Unlocking Sustainability: The Top 5 Benefits of Decarbonization

The planet is at a crossroads. This can be attributed to the use of fossil fuels to effect significant economic advancement. Global warming, caused by the emission of greenhouse gases, is exerting its toll on the world; the climate is shifting for the worse and having adverse impacts on human and animal health and ecosystems.

Thus, decarbonization has emerged as one of the fundamental objectives for governments, companies, and people. The objective is to rein in global warming to 1.5°C above pre-industrial levels, and, of course, the advantages of transitioning the economy to a decarbonized one are much more numerous than that. Below, the main advantages of the decarbonization process in the context of sustainable development are discussed:

1. A Greener Tomorrow

The first advantage of decarbonization is indeed that it would alter the environment for the better. People’s activities, such as using fossil fuels and other products that involve the emission of greenhouse gases into the atmosphere, have caused global warming. As a result, they have led to unusual phenomena such as extreme weather and upsetting of ecosystems. By reducing harmful emissions, one can:

• Curb Global Warming: Decarbonization is an efficient approach that may contribute to combating global warming since it considerably reduces emissions of the main GHG – carbon dioxide, methane, and nitrous oxide. It helps lessen the carbon footprint on electricity, transportation, and manufacturing systems and replaces conventional energy sources with alternate forms like renewable energy and nuclear energy. This transition reduces global warming, enables the conservation of ecosystems, sustains the world’s biodiversity, and protects humans from the adverse impacts of climate change.

Besides this, decarbonization is for future development as it enables the global climate change goals for enhanced stability of the global economy through the diversification of clean energy innovations and systems. Adding to this, sustainability bonds relate to the four core components of both the GBP (Green Bond Principle) and the SBP (Social Bond Principles). Global sustainability bond issuance in 2021 was USD 200.9 billion. Further, in 2021, India issued 1.2 billion US dollars in sustainability bonds, with Axis Bank (USD 600 million) being one of the most recent Indian sustainability bond issuers.

• Protect Biodiversity: Biodiversity is the foundation of the web of life on which humans rely for various needs, including food, water, medicine, a stable climate, and economic progress. Over 50 percent of the global GDP is reliant on nature, and this figure is slated to increase. Over one billion people depend on trees as their source of income.

Decarbonization promotes beneficial outcomes concerning species and ecosystems by reducing greenhouse gases and restricting the influence of climate change on living organism habitats. Implementing renewable energy and other sustainable measures reduces habitat destruction. Hence, it improves ecosystem capacity and reliability, which is vital in promoting biological diversity.

• Guarantee Long-Term Environmental Health: Decarbonization preserves long-run environmental quality by cutting greenhouse gas emissions, reducing air and water pollution stemming from the combustion of fossil fuels, and enhancing cleaner forms of energy, including renewable and nuclear energy. The figure below further represents the greenhouse gas emissions by economic sectors in the United States:

Figure 1:  Greenhouse Gas Emissions by Economic Sectors in the United States, 2022

Source: United States Environmental Protection Agency

This shift helps to alleviate the effects of climate change, such as harsh weather and sea-level rise, while also protecting ecosystems and biodiversity. Furthermore, it promotes sustainable activities that protect natural resources and reduce environmental deterioration, resulting in a better Earth for future generations.

2. Improved Public Health

On the same note, decarbonization also comes with many benefits for people’s health. Globally, air pollution from fossil fuel consumption is the fourth highest cause of death. For illnesses such as respiratory and cardiovascular diseases, the figure stands at around seven million every year. By transitioning to cleaner energy sources and technologies, one can:

• Enhance Air Quality: Decarbonization enhances fresh air quality. Using renewable energy sources and clean technologies improves the fighting elimination of haze and insecurity of weak respiratory systems due to air pollution. This brings a change in living standards for the better and eradicating or lowering the effects of poor air quality on health. Ambient air pollution is the contemporary population’s single major determinant of environmental health issues in millions of Europeans. Air pollution may lead to lung and heart problems, as well as early mortality. More than 90% of Europeans who live in cities are exposed to dangerous amounts of fine particulate matter, which causes over 200,000 premature deaths each year in Europe.

More than 12 million people worldwide die every year as a result of living or working in hazardous conditions. Healthy People 2030 aims to reduce people’s exposure to dangerous pollutants in air, water, soil, food, and materials in their homes and workplaces, as stated by the US Department of Health and Human Services.

