Deep De-Carbonization

Goverments take their gloves off: radical mitigation targets enforced to stop global warming. 

Pressure is building up to take radical action to de-carbonize the economy, as the window for mitigation is closing. A substantial emission reduction is needed before 2030 if global warming is to be kept below 2°C. Current, mostly efficiency-focused policies might thus be replaced by making companies pay the true cost of their GHG emissions. True costs are estimated in arrange of USD 37-220 per ton CO2 which would have meant up to EUR1.2 bn for Evonik in 2015.

Policy makers are confronted with increasing international pressure to enact stricter mitigation regulations, through the 2015 Paris Agreement, a first universal, legally-binding climate agreement, as well as by campaigns of the biggest international lenders, the IM F and the World Bank. The World Bank works with 18 emerging economies to create carbon pricing systems. The IMF recommends carbon taxes to closed deficits and fulfill Paris pledges to the countries it is advising.

Several countries have started to change policy and are about to transition into eco-civilizations, changes supported by benefits beyond mitigating climate change (e.g. health benefits). For instance, China will introduce a cap-and-trade system in 2017 and the German Bundesrat has proposed a ban on internal combustion engines by2030. As the political landscape transforms from merely lip-services to radical actions industry might have to prepare to deeply cut emissions – or pay.


By 2030 China targets a reduction of its CO2-emissions by 65% per unit of GDP from 2005 levels.