BusinessGreen’s quick guide to the IPCC’s landmark Working Group III report on climate solutions
The Intergovernmental Panel on Climate Change (IPCC) has this afternoon published a landmark guide to climate change solutions, the first report of its type in more than six years. The third in a trilogy of reports published over the last eight months by the IPCC as part of its sixth assessment review, the document offers policymakers around the world a peer-reviewed roadmap for the policies, investments, and technologies scientists believe are required to avoid climate catastrophe.
The document should serve as a clarion call for businessses, governments, and investors to get behind the net zero transition, with its headline warning that the Paris Agreement’s 1.5C temperature goal is under increasing threat and now requires “deep and immediate” emissions reductions if it is to be met.
Don’t have time to read the whole document? Here, BusinessGreen sums up some of its key findings and recommendations for how all actors can work together to deliver a greener, more equitable, lower carbon future.
The science
The next few years will be absolutely make or break for the world’s chances of reaching its agreed climate goals, the IPCC warns, calculating that both the Paris Agreement’s more stretching 1.5C limit and its 2C goal require greenhouse gas emissions to peak by 2025 at the latest.
To stabilise global temperature rise at 1.5C above pre-industrial levels, greenhouse gas emissions must then reduce by 43 per cent by 2030, according to the scientists, with emissions of methane cut by a third. In this scenario, temperatures would temporarily exceed the 1.5C limit but could be bent back down by the end of the century through the use of negative emissions projects, the report contends.
Limiting global temperatures to 2C, on the other hand, would still require global emissions to fall by a quarter by the end of this decade.
The report warns the world is currently falling far short of delivering on either goal, noting that policies in place during 2020 put the global economy on track for a devastating 3.2C of global temperature rise by 2100. While there has been progress in decarbonising industrial processes and the energy mix, these gains have been offset by rising emisisons from industry, energy supplies, transport, agriculture, and buildings, the report notes.
The cumulative impact of national climate plans announced prior to COP26 Climate Summit – known as Nationally Determined Contributions (NDCs) in the UN lingo – would put the world on track to deliver 2.8C of warming by 2100, the report states, noting that ever-rising emissions mean the likelihood of limiting warming to 1.5C is now lower than it was in 2018.
Energy system transformation
Delivering on global climate goals will involve deep reductions in fossil fuel use, driven by the widespread electrification of industries and an electricity system powered overwhelmingly by low carbon or zero carbon power by 2030, the report notes. Unabated coal, oil, and gas use must be reduced by 100 per cent, 60 per cent, and 70 per cent, respectively, by 2050 to successfully limit warming to 1.5C with no or limited overshoot, according to the findings.
The report emphasises the transformation of the energy system involves action on emissions from all industries, from power and buildings to transport, manufacturing, and agriculture. Reducing fossil fuel use can be delivered by switching to low emission energy sources, investing in energy efficiency and conservation, and switching to alternative energy carriers, it notes.
Power: Electricity emissions can be substantially reduced over the next decade through investment in low-carbon electricity sources, halting new coal-fired power plants, retiring existing coal-fired power plants or retrofitting them with CCS, and limiting the construction of new gas-fired power plants, the report argues.
Cities: Cities are responsible for an increasing slice of global emissions as urban populations swell, and as such the report calls on policymakers to prioritise urban design that encourages walking and reduced energy consumption; push ahead with the electrification of city transport; and take steps that will lead to enhanced carbon sequestration and storage.
Buildings: The report claims the emissions-intensive buildings sector can achieve net zero greenhouse gas emissions if policy packages that promote sufficiency, efficiency, and renewable energy measures are effectively implemented and barriers to decarbonisation are removed. But it warns that low ambition policies increase the risk of locking-in high carbon buildings for decades. Solutions mentioned include more efficient use of materials, insulation, efficient equipment, and low carbon and renewable energy systems.
Transport: Electric vehicles powered by low carbon electricity are identified by the analysis as having the largest decarbonisation potential for land-based transport. The scientists also recommend the introduction of demand-focused interventions that can reduce demand for all transport services and support the shift to more efficient transport modes. Sustainable biofuels also offer a way to reduce emissions of land-based transport in the short and medium term, according to the report. And when it comes to the harder-to-abate shipping, aviation, and heavy-duty land transport segments, sustainable biofuels, low emissions hydrogen, and derivatives are all highlighted as solutions that should be explored.
