousand nineteen. The good news is that over the past years, especially over the one year and a half, governments have started to take more action towards establishing NAT zero commitments, and today about seventy countries that represented around forty nine percent of global emissions have established and that's your target. The challenges they don't actually know how to get there. Okay, that seems to be the kicker there.

So if we can back up or recap, all these countries got together and said, hey, we want to reduce submissions to reach a certain target. And then you're saying, kind of nothing, nothing has happened. There's some stuff for some efforts have been made. I guess we can get to that. But more recently they're saying, okay, actually we want to make a net zero target, but we don't know how to quite get there. Is that right Most are not saying we don't know how to get there,

but through this they don't. It's a very hard job. There's a few reasons why it's very hard. Firstance, we need to start acting right now because a lot of governments and the takeholders in general are talking a lot about thousand fifty THOUSTA doesn't sixty. But we need to act now, and we need both action if we really want to change this emissions run. So if you leave it till to get started, you're never going to meet

a target. Then we're done. Another reason why it's very hard is because it touches on every aspect, every sector of the economy. It touches on everyone's lives, which means that collaboration is key there. And to be honest, policymakers and many of the key stakeholders are not really good at collaborating. Right. Everybody's playing their own game. But it

has to change if we're serious about getting there. When you and I were talking about this before the show, you mentioned what countries have been trying has mostly been kind of trial and error up to this point. So they made their commitments, they made their net zero targets, they're trying to collaborate, it seems, but the things that they're actually doing our guests in check or trial and errors. That right, nobody has a real clear strategy as far

as I can tell. We're all figuring that out together right now. Right, And when I say collaborations key is not just about one country collaborating with another, which is important because the word has to learn from the other's mistakes about what works and what doesn't work. Otherwise we're going to take way longer together and we don't have

this time we as the word as a society. Also, it also means collaborating across all policy layers in one country, which means city level policymakers collaborating with national level policy makers, which is sometimes it's very hard. And it also means the stakeholders, finance sector, civil society collaborating with government and collaborating among themselves. So collaborations really a fundamental aspect to get there. But we also understand that there there are

challenges with this collaboration. Can you tell us a bit more about those challenges? First, the challenges when we're talking about a transition to a new economy, we're talking about something that we will touch on every single aspect of the economy, and that we'll touch on every by these lives, every industry, which means that it's not a job that can be done in isolation. In practice, we will need

to see policy makers interacting with each other. We need to see city level policymakers working together with national level, international level to make things happen. And we will also need to see the finance sector to civil society engaging with governments and other players. And to be honest, most of those takeholders are not very good at collaborating. And the second challenge is that this is not something that we can plan a lot or only plan, because we

need to start acting right now. So this engagement has to happen right now because policy makers and other players are talking a lot about action for two fifty but we don't have this time to wait, so we need to get started really soon. Okay, so how do we get there? How do we get started? This week we have launched a new Bloomberg initiative that aims to help policemakers and all your stakeholder solve those these questions. The

name of the initiative is Nazio Pathfinders. This is a new, completely public initiative that aims to help policemakers and under stakeholders design and implement the carganization strategies today, not in ten years, but today. And we also aim to help those players simplify their search for a climate solution, and we do this by leveraging content capabilities of many Bloomberg organizations and also many of our partners. That's cool. How

does it work? Walking through it a little bit? So, if I'm a policymaker and I want to make use of the new net zero Path Finders initiative, what do I do? Is it like a reference library of like projects that have worked, or is it a consulting service.

We have just launched a public website where we highlight the key challenges and the key solutions in the Race to zero, and we also have a interactive library where policy makers and other stakeholders can future by sector, policy layer and key peelers which I would touch on in a minute of Nazio strategies and find examples of what is working for others, what other policymakers have implemented that has actually proven to have effect and impact in the

carbonizing some sectors of their economy, or on leveraging financing for example, or engaging the view society to get to some successful the carbonization measure. That's cool. So it's like a menu of things I can choose from that have proven to be successful in other jurisdictions. If I'm a policymaker exactly. And the way we do that is we have organize those best practices around four key pillers. Yeah,

let's get into those. So in the Pathfinders initiative, I guess what I'm getting at is that that maybe this could be a start to the end of trial and error. That there are I think you've got identified, as you said, four key pillars of things that work. Can you describe those four key pillars? And before I do, we consider those four key pillars from Memento because they are relevant to all keys takeholders of the economy and all we

meeting sectors. The first pillar is accelerating deployment of mature climate solutions. The second pillar is supporting the development of new climate solutions, third pillar is managing the transition and phasing out carbon intensive activities, and the last one is

creating appropriate climate transition government structures. So those are what we believe to be the fundamental aspects of any net zero strategy that a policymaker or even other privates that holder can put together when thinking about their race to zero. We're gonna take a quick break when we come back, We're going to make our way through each of these pillars and describe how they can be used to achieve net zero targets. Stay with us, okay, welcome back. Let's

just start going through them. So number one, accelerating deployment of mature climate solutions. When I hear that, I think that just means helping build wind, solar, and batteries. Is that right? It is right, It's not limited to it. But this isn't a big part of this. In this piller, we're talking about deploying right now the solutions that are

low cost and widely available. It includes, for example, Winen solar technologies, but it also includes storage technologies, deploying evs and evy chargingfrastructure, but also solutions simple solutions such as boost walking and public transportation micromobility in general, also encouraging sustainable food consumption, which is a key part of ancient zero.

