Climate and Energy TransitionThe Environment

Corporations Call for “Net Zero” Emissions: Do They Know How to Get There?

Volume 25, Issue 3, Fall 2016

In the months leading to the December 2015 Paris Climate Conference representatives of global institutional investors and multinational corporations made headlines after they demanded that world leaders adopt radical emissions reduction targets, among them “net zero” emissions by 2050. Examples include the Global Investor Statement on Climate Change, which was signed by 409 investors representing more than US $24 trillion in assets, and the Prince of Wales’s Corporate Leaders Group (which includes the likes of Shell Global and Heathrow Airport Holdings Limited). Following the Statement’s adoption in Paris, a cluster of corporate heads led by Virgin Group’s Richard Branson (calling itself the “B Team”) demanded that all governments turn the Paris net zero emissions target into national-level laws.

What are we to make of this?  The practical implications of the net zero target adopted in Paris—if it is seriously pursued—are nothing short of revolutionary, opening up a “system crunch” scenario when the forces of growth, profit, and accumulation that presently propel capitalism collide with the political imperatives required to reach virtually total “decarbonization” in little more than a generation.

Paradoxically, the corporate push to adopt net zero by 2050—a target that is unprecedented in terms of it ambition—merely draws attention to the fact that the corporate elite has no clear or convincing idea about how it might be achieved. The capitalist spirit is progressively willing, but the flesh grows all the time steadily weaker.

Thus the Paris Agreement can be a clarifying moment for labor, the climate movement and the broader left in that, more than ever before, it exposes the gulf between what needs to be done from a scientific standpoint and what the global corporate and political elite are actually able to deliver.

Elite Consensus
Corporate statements on climate change invariably attract media attention, but it is worth remembering that major institutions such as the International Monetary Fund, the World Bank and the International Energy Agency (IEA) —all of them unswervingly loyal to the corporate neoliberal agenda—have for some years been sounding the alarm about climate change and have urged, in fact demanded, bold action. As a result, the Paris Agreement included the goal of net zero emissions by 2060-2070. This is more or less consistent with what is required to control global warming. With still more emissions projected in the years ahead, it is virtually certain that the world will approach and perhaps exceed dangerous temperature thresholds. The adoption of net zero therefore reflects a consensus held by the majority of the world’s business and political elite that the situation is serious; the science needs to be acknowledged, and determined action at the global level is required.

The Paris Contradiction
The problem, however, is not a lack of consensus on the need to dramatically reduce emissions; it is, rather, the inability to actually act on the consensus that has already been achieved. To illustrate this we need look no further than the Paris Agreement itself. It acknowledges the need for global warming to stay “well below 2 degrees Celsius” and states that efforts should be made to limit warming to 1.5 degrees. However, the “intended nationally determined contributions” (INDCs) that lie at the heart of the agreement—even if they are fully achieved—will set the world on a pathway toward 2.7 – 3.5 degrees Celsius of warming (and that assumes a comparable level of ambition after 2030). The 1.5 degree Celsius threshold will therefore be breached long before the Agreement’s 2030 expiration date. Thus the Agreement acknowledges the scientific reality, and then institutionalizes “contributions” that are not even close to being consistent with that reality.

The 1.5°C threshold [of warming] will . . . be breached long before the [Paris] Agreement’s 2030 expiration date.

Instead of reducing emissions, the INDCs in the Paris Agreement will result in an increase in emissions—albeit at a slower rate than would be the case according to the “business as usual” scenario. The IEA notes, “There is no peak in sight for world energy-related CO2 emissions in the INDC Scenario: they are projected to be 8 percent higher than 2013 levels in 2030 while primary energy demand grows by around 20 percent.”[1]

The elite consensus around the net zero goal is solid enough, but it is when the discussion moves to how to reach the target that differences become clear. Three perspectives can be distinguished. For convenience, these three can be labeled the “Gaia Capitalists”, the “Carbon Traders”, and the “Adaptationists.” Each of the three can tell us something different about the kind of responses that the system’s representatives are considering.

Go Gaia
The term Gaia Capitalism was apparently the creation of Richard Branson. Just prior to the Paris talks the Branson-led B Team (adherents to “Plan B”, described as an ecologically-focused alternative to “plan A”—or the profit motive, pure and simple—issued the call for net zero emissions by 2050. But the statements issued by the B Team and similar groups are largely devoid of details as to how this can be achieved. Branson’s group assures us that once governments turn the Paris commitment into national laws it will, in Branson’s own words, “unleash new innovations, mobilize large-scale investment, and reshape consumer behavior, all of which will create new jobs and economic growth.”[2]

However, for the Gaia Capitalists, laws will not be enough. Reaching net zero will also require corporations to embrace a new ethic, one that combines ambition with altruism. The defining trait of the capitalist—making money—can be turned into a humanitarian act if CEO’s can embrace a new set of values.  The world needs a new form of capitalism—one that is not driven exclusively by concern for the bottom line.[3] This new capitalism must recognize that the earth is one large living organism, and all life is connected. Before the Paris conference, the Plan B group issued an awkwardly phrased rallying cry to other corporate heads, one that urged them to embrace “people and planet…alongside profit.

