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Carbon credits feature prominently in corporate climate strategies and have sparked public debate about their potential to delay companies’ internal decarbonisation. While industry reports claim that credit purchasers decarbonise faster, rigorous evidence is missing. Here, we provide an in-depth analysis of 89 multinational companies’ historical emission reductions and climate target ambitions. Based on self-reported environmental data and more than 400 sustainability reports, we find no significant difference between the climate strategies of companies that purchased credits and those that did not. Voluntary offsetting is not a central part of most companies’ climate strategies, and many pass credit costs directly onto their customers. While the companies within our sample retired one-fourth of all carbon credits in 2022, the top five offsetters’ expenditures on voluntary emission offsetting are, on average, only 1 percent relative to their capital expenditures. For most companies, carbon credits are, therefore, unlikely to crowd out internal decarbonisation measures. Yet, we document that for large-scale offsetters in the airline industry, carbon credit purchases competed with financing internal decarbonisation measures. This study of 89 multinational firms finds no significant link between voluntarily offsetting emissions and decarbonization speed. Firms spend little funds on carbon credits, and emission offsetting is not a central part of their climate strategies.

Carbon markets play an important role in firms’ and governments’ climate strategies. Carbon crediting mechanisms allow project developers to earn carbon credits through mitigation projects. Several studies have raised concerns about environmental integrity, though a systematic evaluation is missing. We synthesized studies relying on experimental or rigorous observational methods, covering 14 studies on 2346 carbon mitigation projects and 51 studies investigating similar field interventions implemented without issuing carbon credits. The analysis covers one-fifth of the credit volume issued to date, almost 1 billion tons of CO 2 e. We estimate that less than 16% of the carbon credits issued to the investigated projects constitute real emission reductions, with 11% for cookstoves, 16% for SF 6 destruction, 25% for avoided deforestation, 68% for HFC-23 abatement, and no statistically significant emission reductions from wind power and improved forest management projects. Carbon crediting mechanisms need to be reformed fundamentally to meaningfully contribute to climate change mitigation. Carbon markets are key in climate strategies, but only 16% of carbon credits represent real emission reductions, based on a study of 2,346 projects. Reforms are needed to improve the effectiveness of carbon crediting mechanisms in addressing climate change.

To achieve net-zero emissions, public policy needs to foster rapid innovation of climate technologies. However, there is a scarcity of comprehensive and up-to-date evidence to guide policymaking by monitoring climate innovation systems. This is notable, especially at the center of the innovation process, where nascent inventions transition into profitable and scalable market solutions. Here, we discuss the potential of large language models (LLMs) to monitor climate technology innovation. By analyzing large pools of unstructured text data sources, such as company reports and social media, LLMs can automate information retrieval processes and thereby improve existing monitoring in terms of cost-effectiveness, timeliness, and comprehensiveness. In this perspective, we show how LLMs can play a crucial role in informing innovation policy for the energy transition by highlighting promising use cases and prevailing challenges for research and policy.

Carbon dioxide removal plays an important role in any strategy to limit global warming to well below 2 °C. Keeping abreast with the scientific evidence using rigorous evidence synthesis methods is an important prerequisite for sustainably scaling these methods. Here, we use artificial intelligence to provide a comprehensive systematic map of carbon dioxide removal research. We find a total of 28,976 studies on carbon dioxide removal—3–4 times more than previously suggested. Growth in research is faster than for the field of climate change research as a whole, but very concentrated in specific areas—such as biochar, certain research methods like lab and field experiments, and particular regions like China. Patterns of carbon dioxide removal research contrast with trends in patenting and deployment, highlighting the differing development stages of these technologies. As carbon dioxide removal gains importance for the Paris climate goals, our systematic map can support rigorous evidence synthesis for the IPCC and other assessments.

Increasing the development and diffusion of climate change mitigation technologies on a global scale is critical to reaching net-zero emissions. We have analysed over a quarter of a million high-value inventions in all major climate change mitigation technologies patented from 1995 to 2017 by inventors located in 170 countries. Our analysis shows an annual growth rate of 10% from 1995 to 2012 in these high-value inventions. Yet, from 2013 to 2017, the growth rate of these inventions fell by around 6% annually, likely driven by declining fossil fuel prices, low carbon prices and increasing technological maturity for some technologies, such as solar photovoltaics. Invention has remained highly concentrated geographically over the past decade, with inventors in Germany, Japan and the United States accounting for more than half of global inventions, and the top ten countries for almost 90%. Except for inventors in China, most middle-income economies have not caught up and remain less specialized in low-carbon technologies than high-income economies. Achieving ambitious climate goals requires the development of new technologies at rapid pace. Probst et al. analyse global patent data and find that a growth period of inventions from 1995 to 2012 was followed by a decline of ~6% annually, while invention remains concentrated in just a few countries.

