Faulty climate targets: Net-zero pledges won’t halt global warming but breakthrough innovations might

The deal is being slammed by activists for failing to agree on any fossil-fuel phase-out. But this is reality asserting itself.

Poor and middle-income countries, home to roughly 85% of humanity, rightly refuse to sacrifice growth and poverty reduction at the altar of keeping the planet’s temperature rise to 1.5°C. And despite their grand promises, Western nations have a diminishing ability to affect the trajectory of global warming.

For decades now, Western governments, especially in the EU—the richest group of nations still in the Paris Agreement—have prioritized carbon emission cuts over higher economic growth, spending trillions of dollars to convince consumers to adopt electric cars and accept more expensive but less reliable wind and solar power. All these expensive efforts are barely making a dent.

The global decarbonization rate, or the annual percentage reduction in CO2 emissions per unit of global GDP, has remained roughly constant since the 1960s, with no change after the 2015 Paris Agreement. Global emissions have skyrocketed, reaching a new high in 2024. Despite this, climate campaigners are unrealistically demanding that the world quadruple its decarbonization rate.

Why are emissions still increasing when the EU and US spent more than $700 billion in 2024 on green investments like solar panels, wind turbines, batteries, hydrogen, electric cars and power grids? Because rich-world emissions matter very little for climate change in the 21st century.

While the West dominated emissions in previous centuries, the vast amount of future emissions will come from China, India, Africa, Brazil, Indonesia and many other countries clambering out of poverty. One recent scenario shows that with current policies, just 13% of CO2 emissions over the rest of this century will come from most-rich OECD countries.

The West’s pledge of achieving net-zero emissions by 2050 will cost hundreds of trillions of dollars and probably do little. Most likely, the policy will simply shift more energy-intensive production to the rest of the world with little overall impact on emissions—just as we have seen electric car battery making shift to China’s coal-powered economy.

If rich countries try to fix this problem with carbon border taxes, the costs will escalate further for both rich and poor countries, while robbing the poor of an opportunity for export-driven growth.

If we super-optimistically assume the West ends up actually eliminating all its own emissions without further leakage by 2050, global CO2 emissions over this century will reduce by just 8%. Run through the UN’s own climate model, the resulting reduction in global warming would be minuscule. By 2050, the West would have reduced the global rise in temperature by just 0.02° Celsius. Even by the end of the century, temperature rise will be reduced by less than 0.1° Celsius.

The West’s message of self-sacrifice will not go far in countries that desperately want energy-driven development. Poorer nations don’t want to emulate Germany’s huge climate-driven debt, Spain’s green blackouts or UK’s record-setting electricity prices.

There is a cheaper and more efficient approach: innovation. Throughout history, humanity hasn’t tackled major challenges through restrictions, but by innovating. When air pollution enveloped Los Angeles in the 50s, we didn’t ban cars but developed the catalytic converter that made them cleaner. When much of the world was starving in the 60s, we didn’t ask people to eat less, but came up with higher-yielding crops.

Now we need similar breakthroughs for green energy—but the world is all but ignoring innovation.

In 1980, after an oil-price shock, the rich world spent more than 8 cents of every $100 of GDP on green research to find energy alternatives. As fossil fuels became cheaper, this investment dropped. When climate concerns grew, in our dash to subsidize inefficient solar and wind, we ignored innovation. By 2023, the rich world was spending less than 4 cents out of every $100 of GDP. Total rich world spending adds up to just $27 billion—less than 2% of overall green spending.

The West should increase this to around $100 billion a year. This would enable a focus on technological breakthroughs. We could invest in fourth-generation nuclear energy from small modular reactors, or boost green hydrogen production along with water purification, or deploy R&D to develop next-generation battery technology and CO2-free oil harvested from algae. Carbon extraction, nuclear fusion and second-generation biofuels are among the other possibilities.

None of these technologies is currently efficient, but innovation only needs one or two to beat fossil fuels on that score and all countries will switch. Moreover, innovation will cost a tiny fraction of current and future net-zero spending.

Unfortunately, the leaders who jetted into Brazil’s rainforest for this year’s climate summit spent weeks fighting over—and failing to deliver—a ‘roadmap’ to cut fossil-fuel use. Most were fixated on mandates and subsidies, missing the power of smart research.

It’s time for the West to recognize its limited leverage and pivot from wasteful spending to game-changing tech investments that actually deliver results.

The author is visiting fellow at Stanford University’s Hoover Institution and author of ‘Best Things First’.