The world needs a new form of capitalism—one that is not driven exclusively by concern for the bottom line.

It is hard not to see this group as heirs to the paternalistic anti-union “welfare capitalists” of the early period of the twentieth century, among them John D. Rockefeller, George Pullman, and J.P. Morgan. As Naomi Klein reminds us, a decade ago Branson’s group(???) committed $3 billion to be dedicated to green investments, of which less than 10 percent materialized (mostly in biofuels) and then dried up altogether.[4] During the same period, Branson opened new airline companies and the aviation business is presently booming as a result of cheap oil.

Branson’s group attracts a level of media attention but, one or two exceptions aside, the companies identifying with this approach are not major players in the global economy.  And in common with “green growthers” everywhere, the problem of decoupling  economic growth from emissions is simply brushed aside.

Trader Woes
The most important camp of climate-concerned capitalists is the “Carbon Traders.” Carbon pricing lies at the heart of neoliberal climate policy—the “primary mitigation mechanism” according to the IMF, the World Bank, and think tanks like the Stern Commission.[5]

Richard Branson’s group attracts a level of media attention but, one or two exceptions aside, the companies identifying with this approach are not major players in the global economy.

Carbon traders (the Traders) represent a hard–nosed subset of investors and corporate CEOs, most of whom probably look at the narcissistic hubris of Branson et. al. with disdain, and perhaps some embarrassment. For them, net zero is needed to preserve their assets and investments, but reaching the target will require governments to introduce a global price on carbon in order to drive and incentivize the low-carbon economy. Governments need to “take carbon out of competition.”

The Traders understand that capitalists primarily respond to the laws of capitalist competition. Singing from the Milton Friedman songbook, they take seriously the idea that the fiduciary responsibility of a corporation or bank is to provide a return on investment regardless of the social and ecological implications. As the Prince of Wales group candidly admitted, “The private sector invests trillions of dollars…but in most cases the goal of reducing Greenhouse Gas (GHG) emissions does not guide such spending.”[6] Therefore “a clear, transparent, and unambiguous price on carbon emissions” is needed.[7]  Similarly, in February 2015 British Petroleum’s Chief Economist Spencer Dale described how, over the next 20 years, the use of oil and gas would grow 25 percent and, therefore, climate goals could not be reached. “Policy makers may wish to impose additional policies,” principal among them being a “meaningful global price for carbon.”[8] 

The problem for the Traders—a problem they have thus far refused to acknowledge—is that carbon pricing has failed to have an impact on emissions and is going on nowhere. The World Bank’s detailed assessment of carbon markets reported that, in 2015, only 12 percent of global GHGs were covered by a price. “A global average carbon price,” the Bank reminds us, “of between US$80 and US$120—per ton of carbon dioxide equivalent (CO2e)—…would be consistent with the goal of limiting the global warming to 2 degrees Celsius.”[9] The average carbon market price is today around $10 per ton. So more than 20 years after the Kyoto Agreement established pricing carbon as the principal policy instrument for reducing emissions, still 88 percent of global GHGs are not covered by a price, and the price on the emissions that are covered is so low as to be completely useless.  The World Bank cannot point to a single instance where carbon trading has had more than a barely measurable impact on emissions levels.

The problem for the [Carbon Traders] . . . is that carbon pricing has failed to have an impact on emissions and is going nowhere.

The prospects for carbon markets are poor. Corporations do not want to pay for their pollution because it cuts into the bottom line. Concerns about the long-term viability of the system are almost invariably trumped by short-term competitiveness concerns of an individual company. Meanwhile, unloading the net zero responsibility on to governments allows corporations to continue more or less on a “business as usual” course. If the Traders were to face up the failure of carbon pricing, they would need to offer something different—the most obvious solution being decisive government interventions, ranging from heavy and restrictive regulations to all out social ownership of key economic sectors.  But this would require an ideological shift away from neoliberal group think—and there are few signs that this is going to happen absent sustained pressure from social movements.

