We may debate the precise definition of clean energy - also known as green energy - but its distinguishing feature of generating energy without emitting greenhouse gases from renewable sources opens the lid on the first point where we all seek a common understanding. Put simply, greenhouse gases (GHGs) magnify sunlight and trap heat in our atmosphere: we have always needed GHGs such as carbon dioxide to maintain a reasonable average temperature. However, since industrialisation, that delicate balance has been impacted by a more significant proportion of greenhouse gases increasing that average temperature. But the fact is that, while there are many GHGs - such as methane and nitrous oxide - carbon dioxide is by far the largest GHG constituent: once added to the atmosphere, it stays there between 300 to 1,000 years. Methane, in contrast, stays around 12 years. That’s why our convention is to measure greenhouse gases in equivalent metric tonnes of carbon dioxide (tCO2e).
Let that sink in for a minute: our actions around greenhouse gases have an impact for centuries. It is not something open to debate.
Driven to remind the world of its commitment to universal clean energy, the United Nations General Assembly declared 26 January the International Day of Clean Energy. Electric cars and trains, as well as electric heating and cooling, make precious little difference to greenhouse gas emissions unless we use clean energy to generate that electricity. One of the most significant outcomes from the United Nations Climate Change Conference late last year - COP 28 - after the first ‘global stocktake’ of the efforts to address climate change under the Paris Agreement showed progress was too slow, is the commitment to transition away from all fossil fuels in energy systems ‘… in a just, orderly and equitable manner’, accelerating action in this critical decade. In a concerted move away from oil, gas and coal, which account for 80% of global energy, more than 100 nations have pledged to triple renewable energy capacity by 2030. This commitment aims to keep the Paris Agreement climate goal of limiting the global temperature increase to 1.5ºC by 2050 achievable.
It is simultaneously encouraging, yet fundamental, to recognise that this is trying to rally incentives for and to mobilise resources around expanding renewables and cutting emissions - rather than a compulsion for nations to act within a specified time scale: hence the need for the International Day of Clean Energy to remind us of the need for unified action.
Across the various regulatory regimes worldwide, large corporations publicly report on their sustainability (including GHG emissions), of which the establishment of their carbon footprint and ensuing decarbonisation plan are likely to be a component. Let us accept that regulators are yet to harmonise - but also that a substantial level of harmony may not be far away. Increasingly, sustainability is becoming more pivotal to stakeholders, impacting all businesses along the supply value chain of those large corporations, the large majority of which will need to substantially reduce their greenhouse gas emissions.
The inescapable truth is that clean energy is vital to reducing greenhouse gases. Clean energy affects every business’s ability to stay competitive and relevant, some sooner than others, but substantially all in time. Some remember - and, indeed, were involved in - the efforts to reduce the impact of climate change as far back as the 1970s. But little was achieved, making our current step change even more challenging. Let us learn from them: rather than wait until it is too late to make changes more affordably for the inevitable impact on our businesses, do something today, the International Day of Clean Energy: reach out to your adviser on how best to prepare. Read more here about Why sustainability matters to BDO – and how we can help businesses activate their sustainability journeys.
Make it matter.
GERARD RAHMAN
Partner, BDO UAE