The latest report of the Intergovernmental Panel on Climate Change(IPCC) - the intergovernmental body of the United Nations tasked with assessing the science related to climate change - was published in April 2022. This is the sixth assessment report of Working Group III, which focuses on mitigation of climate change through interventions in key sectors such as energy systems, agriculture and cities, the role of policy in continuing to drive change, and the synergies between climate action and sustainable development.
Here are some key takeaways from the perspective of Globalfields and our work.
1) Climate science cannot be disputed any longer. Yet, it is astonishing to see how many organisations still put scientific evidence aside in order to continue doing business as usual. In our training to the corporate and financial sectors in several continents, we routinely present climate science, paleo-climate, historical as well as current climate data, and key data on emissions, vulnerability assessments, and the planetary boundaries to underscore the link between science and policy, and between policy and investments.
2) It has now become imperative that the inflection point on greenhouses gas emissions has to happen as soon as possible. In reality, the reduction in anthropogenic emissions should have already begun seven years ago, in order to be able to achieve the targets established in the Nationally Determined Contributions under the Paris Agreement. Unfortunately, pledges have not translated into significant emission reductions, with the exception of 2020, when we witnessed a drastic reduction in industrial output and travel due to Covid-19 restrictions. Planet Earth has continued to warm.
3) Achieving low carbon development and economic growth, as well as climate resilient investments are indeed possible. The report clearly emphasises that the scaling up of innovation and climate technologies globally, when fully supported by enabling policy packages, has already led to widespread adoption and lowering of costs. As mentioned by other commentators, the cost of green technologies such as in renewable energy generation as well as in technologies for energy efficiency in both heating and cooling, is now lower than in the past, and continues to decline. There are of course exceptions in some specific markets and contexts, but those exceptions should not be taken as the norm. For example, it is recognised that some countries may not have access to these technologies or to climate innovation, and/or may have lower capacity to provide regular maintenance while access to both financial resources and technical skills are also limited. Weaker enabling conditions and overall limited access to climate finance have hampered the full uptake of climate-compatible innovation in the Global South. Yet, these exceptions should not detract from the general argument that green technologies have now become cheaper. In addition, cost considerations should also include the assessment of financial implications arising from climate-related transition, physical and liability risks.
4) Following on from the above, then we need to support those countries and clients that may not have the necessary resources to invest in the green and sustainable transition to help them bridge the gap between what is needed and their ability to finance these solutions. This can be done with dedicated and well-understood instruments, in particular blended finance, which can come in the form of several potential instruments, ranging from technical assistance, the provision of investment grants, risk cover, concessional debt and equity.
5) More financial and human resources, capacity and time should be dedicated to integrating actions in climate change and other environmental and social objectives, such as biodiversity preservation and sustainable development. In particular, both mitigation and adaptation interventions that have nature-centred solutions at their core can generate important co-benefits that deliver social, governance and environmental outcomes. For example, the report emphasises that land-based options such as reforestation and forest conservation, avoided deforestation and restoration and the conservation of natural ecosystems and biodiversity, can have multiple synergies with the Sustainable Development Goals. Designing solutions that pursue these multiple objectives will be at the heart of our ability to address the dangers posed by a changing climate, and indeed to limit the change as much as we can.
6) Finally, we need more focus on integrated approaches that bridge sectoral solutions and offer packages of technical assistance, capacity building as well as investment in order to drive sustainable change.
Cover photo credit: Rabih Shasha (unsplush.com).