Developing and emerging economies are implementing local content requirements to spur domestic manufacturing, though their costs and benefits are not well understood and difficult to quantify. Here, we provide an empirical assessment of the short-term costs of local content requirements using a credible counterfactual. We analyse data on government-run solar photovoltaic auctions held in India between 2014 and 2017 and exploit the fact that not all of the auctioned contracts entailed local content requirements. We find that local content requirement policies resulted in a ~6% per kWh increase in the cost of solar photovoltaic power generated from those projects when compared to similar projects not subject to the same local content requirement policy. During this three-year time period, Indian solar panels remained around 14% more expensive than international panels. We found some evidence of short-term increases in domestic manufacturing capacity, yet during this short period Indian firms did not increase market share or break into export markets. Local content requirements are designed to promote development of local industry; however, their economic and technological benefits are not well understood. Using data from Indian solar photovoltaic auctions, Probst et al. show the economic costs and technical benefits of local content requirements in energy auctions.

Aligning development and climate goals means Africa’s energy systems will be based on clean energy technologies in the long term, but pathways to get there are uncertain and variable across countries. Although current debates about natural gas and renewables in Africa are heated, they largely ignore the substantial context specificity of the starting points, development objectives and uncertainties of each African country’s energy system trajectory. Here we—an interdisciplinary and majority African group of authors—highlight that each country faces a distinct solution space and set of uncertainties for using renewables or fossil fuels to meet its development objectives. For example, Ethiopia is headed for an accelerated green-growth pathway, but Mozambique is at a crossroads of natural gas expansion with implicit large-scale technological, economic, financial and social risks and uncertainties. We provide geopolitical, policy, finance and research recommendations to create firm country-specific evidence to identify adequate energy system pathways for development and to enable their implementation. Discussions abound regarding the future of African energy systems, yet they typically overlook the different starting points and development objectives of each country. This Perspective highlights these differences and calls for more context-specific attention to define low-carbon energy pathways.

The production and use of fossil fuels need to decline rapidly to limit global warming. Although global net-zero scenarios abound, the associated development ramifications for fossil fuel-producing low and lower–middle income countries (LLMICs), as well as adequate international responses, have been underexplored. Here we conceptualize that, depending on country context, three types of development transition follow from declining fossil fuel production and use for LLMIC producers, namely an energy transition, an economic transition and an equitable fossil fuel production transition. We propose a classification of these transitions, arguing that heterogeneity in LLMICs’ fossil fuel production and usage substantially impacts their pathways towards low-carbon development. We illustrate this by discussing different cases of fossil fuel-producing LLMICs, focusing on Mozambique, India, Lao PDR and Angola. We conclude by detailing context-specific international support portfolios to foster low-carbon development in fossil fuel-producing LLMICs, and call for a re-orientation of international support along principles of global solidarity. Development ramifications of global decarbonization efforts for fossil fuel-producing low and lower–middle income countries remain underexplored. This Perspective suggests three transition pathways for navigating these ramifications.

Increasing the development and diffusion of low-carbon technologies on a global scale is critical to mitigating climate change. Based on over two million patents from 1995 to 2017 from 106 countries in all major climate mitigation technologies, our analysis shows an annual average low-carbon patenting growth rate of 10 percent from 1995 to 2013. Yet, from 2013 to 2017 low-carbon patenting rates have fallen by around 6 percent annually, likely driven by declining fossil fuel prices and, possibly, a readjustment of investors' expectations and a stagnation of public funding for green R&D after the financial crisis. The Paris Agreement does not appear to have reversed the negative trend in low-carbon patenting observed since 2013. Innovation is still highly concentrated, with Germany, Japan, and the US accounting for more than half of global inventions, and the top 10 countries for around 90%. This concentration has further intensified over the last decade. Except for China, emerging economies have not caught up and remain less specialised in low-carbon technologies than the world average. This underscores the need for more technology transfers to developing and emerging economies, where most of the future CO2-emissions increases are set to occur. Existing transfer mechanisms, such as the UN Technology Transfer Mechanism and the Clean Development Mechanism, appear insufficient given the slow progress of technology transfer.