Decarbonization

Decarbonization is the process of reducing carbon dioxide and other greenhouse gas emissions in an economy with the aim of achieving net-zero or low-carbon operation. It involves changes across energy supply, transportation, industry, buildings, and agriculture, and often relies on replacing fossil fuels with low-carbon energy sources while improving energy efficiency and reducing overall demand.

Key strategies include decarbonizing electricity through renewable energy sources and nuclear power, electrifying end uses such as transport and heating, and expanding energy efficiency measures. The deployment of carbon capture, utilization, and storage (CCUS) where emissions are difficult to eliminate, and the use of hydrogen as a flexible energy carrier, are also considered important. Supporting infrastructure like grid modernization, energy storage, and digital systems facilitates the integration of variable renewables and new technologies.

Policy instruments commonly used to advance decarbonization include carbon pricing, through taxes or cap-and-trade systems; subsidies and incentives for clean energy and efficiency; performance standards and phaseouts of high-emission fuels; and targeted investments in research, deployment, and workforce training. Collaboration among governments, industry, and financial institutions is typical. Progress is measured by metrics such as emissions intensity, national carbon budgets, and alignment with international targets like net-zero goals and 1.5 to 2 degrees Celsius pathways.

Challenges include ensuring reliable energy supply and affordability, maintaining energy security, and managing the social and economic transitions for workers and communities dependent on fossil fuels. Costs and benefits vary by region and sector, and large, long-term capital commitments are often required. Decarbonization features prominently in national plans, corporate strategies, and international climate frameworks as a pathway to reduce dependence on fossil fuels and limit global warming.