Carbon dioxide (CO2) emissions, primarily from burning fossil fuels, account for 70% of greenhouse gases (GHGs) in the atmosphere. Since these have a profound effect on global warming, governments, companies and investors are looking towards net-zero policies to speed up decarbonisation.
Technological innovation and energy efficiency can reduce major sources of CO2 emissions from four sectors: power generation, transport, buildings and industrials. These "decarbonisation pathways" have the potential to reduce total emissions by 81% by 2050.
Given the high proportion of carbon created by power generation, expanding decarbonisation technologies in this sector can lead to significant change.
With more alternatives to petrol power, and increasingly stringent regulations, the transportation sector is quickly evolving.
Fossil fuels heat and cool structures around the world. However, new technologies like hydrogen gas, as well as new building codes, will make a big difference.
Mining, metal processing, and the production of gas and oil can be carbon intensive. Electrifying these industries could make them much cleaner.
Energy efficiency and renewable alternatives play critical roles in the drive towards net zero. And investments in specific technologies can speed up this effort. Investors should watch emerging developments aimed at lowering emissions, as they will be key to limiting global warming.
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1 UNEP, HSBC
2 International Energy Agency (IEA), HSBC
3 IEA, The World Resources Institute, HSBC
4HSBC Global Research
