Investing in environmental adaptation vs solutions to climate change
Published in Environment.
The evidence suggests the Paris goals of limiting the global temperature increase to 1.5C above pre-industrial levels is impossible.
A paper earlier this year shows that the remaining carbon budget requires us to transition the world to net-zero emissions within 12 years just to have a 50% chance of keeping temperatures below 1.5C:
if we start reducing emissions steeply now and by the time we reach net-zero levels we have not emitted more than 580GtCO2, our best scientific understanding tells us have we expect a one-in-two chance that warming would be kept to 1.5C.
Moreover, if we want to be sure that this is also true until the end of the century, we’d have to aim to emit only 480GtCO2 until we reach net-zero instead. This is under 12 years of current emissions.A new approach for understanding the remaining carbon budget
I think this is impossible. Whilst there are major improvements happening in many sectors, such as renewably generated energy being cheaper than fossil fuels, this is insufficient to allow every country in the world to reach net zero in time.
That does not mean we should stop investing in projects that will reduce emissions but we’re now in a scenario where adaptation needs investment too. This is the idea of pragmatic optimism:
Being mindful of potential disasters gives us a context in which to plan for them and potentially increase our actions to minimise their impacts. To do so we need to be optimistic. This needn’t be blind optimism. We should temper our hopes that we will achieve our climate goals with active planning towards the possibility that we will fall short. As Professor Bob Watson, former Chair of the Intergovernmental Panel on Climate Change, said over a decade ago, we should aim for a 2°C temperature rise but adapt for 4°C.Pragmatic optimism, rather than complacency or despondency, is the best way to tackle the climate emergency
The question is not “can we stop temperatures increasing to 1.5C?” but “what level can we expect to cap temperatures once they rise above 1.5C?”
This is why we’re seeing organisations like the UK Met Office issue updated projections with improved forecasting accuracy.
Temperature increase is the way environmental change is discussed but it is just one aspect of the changes in weather that result. The frequency of hot spells and the volume of rain also increases.
These are not just “might happen” scenarios – they are what is now most likely:
while we continue to spearhead international efforts to keep the global temperature rise to well below 2 °C and pursue efforts to limit it to 1.5 °C (by reducing our own emissions, supporting the developing world to do the same and contributing to global diplomatic and scientific efforts), our adaptation plans should include preparation for worse climate change scenarios.UK Climate Projections: Headline Findings
Investors like Bill Gates share the same view, having Co-Chaired a report released last week by the Global Centre for Adaptation:
Climate change is upon us, and its impacts are getting more severe with each passing year.
Global actions to slow climate change are promising but insufficient. We must invest in a massive effort to adapt to conditions that are now inevitable: higher temperatures, rising seas, fiercer storms, more unpredictable rainfall, and more acidic oceans.
Adaptation is not an alternative to a redoubled effort to stop climate change, but an essential complement to it. Failing to lead and act on adaptation will result in a huge economic and human toll, causing widespread increases in poverty and severely undermining long-term global economic prospects.A Global Call for Leadership on Climate Resiliance
There was a good podcast discussion about the report with the Chair of the UK Environment Agency, Emma Howard Boyd:
This means that it is now insufficient to just focus on investments which can cut emissions. Investment in adaptation projects must run in parallel.
Investment criteria for climate solutions and change adaptation
For both types of investment, criteria need to be applied to filter out projects which have insufficient impact.
For climate change “solutions”, investors such as Breakthrough Energy Ventures already have such requirements:
We will only invest in technologies with the potential to reduce at least half a gigaton of greenhouse gases every year, about 1 percent of projected 2050 global emissions.Breakthrough Energy Ventures: Investment Criteria
And the adaptation report mentioned above focuses on five specific areas:
Specifically, our research finds that investing $1.8 trillion globally in five areas from 2020 to 2030 could generate $7.1 trillion in total net benefits. In other words, failing to seize the economic benefits of climate adaptation with high-return investments would undermine trillions of dollars in potential growth and prosperity. The five areas we considered for this estimate are early warning systems, climate-resilient infrastructure, improved dryland agriculture crop production, global mangrove protection, and investments in making water resources more resilient.
Anyone making investments into cleantech should have the same stringent requirements, otherwise it’s just greenwashing.
Climate activists are wasting their time lobbying investors to ditch fossil fuel stocks, according to Bill Gates, the billionaire Microsoft co-founder who is one of the world’s most prominent philanthropists. Those who want to change the world would do better to put their money and energy behind the disruptive technologies that slow carbon emissions and help people adapt to a warming world, Mr Gates told the Financial Times.Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates