Paris Le 12 Septembre 2016 Climate Risk, Climate Transition and the Role of Finance and Corporations Key facts and milestones Jean Jouzel Laboratoire des Sciences du Climat et de l Environnement (CEA-CNRS-UVSQ) / IPSL What do we know on the reality of climate change? What are the risks and the opportunities related to the climate transition? Why should it matter for businesses? What can be the specific role of finance in tackling climate change?
2015 : the warmest year since 1850 Since the beginning of the industrial era, human activities have led to an increase of greenhouse gases (GHG) which leads to an accumulation of heat in the climate system ( ~ 1% increase since 1750). Only 1% of this «additional» heat is used by the atmosphere, 93% in the ocean, 3% for the cryosphere, 3% continents.
Upper Ocean heat Content N.H. Spring snow cover Global average sea level Arctic sea ice minimum extent Global warming is uniquevocal and unprecedented
- 0,5 C 0 0,5 C 1 C Contributions to the warming observed since 1950 A large part of this warming results from human activities (95% chance)
Emitting scenario (8.5) Low emission Scenario (2.6) 5 categories of risk RCP 2,6 RCP 8,5 a) Évolution de la température moyenne en surface (entre 1986-2005 et 2081-2100) 32 39 2 1,5 1 0,5 0 0,5 1 1,5 2 3 4 5 7 9 11 ( C)
If nothing is done Very important effects for all categories Ocean acidification, coral reefs Climate extremes Droughts, floods, heat waves, cyclones Populations Climate refugees, water resources, food security, security Biodiversity, agriculture, ecosystems, pollution, health, Irreversible processes Sea-level, permafrost
- Likely - Likely Virtually certain Virtually certain --- Very likely - Likely --- Very likely - - Likely---- - Likely --- Very likely -
Sea level rise will continue beyond 2100 Coastal systems and low-lying areas will increasingly experience adverse impacts such as submergence, coastal flooding, and coastal erosion
Emitting scenario (8.5) Low emission Scenario (2.6) 5 categories of risk Température at stabilization (long term) is roughly proportional to cumulative CO 2 émissions GtC = milliard de tonnes Objective 2 C : we have already used 68% of our carbon budget
2 C : Less than 20% of CO 2 reserves should be used (assuming that concentration of other GHGs no longer increase) Less than 25 years at the current rate of emissions ~ (10 GtC) Would be possible if and only if : - rapid stabilization of GHG emissions (2020 at the latest) - division by up to a factor of 3 between 2020 and 2050 - Carbon neutrality should be ensured before the end of the century. Technically feasible and economically viable. Need for research and innovation (energy production, energy use, transport, buildings, industry, agriculture, forestry,.. ) Loss of 1 year of GDP every 30 years without accounting of benefits
What do we know on the reality of climate change? Uniquevocal, quite certainly due to human activities, will continue What are the risks and the opportunities related to the climate transition? Large and various impacts, increased risks, many opportunities Why should it matter for businesses? example of investments : energy What can be the specific role of finance in tackling climate change? A central role as illustrated by the Paris agreement
Low carbon scenario : changes in investment Fluxes 2010-2029 : US Billion dollars/year Efficiency 500 Renewables Electricity Nucl CCS noccs Extraction Article 2 : Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.
Climate Convention (UNFCCC) launched in1992, Rio Earth Summit Ultimate objective of the Climate Convention (article 2) : To achieve stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved within a time frame sufficient : to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened to enable economic development to proceed in a sustainable manner.
Climate Convention (UNFCCC) : Paris agreement :Article 2 (a) Holding the increase in the global average temperature to well below 2 C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change; (b) Increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production; (c) Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. JJ : Do it now and take the leadership
Paris (COP21) : some key points Unlike Kyoto and Copenhagen where objectives were defined by the Convention, countr were invited to propose their own contribution (INDC) As a result, nearly all countries agreed at Paris (signed at New-York last april) Three main aspects : - limit warming well below 2 C (Pre-industrial) and pursue efforts towards 1.5 C - importance of adaptation - Making finance flows consistent with these objectives Contribution of developed countries : 100 billions of USD/year starting 2020 (floor) Contributions are significant but insufficient : towards 55 GtCO 2eq in 2030 while it would be necessary to be around 40 GtCO 2eq. Trajectories towards 3-3.5 C warming. Need to increase the ambition (such a possibilty exists in the agreement) Civil society was deeply mobilized (very important) Too weak commitments from now to 2020 No discussion on a carbon price and/or carbon markets No involvment of bunkers (air transport and maritime transport) The agreement is not legally binding