The GOOD roadmap of Carbon Neutral

Contact the author if you have any question or comments please, thanks for reading. (Bill: support@1mi1.cn)

After President Xi proposed the goal of carbon-neutral in 2060, many companies raised the question: How do we achieve carbon-neutral?

Regarding carbon-neutral, before explaining the operational details at the implementation level, let's sort out the goal itself and the way of thinking that supports it so that we don't get caught up in the blind misunderstanding.

Carbon neutral means quite differently a concept for business, for people and for a country, even with the same goal of achieving zero carbon emission, the scope, content, and focus of follow-up implementation will vary dramatically. The difference also exists within the business itself: when we talk about carbon-neutral, we need to be clear about which level of carbon-neutral we're talking about: the company, products, or the supply chains.

Now let’s dive into the discussion of the GOOD roadmap to carbon-neutral: what exactly is it and how it can help a business achieve carbon neutrality?

In a word, the GOOD roadmap follows the logic of ecological design and system thinking, is it a good approach indeed or not, now let’s explore together.

G: Gap analysis - Literally, we want to understand the gap between the status quo and the carbon-neutral we're trying to achieve. Carbon-neutral means zero or negative carbon emissions, which most businesses do not accomplish yet. Now let’s look at the gap analysis of carbon-neutral on the three-level of business: corporate, product, and supply chain.

If we want to be carbon-neutral at the corporate level, we need to know the level of carbon emissions of companies in a day, a month, or even a year, through analyzing

• level I: the carbon dioxide and other greenhouse gas emissions caused by the burning of fossil fuels or reactions in the vessels during the manufacturing process within our own production;
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• Level II: the indirect emissions in the power generation process by the burning of fossil fuel to generate electricity and other energy consumed by our manufacturing plants, and
  
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• Level III: the upstream emission caused by the manufacturing of raw materials purchased to sustain the company’s own production.

From the combined direct and indirect emission and emission from the raw materials purchased, we know the total amount of carbon emitted by our business operation in a day, a month and a year, and the gap between carbon-neutral: 1,000 tons, 5,000 tons or 100,000 even 1 million tons of CO2 we emitted;

If we want to be carbon-neutral at the product level, then we need to analyze the direct and indirect carbon emissions from the raw materials, transportation, manufacturing, use, and even end-of-life processes of our products, and then compare the result to the carbon neutral benchmark i.e., zero carbon dioxide emission, we can see the gap between our products and carbon-neutral products.

If it is the carbon-neutral of the supply chain we are aiming for, then we need to do the extra analysis in addition to understand the enterprise's own level of carbon emissions, we also need our upstream and downstream suppliers to participate in the enterprise-level carbon emissions analysis, so that we can know that our first, second, third, and even more tiers of suppliers' carbon emissions level, based on this figure, we will realize the gap to supply chain carbon-neutral;

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O: Opportunity Analysis – in the second phase of the GOOD roadmap, we have two tasks at this stage:

1.       the first task to know more about the main sources of carbon emissions that contribute to the gaps identified during the first phase of the GOOD roadmap, and

2.       the second task is to analyze where the greatest opportunity to reduce carbon emissions lies, and to understand what benefits can be generated through emission reduction.

Through conducting opportunity / benefit analyses, we can identify the important life cycle stages, materials, and processes that cause major carbon emissions, but we cannot stop there, we need to further dig out the reasons for the high emissions of these materials, stages, and processes: is it due to inefficiency and high energy-density? Or is it a matter of material selection, structural design, and maybe unreasonable functional system design? After in-depth analysis of the root causes of the problem, we can be more precise in preparing the next step to optimize the design. In addition, we also need to answer what is the benefit for enterprises, products, supply chains, consumers, investors, and the environment and society. Is the benefit more on ecological protection, social justice, economic growth, or is it mainly for the enterprise's own brand reputation or competitiveness? just to name a few examples.

Based on the clear understanding of the opportunity and the benefits behind, our roadmap of achieving carbon neutral with come from a firm ground base, rather than just a blind wish or like leave drifting in the running water of so-called carbon neutral.

O: Obstacle - Once we understand the gaps and find opportunities for improvement, we also need to look at the current situation and characteristics of the enterprise, products, and supply chain itself, analyze barriers toward carbon emission reduction and carbon-neutral, so as to provide clues to the development of specific design and implementation in the next phase of the GOOD roadmap.

There are many obstacles, the first one we can think of might be technology, yes, science and technology is the first productivity engine, without which our products and services are architecture in the air without support. Therefore, to achieve carbon-neutral, technology development is fundamental, we need to find the shortboard in technology if the technology is backward, we need to look for more advanced technology, if the material is not good, replace it with more environmentally friendly materials, if the energy is a fossil fuel with high carbon content, then look for renewable energy substitute, and so on;

In addition to technology, possible barriers may also include capital, talent, tools, policies, markets, and so on. Carbon neutral is an emerging matter, the above-mentioned obstacles can become bottlenecks to achieve carbon neutrality for business. However, promising indications show that the transformation toward a carbon-neutral friendly environment is happening day and night, investments (e.g. responsible investment, the rise of ESG, etc.), policies (2060 carbon-neutral targets in China and similar policies in other countries), markets (global supply of low-carbon energy and demand for green products such as photovoltaics, wind power, and green buildings) all show the sign of such positive change. Realizing the trend of low carbon economy development, the business can plan and take actions ahead, to analyze their own gaps, opportunities, obstacles and based on which, make wise decisions in phase four: design.

D: Design - It's not until the last step that we use the word design. In fact, the whole GOOD roadmap is a design process: we set goals, understand the gap, analysis the ecological ‘pain points’ (i.e., hotspot in carbon emission), combing opportunities and benefits, facing bottlenecks and problems, and finally we set out to find ways to solve the problem and take action.

With regard to ecological (low carbon) design, we can have different strategies and methods, whether it is energy saving materials in product design, efficiency, and functional upgrading or structural optimization and policy design on the organizational system, we all need to recognize the reality: design is not only about making a prototype and then throw it to the market – it is a game over if you think the design is over when the product is designed and made - carbon-neutral is the same, we can't expect to design a silver bullet product and service to achieve the goal of carbon-neutral for enterprises, products, supply chains, and even the whole society, instead, we need to follow the GOOD roadmap approach, carry out systematic ecological design, step by step, and eventually we will accomplish carbon neutrality and maybe more.

Finally, I would like to add a word that carbon-neutral was a concept that environmentalists and social activists were originally promoting, and now it becomes the enterprise's own business. Like all new endeavor, it will be certainly uncomfortable in the beginning, like all new experience of jumping out of the comfort zone to try new worlds and improve new skill, this is a learning and cognitive upgrading process for all. In the process, enterprises can no longer mind their own business behind closed doors, instead, enterprises need to open the door and invite dialogues and support from external resources, including research and consulting organization and partners such as 1mi1 platform, as a system challenge, carbon-neutral requires a system thinking and function, and it needs a GOOD roadmap.