• Decrease Health Risks: Decarbonization helps decrease the instances of illnesses attributed to air pollution, such as asthma, lung cancer, and heart disease. Low-earning people are more vulnerable to living in such polluted regions and consuming polluted water. Furthermore, children and pregnant women are more likely to suffer from pollution-related health concerns.

The transition to cleaner energy sources, such as renewables and nuclear power, improves air quality and reduces asthma, lung cancer, and cardiovascular mortality. Furthermore, decarbonization improves public health resilience by stabilizing the climate and minimizing extreme weather events and heat waves, resulting in safer and healthier settings for people globally.

• Boost Overall Well-being: Decarbonization enhances the standard of living in various areas to increase the healthy living populace and, therefore, lower the cases of health issues in the community. In 2022, the U.S. health expenditure increased by 4.1% to USD 4.5 trillion, or USD 13,493 per person. This growth rate is nearly similar to the one prevailing just before the COVID-19 pandemic. While the government has invested significantly in the containment of the pandemic, this has led to significant increases in NHE and the expenditure of these amounts in 2021 was significantly reduced alongside the usage of medical goods and services.

The aggregate of healthcare expenditures was 17.3% of GDP in 2022, comparable to pre-pandemic levels (17.5% in 2019), following increases in 2020 (19.5%) and 2021 (18.2%).

Figure 2:  United States Health Care Expenditures, in Percentage of GDP, 2019-2022

Source: American Medical Association

3. Economic Advantages

Decarbonization has massive economic advantages. In the Net Zero Power System by 2035 scenario, the Florida state economy is expected to grow by 1.5% in 2030 when stimulus investment in motorization reaches a new high compared to the baseline year. The Net Zero Economy offers more stimulation and lower costs for companies and people, leading to a roughly 2% increase in the state economy by 2050. to the New Climate Economy, expanding low-carbon technologies could yield economic benefits worth USD 26 trillion by 2030. These benefits include:

• Reduced Healthcare Costs: Lessening the occurrence of diseases that result from pollution decreases treatment costs. Decarbonization enriches the air substantially and moderates the climate, thereby enhancing the breathtaking reduction of healthcare system expenditures. The shift from fossil energy sources to renewable energy sources and nuclear power reduces hazardous pollutants, including particulate matter and nitrogen oxides that cause respiratory and cardiovascular diseases.

To put it briefly, avoiding carbon means not simply reducing the negative effect of carbon on the environment but also saving costs related to illnesses and relief to several health facilities.

• Increased Productivity: Employees in good health can work efficiently, so they do not spend much time at home due to illnesses. Besides, funding clean technology and efficiency in energy creation fosters inventions and provides new employment opportunities, thus enhancing worker efficiency. Decarbonization promotes a stable climate and reduces the effect of extreme weather events, contributing to long-term productivity development across industries.

4. Futureproofing and Self-Sustainability

Decarbonization makes societies more self-reliant and less vulnerable to external shock in terms of energy because fossil fuels are diminishing entities that are mostly controlled by a few countries rich in resources. By investing in renewable energy sources such as solar, wind, and wave power, one can:

• Ensure Energy Security: Decarbonization promotes energy security by diversifying energy sources away from fossil fuels and towards renewables such as solar and wind, lowering reliance on unpredictable global energy markets. It increases resilience to supply interruptions and price changes while protecting against geopolitical concerns.

Moreover, advocating for energy-saving measures reduces total energy consumption and, as a result, enhances security through better management and reducing energy prices. In a nutshell, decarbonization can contribute to delivering a safer and just energy future to the people and the global economy. In line with this, sustainable financing activities to address global issues in India increased by 121 % from USD 6 billion in January 2016 to USD 322 billion in September 2021, as per the India Brand Equity Foundation. About 90% of these loans were sustainability-related, and this was because SMEs were seen to take sustainability more seriously compared to larger firms.

Figure 3:  Sustainable Financing Activities in India, in USD Billion, 2016-2021

Source: India Brand Equity Foundation

Additionally, investment in sustainable energy infrastructure improves grid stability and dependability, allowing for constant energy access. At COP26, India promised to achieve net zero emissions by 2070. India’s updated nationally determined contribution (NDC) includes lowering the emissions intensity of its GDP by 45% by 2030 compared to 2005, achieving 50% cumulative non-fossil fuel-based power capacities by 2030, and promoting a healthy and sustainable way of life. This includes adopting a ‘Lifestyle for Environment’, or LIFE, movement as a key to combating climate change.