To give you an example of like why we need to act really fast under the ban off new energy outlook under the last reports green scenario we be enough to say is that getting to the your emissions requires one point for tear warts of renewables added every year over the next three decades, and at the moment we have less than one point seven gig wats everybody for scale, that's just a whole ton of renewables that we are not adding that we in the world that needs to

be added to meet these targets. So there's just a lot of that needs to be done there. And to highlight how important it is to acts fast and deploy fast solutions that are widely available right now, be enough estimates under news green scenario, the new Energy Outlook Ring scenario that to get to zero, we actually need over the next three decades to deploy per year more renewable energy technologies that we have installed at the moment in

the world. I mean, I just read yesterday about what if they're doing trying to do a solar plant in China. Now that's a hundred giga watts or something like that. It's gigantic. But what you're saying is that, you know, things like this need to become more than norm than the exception. Number two, what do we got? Number two

is about supporting the development of new climate solutions. And here we're talking about developing that technologies that are not widely available or low cost right now, but that will be key in the second phase after racial zero, and I'm talking here about post a thousand, like what you were talking about low carbon hydrogen, we're talking about carbon capturing, storage, about direct air capture, I guess as well also, but

also like deploying, developing electrification of planes, of shapes, of other transports. And it's important to mention that if we really want to get to zero, we need to tackle every sector of the economy, not only the easy ones. So we need to start develop the technologies to abate the heart sectors right now, otherwise those won't be ready

in ten years. So these are kind of like where wind and solar and others were, you know, ten plus years ago, right, so they're expensive and YadA YadA, but now they're they're cheap and where they available, as you said, So just starting down that that cost curve for those other technologies basically, and it needs time, right, so we cannot wait to get this done. Number three. Number three is about managing the transition and phasing out carbon intensive activities,

and it's about really about your things. First is it's the transition won't be just about adding NW clean technologies. We also need to retire and phase out the high emitting technologies that are in our operating today. This includes coal plants, internal combution engine vehicles for example, and even high emitting heating sources. So we need to get rid of those as fast as we can, and especially start

financing new ones. But also it's about the fact that retiring or phasing out those technologies also means that a lot of people will be impacked. So we need to make sure that the transition is fast, but also the transition is just and fair to those business and to those workers that have for a long time relied on those technologies. Absolutely. I saw on TV last night during the Great British bayoff an advert for the what is it, the new ultra low emission zone for London, any anything

inside the M twenty. And that's a change that's going to affect a lot of people. And so I think that's what you're saying. So it's managing this transition. I remember last year hearing about it, and then they've just been saying this is coming, and then now they're saying, hey, this is coming next week. Managing the transition. Glad I don't drive here, Yeah, hey, there you go, But a lot of people do, right, and it will affect tons and tons of people, So yeah, this is super super important.

And honestly, transition is not always comfortable, no jeez, it's it's for sure more comfortable than the impact of not doing it. Finally, number four, creating appropriate climate transition governance structures. Now this sounds like when I read this earlier, I was like, oh, that sounds boring, but then you think about it, like it's probably the most important one exactly. That's what I said, Like, those people don't engage much,

and that's really key, and that's really key for many things. First, like governments change in like really short period, so those players need to make sure that the climate plans and climate projects will remain despite of who is leading a country or a city. This is part of it, but also part of it is creating mechanisms to make sure that different players and gay across the government and across different stakeholder groups, and also creating mechanisms dream courage and

to enforce commitments from others such as from corporation. And finally, there is a big role for the finance actor to play there as well, and also for the civil society in the finance sector, for example, it's really key to encourage climate related financial disclosures such as GCFT and for civil society doors organization have a really big role to play in driving social development and equality across the value chain.

And this is very important because a very fast transition can have a good impact in many countries, especially countries that export, for example, of raw materials. But this impact might be good or it might be bad, and it really depends on how much attention we pay on it. So we've gone throughout the four pillars of the Pathfinder project, and if I'm a policymaker, I will be able to find examples of cases where these things have worked for

other dissections. But we're can I find out more? What can I do to get started engaging with the net zero platform organization? First, the natural Pathfinders platform is publicly available at Bloomberg dot com slash Nazero. Pathfinders website includes description of all those solutions, the best practice library, as well as a brand new report that we have launched detailing those pillars and discussing what others have done that

has proven to work. And the very important thing to mention before we're done here is we recognize that there is no single path through Zero. We're not trying to give a final answer of what works and or what doesn't work. And as I mentioned, engagement is key. So this is supposed to be an evolving initiative that welcomes

contributions from other players. So if you're a policemaker or stakeholder that has implemented something that works, reach out to us and going to be really happy to receive your contribution, to publish it on our website and to discuss how we can continue engaging with you as well, and you can contact us at Pathfinders at Bloomberg dot net. I mean, congrats on the release of the website or launch of

the website. And again, everybody that's pathfinders at Bloomberg dot net, is there any next step that you're looking forward to with regard to the Pathfinders initiative. The next step is really an engagement. So we have launched the website, we have made the report publicly available, and now what we're really looking forward to engage with new organizations, with other policy makers to make sure that we are really a hope to highlight what works, what can be done, and

how others can get there. That's fantastic This seems super needed and I look forward to hearing a lot more about it in the future. Again, Bloomberg dot Com, Forward, slash net zero, Pathfinders, Luisa, thanks for joining us. Thank you, Mark with a pleasure. Today's episode of Switched On was edited by Rex Warner with Great Stoke Media. Bloomberg Any add is a service provided by Bloomberg Finance LP and

its affiliates. This recording does not constitute, nor should it be construed, as investment advice, investment recommendations, or a recommendation as to an investment or other strategy. Bloomberginny F should not be considered as information sufficient upon which to base

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