Adapting to the Future Normal
The “Adaptationists” resemble something of a secret society. And while few corporate heads will openly admit it, there is a growing belief that the net zero target will not be reached by 2060-2070. The INDC’s submitted in Paris already reflect the distance between the scientific consensus and the declared intentions of governments, many of whom are mere mouthpieces for business interests.  Net zero will require full decarbonization of the global economy in just four or five decades. At that point, any GHGs released—to generate electricity; make products; power cars, trucks, ships, and airplanes; heat and cool buildings; raise and slaughter billions of animals, etc.—must somehow be offset or “neutralized”. In the case of CO2, this can be done by enhancing photosynthesis through reforestation and expanding the amount of vegetation on the surface of the planet. However, at present some 46-58 thousand square miles of forest are lost each year—equivalent to 48 football fields every minute.[10] Currently, the global economy emits roughly 57 billion tons of CO2 per year; almost twice the annual emissions levels of the mid-1990s.[11] Emissions from fossil- fuel use have risen a staggering 61 percent since 1990, and will continue to rise, albeit more slowly.[12] Furthermore, the global economy is expected to be three times larger in 2050 than it is today.[13]

Aware of these realities, the Adaptationists have concluded that the chances of reaching net zero amounts to, well, zero. And rather than adopt a politically dangerous or untenable target that could become a lightening rod for discontented radicals, they are trying to shift the policy focus toward dealing with the effects of warming, and the need for building resiliency. This perspective is presently expressing itself via important pro-corporate think tanks—perhaps a clear sign that CEOs are also thinking in similar terms.  According to the World Economic Forum,

Advocating for greater attention to be paid to adaptation is controversial in some quarters as it is interpreted as a tacit admission that mitigation efforts are no longer worth pursuing. However, the less effective mitigation efforts are, the more pronounced adaptation challenges will become.[14]

Using stronger language, in a 2013 report titled Too Late for Two Degrees?  the pro-corporate PricewaterhouseCoopers (PwC) noted, “This year (2013) we estimated that the required improvement in global carbon intensity to meet a 2 degrees warming target has risen to 5.1 percent a year, (every year) from now to 2050.” Governments’ ambitions to limit warming to 2 degrees, it noted, therefore “appear highly unrealistic.” The PwC report concluded, “businesses, governments and communities across the world need to plan for a warming world—not just 2°C, but 4°C, or even 6°C.”[15] Such levels of warming are, in the words of one of the world’s leading climate scientists, Kevin Anderson, “incompatible with an organized global community.”[16]

How we can actually plan for global chaos remains something of a mystery—but the key message of the Adaptationists is valid. PwC’s report makes this point: “The only way to avoid the pessimistic scenarios will be radical transformations in the ways the global economy currently functions.[17] Such radical transformations would threaten the system itself— which is a political “no-no.”Therefore we need to suck it up and hope for the best.

Capital’s Conundrum and Climate Justice
These differences of approach among the global corporate elite are unlikely to lead to open conflict, at least not yet. But it is already clear that none of these perspectives warrant the support of labor and other social movements. The Paris Agreement expresses the distance between what the science says is needed and the “best we can do” reality offered by those who work within the ideological and systemic confines of competition and accumulation.

The capitalist paradigm of extraction, accumulation, and consumption, wrapped up in the ideology of growth, is incompatible with true ecological sustainability . . .

To get even close to net zero in the time agreed will require dramatic changes in the global political economy. The capitalist paradigm of extraction, accumulation, and consumption, wrapped up in the ideology of growth, is incompatible with true ecological sustainability or a stable climate.

For labor, climate justice, and other social movements, capital’s climate conundrum is an opportunity.  We need to continue to develop our own proposals to pursue radical emissions reductions by way of deep restructuring of the global political economy, to reassert the need for extending democratic control, advancing “public goods” approaches to essential needs and services, and to implement a just transition based on mass popular participation in key economic decisions.


[1] International Energy Agency (IEA) 2015. World Energy Outlook 2015 Special Report on Energy and Climate Change. International Energy Agency, Paris. Available at: The IEA also reported that the Paris Agreement would see electricity generation from coal grow by 24 percent by 2040. See:


[3] People and planet alongside profit in Guardian,


[5] For example, see the 29 May 2015 letter to the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat and the COP21 Presidency:

[6]Carbon Price Communiqué (first issued 2012). Statement available at

[7] ibid.

[8] 2015 BP Energy Outlook 2035 (published Feb 26, 2015) Presentation by BP Chief Economist Spencer Dale   energy trends, available as video at:

[9]  World Bank, State and Trends,  page 23 How much more the price would need to be in order to limit warming to “well below 2°C” or even 1.5°C per the Paris Agreement has still to be calculated, but perhaps $150 per ton seems a fair estimate.



[12] Intergovernmental Panel on Climate Change, “IPCC Fifth Assessment Synthesis Report,” accessed November 29,       2014,






Author Biography

Sean Sweeney is director of the International Program on Labor, Climate and Environment at the Murphy Institute, and coordinator of Trade Unions for Energy Democracy.

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