Without immediate, deep emissions reductions across all sectors, it will be impossible to limit global warming to 1.5°C. We have the tech and know-how to halve emissions by 2030, and the impacts are already being seen — but fossil fuel financing must end.
The IPCC is back this week — not to drill further down into the direness of our collective situation due to the climate crisis, but to highlight that all is not in fact lost: While, without immediate and deep emissions reductions across all sectors, limiting global warming to 1.5°C is still undeniably beyond reach, there is increasing evidence of effective climate action.
The Summary for Policymakers of the IPCC Working Group III report, Climate Change 2022: Impacts, Adaptation and Vulnerability was approved today by 195 member governments of the IPCC. It is the third instalment of the IPCC’s Sixth Assessment Report (AR6), which will be completed this year.
The bad news
The report confirms that existing and planned fossil fuel projects are more than the climate can handle, confirming that without sharp reductions in greenhouse gas (GHG) emissions and fossil fuel use, we are, as Antonio Guterres says, “on a fast track to climate disaster.” The report also warns investors of stranded fossil fuel assets that will amount to $4 trillion in a world where warming is limited to 2°C, and even more in a world where it is limited to 1.5°C.
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As we know, limiting global warming will require major transitions in the energy sector — including a substantial reduction in fossil fuel use, widespread electrification, improved energy efficiency and scaling of alternative fuels. Among the hopeful findings of the latest report: Since 2010, there have been sustained decreases of up to 85 percent in the costs of solar and wind energy, and batteries. An increasing range of policies and laws have enhanced energy efficiency, reduced rates of deforestation and accelerated the deployment of renewable energy.
“We are at a crossroads. The decisions we make now can secure a livable future. We have the tools and know-how required to limit warming,” said IPCC Chair Hoesung Lee. “I am encouraged by climate action being taken in many countries. There are policies, regulations and market instruments that are proving effective. If these are scaled up and applied more widely and equitably, they can support deep emissions reductions and stimulate innovation.”
The good news
“Having the right policies, infrastructure and technology in place to enable changes to our lifestyles and behavior can result in a 40-70 percent reduction in greenhouse gas emissions by 2050. This offers significant untapped potential,” said IPCC Working Group III Co-Chair Priyadarshi Shukla. “The evidence also shows that these lifestyle changes can improve our health and wellbeing.”
The report outlines ways in which every actor can play its part. For example:
Cities and other urban areas offer significant opportunities for emissions reductions — through, for example, lower energy consumption (such as by creating walkable cities and improving/electrifying public transport), and enhanced carbon uptake and storage using nature. Increasing networks of parks and open spaces, wetlands and urban agriculture can reduce flood risk and reduce heat-island effects. Electrification with renewables and shifts in public transport can enhance health, employment, and equity.
Industry — which accounts for about a quarter of global emissions — can reduce emissions by using materials more efficiently, reusing and recycling products, and minimizing waste. For basic materials — including steel, building materials and chemicals — low- to zero-emission and circular production processes are at their pilot to near-commercial stage. Mitigation in industry can reduce environmental impacts and increase employment and business opportunities.
Agriculture, forestry, and other land use can provide large-scale emissions reductions and remove and store carbon dioxide at scale. However, even an immediate, global adoption of regenerative farming practices — which would necessarily benefit biodiversity; help us adapt to climate change; and secure livelihoods, food and water, and wood supplies — could not compensate for delayed emissions reductions in other sectors.
The next few years are critical
In the scenarios assessed, limiting warming to around 1.5°C (2.7°F) requires global GHG emissions to peak before 2025 at the latest, and be reduced by 43 percent by 2030; at the same time, methane would also need to be reduced by about a third. Even if we do this, it is almost inevitable that we will temporarily exceed this temperature threshold; but we could return to below it by the end of the century.
The global temperature will stabilize when CO2 emissions reach net zero. For 1.5°C (2.7°F), this means achieving net-zero CO2 emissions globally in the early 2050s; for 2°C (3.6°F), it is in the early 2070s.
This assessment shows that limiting warming to around 2°C (3.6°F) still requires global greenhouse gas emissions to peak before 2025 at the latest, and be reduced by a quarter by 2030.
Climate finance groups call on banks to stop finally funding fossil fuels
The new IPCC report comes as investors prepare to vote on a slate of shareholder resolutions at the annual general meetings (AGMs) of the six largest US banks and several major US insurance companies. The resolutions call for financial companies to stop all financing activities for new fossil fuel expansion. Ahead of the AGMs, Stop the Money Pipeline — a coalition of over 200 organizations — has launched a campaign to encourage investors to vote yes on the resolutions. Stop the Money Pipeline is also pushing banks and insurance companies to pass policies that would prohibit lending, underwriting and insuring to corporations engaged in fossil fuel expansion.
As Brett Fleishman, Director of Finance Campaigns at 350.org, asserts: “The IPCC report on climate change mitigation made two important points regarding climate change and fossil fuel finance. The first is that finance flows for fossil fuels are still greater than those for climate adaptation and mitigation. And the second is that meeting the US government’s climate goals of limiting global warming to 2⁰C or below will leave a substantial amount of fossil fuels unburned — up to $4 trillion in stranded assets. We need our government and financial regulators to wake up to this contradiction.”
Awareness of the critical link between the finance world and potential for a climate-resilient future continues to grow. More and more consumers are ditching banks that finance fossil fuels; and asset managers such as BlackRock and Vanguard are being called out for hedging their bets on fossil fuels and their outright lack of climate action, respectively. Banking giants such as HSBC are making definitive commitments to end coal financing; but many major players continue to slow progress behind the scenes.
In the five years after the Paris Agreement was adopted, six US banks (JPMorgan Chase, Citigroup, Wells Fargo, Bank of America, Morgan Stanley and Goldman Sachs) provided nearly $500 billion in lending and underwriting to the 100 corporations most aggressively expanding fossil fuel operations; Chase, Citigroup, Wells Fargo and BofA are the world’s four largest providers of lending and underwriting to those same 100 companies. US-based insurance giants AIG, Travelers, Liberty Mutual and Chubb are among the top 10 insurance providers to the oil and gas industry, globally.
“Today’s IPCC report once again makes clear what science has been telling us for years: For a shot at a liveable future, we must get off fossil fuels as fast as possible,” says Jamal Raad, executive director of Evergreen Action — a member of the Stop the Money Pipeline coalition. “Scientists and experts across the board have already outlined what must be done to defend our most vulnerable communities, protect our collective livable future, and mitigate the worst effects of climate change. We must act now — not in six months, not after an election year; now.”
Meanwhile ... the Securities and Exchange Commission is receiving comments on its proposed climate risk disclosure rules that will require companies to disclose their climate-related risks and emissions.