• Mitigate Resource Scarcity: Decarbonisation benefits resource scarcity by shifting dependence from scarce and declining fossil fuels to abundant renewable resources. Solar, wind, and hydropower technologies are renewable energy technologies. This is because they utilize naturally replenishing resources and, hence, are not dependent on depleting fossil fuel sources. Such records were published by the Office of Energy Efficiency & Renewable Energy in 2022 when the yearly renewable electricity generation crossed that of coal for the first time in the United States. It was further stated that in the domestic sector, energy produced from solar energy will increase by 75% by 2025 and that from wind energy will increase by 11%.

Nonetheless, decarbonization fosters strong and sustainable resource management by focusing on using renewable energy sources to provide future generations with access to resources without further demanding and exhausting them.

• Promote Technological Innovation: Decarbonisation fosters technological advancement to prompt the development of renewable energy, storage, and carbon capture. For example, in December 2023, The COP28 Presidency and the Kingdom of Saudi Arabia unveiled the historic Oil and Gas Decarbonisation Charter (OGDC), a worldwide industry charter aimed at accelerating climate action and achieving large-scale impact in the oil and gas sectors. Moreover, as of December 2023, 36 nations established the Climate Club, a high-level forum dedicated to accelerating industrial decarbonization. The International Energy Agency, in collaboration with the Organisation for Economic Cooperation and Development (OECD), serves as the forum’s Interim Secretariat.

Market incentives, such as subsidies and carbon pricing, encourage private sector investment in sustainable technology, speeding cost reductions and scalability. Further, collaborations among governments, academics, and businesses promote information sharing and technological transfer, resulting in ongoing progress. For instance, TotalEnergies and Air Products signed a memorandum for 15 years with delivery of 70,000 tonnes of green hydrogen to the European market starting in 2030. This first long-term agreement followed TotalEnergies’ request for proposals to provide 5,00,000 tonnes of green hydrogen per year to decarbonize its European refineries.

Battery technologies, hydrogen fuel cell transport technologies, or sustainable and renewable biofuels that are being developed are considered essential to ensure the necessary rates of the world economies’ growth and new jobs creation with the approach to decarbonization needed. The choice of this uncertain strategy puts on the winning side those nations that, as the leaders, are providing solutions to the global problem of transition to a more sustainable energy future, increasing competitiveness on the world map and enhancing the aspect of improved environmental disposal.

5. Social and Environmental Justice

It is, however, important to acknowledge the fact that some of the measures in the decentralization process also work for some of the problems of social and environmental injustice. Sadly, environmental violators hurt mostly the needy and underprivileged since the strained communities are always coming from low socioeconomic backgrounds. This, by prioritizing decarbonization, one can:

• Reduce Environmental Inequities: Decarbonization helps mitigate climate change, protecting populations disproportionately affected by extreme weather and rising sea levels. This fosters a more equal distribution of environmental benefits and lowers health risks linked to environmental degradation. Furthermore, increasing access to renewable energy technology guarantees that all communities may contribute to and benefit from a more sustainable and healthy future.

• Create Green Jobs: Decarbonization introduces employment opportunities in the renewable energy sector to enhance economic activity among the people. The local governments of Florida stated that they have established participatory targets concerning the emission of greenhouse gases and are bearing several costs to achieve those targets. The former indicates that the growth rate of renewable energy generation employment in Florida between 2018 and 2022 was an average of 13%, considerably higher than the over 1% rate for the United States. Non-renewable jobs had negative growth in both the state and the US. Electric vehicle sales are also increasing, solar capacity is expanding, and solar microgrids are being installed to reduce carbon footprints and increase resilience.

• Foster Sustainable Development: Owing to sustainable development, decarbonization generates employment and global investment and does not depend on carbon-based products. Additionally, decarbonization addresses global goals, especially the Paris Accord, which seeks to embrace equity and stability for communities and achieve energy security.

Conclusion

Decarbonization is more than just an environmental imperative; it is also a catalyst for a more sustainable and prosperous future. By embracing cleaner technology, climate change can be tackled, air quality can be improved, energy independence can be attained, and the environment can be safeguarded. Decarbonization will not be easy, but the potential advantages are apparent. By collaborating, governments, corporations, and individuals can unleash the power of decarbonization and create a future in which a healthy planet and a flourishing society coexist.