Reframing the Net-Zero Debate from Obligation to Opportunity: The Promise of the Circular Carbon Economy

A notable energy transition challenge stands at the forefront of the race to attain a global net-zero economy. Regardless of the pathways taken, hydrocarbons will remain a significant energy source and input for the manufacturing and services industry for the next couple of decades. Current global strategies to reduce the use of hydrocarbons bring about various economic and political problems regarding their adoption and implementation. These problems often emerge from the fact that for most players worldwide, energy transition policies are not incentive compatible. Securing support from local, non-state players especially gains importance in making these policies viable. Policymakers should be mindful of bottom-up solutions from parties at all levels, as each responds to a distinct set of challenges and opportunities. This chapter focuses on one such initiative toward an inclusive transition to the global net-zero economy, namely, the circular carbon economy (CCE) concept. The CCE concept contributes to the debate on the challenges of a global transition to a net-zero economy. Introduced to the worldwide discussion of a net-zero future during the Saudi presidency of the Group of Twenty (G20) in 2020, CCE highlights the opportunities for carbon-intensive manufacturers that will arise from creating a global market for recapturing or otherwise eliminating externalities of carbon. In doing so, CCE emphasizes holistic thinking in creating value from carbon at each step, from hydrocarbon extraction to delivering products and services. More specifically, we show how CCE facilitates emissions reduction in each step of the value chain from extraction to end-user. We also argue that the CCE framework can help secure the support of states and industries that are expected to suffer most from the energy transition’s redistributive impacts, hence providing a tailwind to transitioning to a global net-zero economy. In relation, CCE also carries the potential to bring an inclusive angle to debate on achieving equity among actors with varying levels of differentiated development in burden sharing toward a low-carbon future.