Some conclusions from reactions to UN IPCC’s report
When the UN’s Intergovernmental Panel on Climate Change (IPCC) released its latest report last Monday, it made for grim reading. The 3,949-page document will form the basis for government officials from 195 countries as they descend on Glasgow for the COP 26 climate summit in about three months.
The IPCC report was the 6th since 1990 and its first in around 8 years.
The report delineates five scenarios, with the most optimistic lowest emissions scenario limiting global temperature rises to 1.4 C and the highest emission scenario predicting global warming to reach 4.4 C by 2010.
The scientists irrevocably linked global warming to man-made CO2 and Green House Gas (GHG) emissions, warning that the last decade was the hottest in 125,000 years. They also irrevocably linked extreme weather events to human-made climate change.
The report was only released after the authors had consulted widely among governments and UN agencies to reach a consensus.
What ensued after publication has laid bare the fault lines in the global climate change debate.
UN Secretary-General Antonio Guterres likened the conclusions to a “code red for humanity” while US climate envoy John Kerry highlighted “the overwhelming urgency of the moment.”
The report’s conclusions are stark — especially as it made clear that the 1.5 C would most likely be reached within the next 20 years, which is much earlier than anticipated. (Up to now the broad consensus among client scientists was that global warming needed to be limited to 1.5 C by the end of the century compared to preindustrial levels.)
Several governments, particularly from the nations belonging to the Organization for Economic Cooperation and Development (OECD) agree with the findings of the report.
However, India, which is the world’s third largest GHG emitter, criticized the report, stressing that emissions should be measured on a per capita basis and not in absolute terms, and that countries with the largest historical emissions, particularly the developed countries of the OECD, should carry the heaviest burden.
China, the world’s largest GHG emitter, will not change its policies which are to reach peak emissions by 2030 and net zero by 2060.
The cacophony of voices from governments ranged from harsh criticism by Australian Prime Minister Scott Morrison and Indian Environment Minister Bhupendra Yadav to full endorsement by the US and some European governments. This shows that combating climate change will not be easy and that there is no readily available consensus emerging ahead of the COP26 meeting.
We can draw six main conclusions both from the report and from the reactions to it:
Firstly, climate change is real and needs to be addressed. There is a clear link between global warming and extreme weather events.
Secondly, emerging economies will be disproportionately exposed to the effects of climate change — particularly by rising sea levels and extreme weather events. They also need to be able to supply affordable energy to their growing populations.
Thirdly, the balance between affordable energy for all and a reduction of GHG emissions represents one of the big conundrums of our times. The IPCC report stipulates that technologies which remove carbon are not ready to be deployed at scale. However, they will become very important, if the aforementioned conundrum is to be resolved. Technology has been behind most big achievements of humanity and we should not let what is today become the enemy of what can lead to a brighter future.
Fourthly, the developed nations need to make good on their promise to raise $100 billion a year to help poor countries invest in green technologies and adapt to rising temperatures and sea levels. This mechanism is part of the Paris Agreement but has as yet been woefully underfunded. Burden sharing and solidarity of the rich with the poor is important if climate change is to be addressed at the global level.
In the Paris Agreement, finance was allotted a big role in addressing climate change. The IPCC report highlighted the costs to humanity and the economy if the rise in temperatures cannot be halted, leading us to the fifth point: While ESG (environmental, social, and governance) investing has become the growth industry of the day, many funds do not hold the promise of their green credentials — one reason being that addressing climate change is a long-term objective while financial returns are still subject to short-term metrics. Chris Meyer (no relation), manager of stewardship investing research and advocacy at Praxis Mutual Funds, concludes that the report demands a sharper focus and faster adjustments of investor behavior.
Lastly, all of the above proves that Saudi Arabia is steering a good course with the Saudi and Middle East green initiatives, renewables and green hydrogen projects. It will in the long run also pay off to develop further the CCUS (carbon capture, utilization and storage) technology and the concept of the circular carbon economy, because combating climate change is a long game.
During last month’s G20 meeting of energy and environment ministers, the Kingdom’s energy minister, Prince Abdul Aziz bin Salman deployed his great negotiating skills when he worked towards achieving consensus between Russia, India, China and the position of OECD countries. Looking at the varied reactions to the IPCC report, the Kingdom clearly has its role to play in Glasgow.
• Cornelia Meyer is a Ph.D.-level economist with 30 years of experience in investment banking and industry. She is chairperson and CEO of business consultancy Meyer Resources. Twitter: @MeyerResources