This year’s NEO analysis includes country-level granularity for nine key countries: the US, China, India, Indonesia, Japan, Australia, Germany, France and the UK. Each country will chart its own course to net-zero emissions, depending on its natural resources, local technology cost and strategic advantages. This section summarizes the main dynamics in these countries’ transitions, and their similarities and differences, with a focus on the Net Zero Scenario.
BNEF will publish more detail on these countries in individual reports in the first half of 2023. Meanwhile, the country-level data can be found in the NEO Data Viewer.
Three country groupings emerge in the race to zero. All countries in our Net Zero Scenario get to net zero by mid-century; some move faster this decade, while others leave more to do in later decades. These differences are mainly driven by the relative sectoral split of emissions in country economies. They therefore do not reflect BNEF’s judgment of country responsibility – they are a product of the division of the sectoral carbon budget, along with economic growth and demand factors.
The first grouping consists of countries where emissions in the NZS have already peaked by 2022. It includes Europe, the US, Australia and Japan. Emissions reductions accelerate early in the 2020s, with steady progress thereafter.
China is in its own category: emissions in the NZS peak around 2022 before stabilizing and falling rapidly and aligning with the OECD countries’ trajectories. A decisive phase-out of unabated coal is among the biggest contributors to enable this transition.
The third category of countries sees emissions growth above the global average in the 2020s and only start to turn the corner in the early 2030s. This group includes India, Indonesia and other countries grouped as “Rest of world”.
Some countries’ NDCs look ambitious, others less so.
To compare countries’ Nationally Determined Contributions (NDCs – their latest climate pledges under the Paris Agreement) with our scenario results, we estimate countries’ CO2 emissions from electricity and heat, transport, buildings and industry assuming that they achieve their stated NDC targets. Extracting these data from NDCs is not always straightforward. It is also worth noting that our NZS assumes a 1.77C warming target , which implies a global reduction in energy-related emissions of about 29% by 2030. This is slightly different to a 1.5C target as specified by the Glasgow Climate Pact, which requires a 43% reduction by 2030. While NDCs and our scenario may therefore not be perfectly aligned, we can still draw some conclusions:
China, India, Indonesia can afford to raise their ambition, even based on the Economic Transition Scenario. China, India and Indonesia’s NDCs would see emissions rise between 2019 and 2030, not fall. Our modeling shows they can beat their NDC targets in both our scenarios. While emissions in the ETS in Indonesia and India rise 30% and 22%, these increases fall short of the charted 96% and 31% rises implied by their NDCs. China can even reverse the historic trend, with emissions in our ETS peaking around today and falling by 12% in 2030 relative to 2019, instead of rising 68% under their NDC. A decisive transition away from coal will be key to achieve this objective.
The US, Japan, Germany and Australia achieve (or come close to) their 2030 targets in the Net Zero Scenario. The US, Japan, Germany and Australia are able to meet their NDCs under the emissions reduction trajectory in the NZS, provided they are taking decisive action and raise ambitions for deep decarbonization. The UK and France miss their targets, though the difference in absolute terms is relatively small.
Germany meets its NDC in our base case ETS; other developed economies do not. We find that only Germany is able to reach its stated NDC target under our ETS – just about. It is worth noting that NDCs are meant to reduce emissions by at least 43% over 2019-30 in a 1.5C-aligned scenario, while emissions in our 1.77C-aligned scenario on average fall by 29%.
