When it comes to climate targets, many different terms are cultivated. How does the net-zero goal differ from the carbon neutrality goal? What is meant by a carbon budget? This blog post will clarify terms related to climate targets in plain language to make the climate discourse easier to understand.

The first part of the blog series dealt with terms related to carbon footprint calculating. In the second part of the series, we focus on the concepts associated with emission reduction targets and shed jargon around them. We have included the most common terms in discussions on emission reductions.

The Paris Climate Agreement, and its attempt to limit global warming to 1.5 degrees Celsius above pre-industrial times, have laid the groundwork for setting climate targets for both states and companies. The terms below may have different meanings depending on whether you are looking at a state’s perspective or an individual company.

The carbon budget refers to the amount of carbon dioxide that can be released into the atmosphere while still meeting a particular climate target. According to the IPCC, a carbon budget of 460 billion tonnes of CO2e is required to reach the 1.5-degree emissions target, and even then, the target may not be met.

At the 2020 emissions level, this budget will be finished in the early 2030s.

A carbon sink can be nature’s mechanism or a human-made mechanism that absorbs carbon dioxide so that it does not return to the cycle to heat the climate. Increasing carbon sinks can combat and slow down climate change. The central carbon sinks are forests, soils, and seas. In Finland, for example, the size of carbon sinks in 2020 was just over a third of annual greenhouse gas emissions. It is important to note that the magnitude of a carbon sink describes the amount of carbon sequestrated from the atmosphere over a certain period and not, for example, the amount of carbon stored in forests over a long period.

Carbon neutrality is a condition where the amount of climate-warming greenhouse gas emissions in the atmosphere does not increase. For example, Finland has set a carbon neutrality target for 2035, which means that the sum of emissions does not exceed the number of carbon sinks.

Developed by the British Standard Institution, the PAS 2060 standard is perhaps the most advanced and widely used carbon neutrality standard globally, aiming to provide a clear framework and transparency for corporate carbon neutrality claims. According to the standard, if a company wants its operations or products to be carbon neutral, it must first determine its carbon footprint, reduce its emissions, and reliably compensate for the remaining emissions. In addition, companies must reduce the share of compensation annually. However, the standard does not specify a minimum number of emission reductions. It is up to the company to decide which level of ambition to set for its emission reductions. To avoid greenwashing, the company’s emission reduction target must be sufficiently ambitious and, where possible, support the national and international climate targets.

The Science-Based Target is an initiative developed in collaboration with the UN Global Compact, WWF, CDP, and WRI to encourage companies to commit to reducing climate emissions in line with the 1.5-degree target of the Paris Climate Agreement.

Net-zero means a balance between greenhouse gas emissions and removals from the atmosphere.

The SBTi Corporate Net-zero standard has been developed as part of the Science-Based Targets initiative. This standard defines what a net-zero goal means for businesses. According to the standard, to achieve the net-zero target, companies must reduce their scope 1, 2, and 3 emissions to zero or a level in line with the global or industry 1.5-degree target. The remaining emissions and any emissions that may occur later, after the target year, must be eliminated by permanently removing the emissions from the atmosphere.

A carbon-negative country, municipality, city, service, or product removes or sequesters more greenhouse gases from the air than it produces. Carbon negativity is the most ambitious of the climate targets.

In many cases, different emission reduction targets are mixed in marketing. When setting a target, it is essential to know the baseline level of emissions and decide on the method and standard based on which the target will be set. Whatever the goal, our own efforts to reduce emissions are central.

Want to understand the climate discussion better?

Check out our training and the first part of this blog series published in April, which clarifies terms related to carbon footprint calculating.