How should we view the West’s abandonment of carbon neutrality goals?

【Answer 1】 01 From the Paris Agreement to Net-Zero Retreat Net-zero emissions refer to reducing greenhouse gas emissions as close to zero as possible, with any remaining emissions reabsorbed from the atmosphere—such as by oceans and forests. In 2015, nearly all countries agreed under the Paris Agreement to limit global temperature rise to “well below” 2°C above pre-industrial levels. Over 140 countries—including the United States and the European Union—have since formulated plans to achieve net-zero emissions, albeit on differing timelines. According to analysis by the non-profit Energy and Climate Intelligence Unit, meeting the Paris Agreement’s critical target of limiting global warming to 1.5°C requires global carbon emissions to reach net zero around mid-century. For high-income countries like the United States, this implies achieving net zero by 2050—or earlier—whereas low-income countries may reach this goal in the 2050s or 2060s. However, since the Paris Agreement was signed in 2015, the U.S. has repeatedly vacillated on its climate commitments. During Trump’s first term (2017–2021), the U.S. withdrew from the Paris Agreement; the Biden administration (2021–2025) rejoined it and pledged net-zero emissions by 2050. Yet following Trump’s victory in the 2024 election, he swiftly appointed Chris Wright as Secretary of Energy. Wright, founder of Liberty Energy, is a staunch advocate for fossil fuels. Upon taking office, Wright began systematically dismantling his predecessor’s green policies. He personally selected climate skeptics to author a report—which the U.S. Environmental Protection Agency (EPA) is now using to undermine federal regulation of greenhouse gases. This report challenges foundational principles of climate science, including the accuracy of climate models, the threat posed by sea-level rise, and the link between extreme weather events and human fossil fuel use. Simultaneously with the Department of Energy’s report release, the EPA proposed rescinding its 2009 “Endangerment Finding”—a legal determination that greenhouse gas emissions threaten public health and welfare, and the statutory basis for numerous U.S. climate regulations, including vehicle and power plant emission standards. In February 2025, Wright publicly labeled the net-zero goal “evil,” criticizing similar initiatives promoted by countries such as the United Kingdom. In August, the U.S. formally rejected the International Maritime Organization’s (IMO) proposed net-zero framework—a plan aiming to cut shipping emissions via a global carbon tax. Wright denounced it as a “global carbon tax” that would “harm American consumers and the shipping industry.” On September 4, during a Fox News interview, Wright reiterated that net zero is “unachievable,” elaborating further at the All-In Summit that it would trigger soaring energy costs and declining grid reliability. This time, he bluntly called the net-zero target “silly” and questioned its scientific foundations. He argued that global energy demand is growing far faster than renewable supply, and that forcing a rapid transition to net zero would provoke energy shortages and economic recession—a stance fully aligned with Trump’s “America First” energy policy, which prioritizes fossil-fuel dominance to ensure energy independence and low-cost supply.

Interpretation of Transition Finance (V): Challenges of Net-Zero Commitments

【Answer 2】 Although many entities and financial institutions have responded to international organizations’ calls and initiatives by making net-zero commitments in their operations, numerous challenges remain—particularly several key challenges that are especially difficult for developing countries. First, emissions data for small and medium-sized enterprises (SMEs) and emerging markets originates directly from those entities themselves, resulting in substantial data gaps. Issues concerning data reliability, forward-looking capability, and accuracy trouble financial institutions. When financing decisions rely on such data, discrepancies—and even major distortions—can arise, leading to significant calculation errors that affect both loan amounts and financial security. Moreover, corporate disclosures often lack dedicated professional oversight—an important root cause of these problems. The market suffers from an acute shortage of trained professionals, while public policy offers insufficient incentives or training programs. This scarcity of expertise severely compromises the quality of corporate disclosures; therefore, robust measures must be taken to train large numbers of qualified professionals and deploy them across real-economy entities and financial institutions. Second, net-zero commitments may severely impact short-term profitability, posing major challenges and threats to corporate development. Inconsistencies in implementing such commitments—and disruptions to long-term investment continuity—can adversely affect firms. Likewise, aligning long-term investment portfolios and financing needs with net-zero goals presents distinct challenges for financial institutions.

UBS Says Clients Expect Firms Axing Net Zero to Face Market Hit

May 18, 2026

UBS analysts report investors anticipate negative share price impacts for companies abandoning net zero emissions targets, despite regulatory scaling back and geopolitical disruptions affecting energy demand.

bloomberg

2026-05-18

UBS Says Clients Expect Firms Axing Net Zero to Face Market Hit

UBS Says Clients Expect Firms Axing Net Zero to Face Market Hit

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