Industry: The IPCC scientists note that decarbonising industry will entail “coordinated action throughout value chains to promote all mitigation options”, including demand management, energy and materials efficiency, circular material flows, as well as abatement technologies and transformational changes in production processes. Operators will need to switch to new production processes that rely on low and zero carbon electricity, hydrogen, fuels, and carbon management.
Stranded assets
Among the report’s most arresting conclusions is that existing and planned fossil fuel infrastructure could single-handedly exhaust the remaining carbon budget, with the analysis noting the cumulative CO2 emissions of these coal, oil, and gas projects would emit 660Gt of CO2 equivalent. In contrast, the remaining budget for limiting warning to 1.5C with no or limiting overshoot stands at 510Gt of CO2 equivalent.
As such, successfully delivering on climate goals could strand “considerable” fossil fuel infrastructure and will require a “substantial” amount of fossil fuels unburned. Coal assets are at risk of being stranded before 2030, while oil and gas assets are projected to be more at risk of being stranded towards mid-century, with carbon capture and storage (CCS) a pathway for fossil fuel firms to extend the economic viability of their operations as the net zero transition advances.
The IPCC notes that the combined global value of unburned fossil fuels and stranded fossil fuel infrastructure will sit between $1tr to $4tr by 2030 in a 2C scenario, and even higher in a 1.5C scenario.
Greenhouse gas removals
The report acknowledges that reaching net zero depends on the deployment of carbon dioxide removal solutions to compensate for emissions from the sectors that are hardest to decarbonise, such as agriculture, aviation, shipping, and certain industrial processes.
Agriculture, forestry, and other land use can provide large-scale emisisons reductions and also remove and store carbon at scale, it notes, but it cautions that these land-based carbon removal solutions should be designed in a way that do not harm biodiversity, food or water security, or local and Indigenous livelihoods. They should also not be a stand-in for delayed emissions reduction efforts in other sectors.
Carbon capture and storage (CCS) technologies are also an option to reduce emissions from fossil-based energy and industry sources, the report argues. However, it warns rates of CCS deployment are “far below” those set out in 1.5C or 2C pathways amid technological, economic, institutions, ecological-environmental, and socio-cultural barriers.
The report also highlights how carbon capture technology can also be used in conjunction with bioenergy and carbon capture and storage (BECCS) plants and direct air capture (DAC) systems to deliver negative emissions. But again it stresses that these embryonic sectors are well behind schedule if they are to play a major role in delivering a net zero emission economy and face a host of significant economic and policy challenges.
‘Economy-wide’ policy packages
Clearly, there is no shortage of actions that can be taken on a sectoral level to drive down emissions. But in order to create an enabling environment for businesses and investors to enact change, the IPCC argues major policy reforms are urgently needed. Specifically, the report today calls on policymakers to broadly focus on strengthening governance and institutional capacity, aligning technology and innovation systems with low-carbon development, facilitating behaviour change and providing finance that can deliver on “multi objective policy packages”.
The report stressees that economy-wide packages that enable innovation and build capacity are better able to support a shift towards an equitable, low carbon future than piecemeal policies.
Governments and decision-makings should also encourage consumers to limit their consumption and emissions through economic incentives, such as carbon pricing, as well as targeted interventions that understand complex decision making processes, habits, and routines, it states.
While there has been a “consistent expansion of policies and laws addressing mitigation” since the last IPCC assessment cycle, policy coverage of emissions remains uneven across sectors, it notes, singling out alignment of financial flows towards the goals of the Paris Agreement as an area where progress is badly lagging.
At what cost?
The IPCC has warned that most analyses of the cost of tackling climate change have tended to be overinflated, because they typically fail to account for the income gained from slowing high carbon infrastrucutre investment, or the benefits of emissions reduction in terms of avoided climate impacts and adaptation costs. Indeed, it notes that more comprehensive assessments of the damages of climate change find any costs associated with limiting warming to 2C will be eclipsed by the economic benefits of reducing warming. Overall, the scientists stress that immediate mitigation action will deliver long term gains for the global economy.
However, they have warned that investment in climate mitigation needs to be three to six times greater than current levels to cap global warming at 1.5C. There is enough capital and liquidity to plug this investment gap, they note, with public finance flows for fossil fuels still greater than those for climate adaptation and mitigation.
The report stresses that financial support for developing countries must be significantly accelerated, arguing that international finance flows from rich to poorer nations are a “critical enabler” to tackling climate change while addressing inequities in access to finance.
It is possible to deliver economic growth while decarbonisation, it adds, pointing out that 43 countries have managed to increase their GDP while reducing their consumption-based CO2 emisisons.
