IPCC held a press conference on Monday March 20th to release the latest synthesis report, AR6 Synthesis Report: Climate Change 2023, which is the last chapter of the sixth assessment cycle.
The IPCC press conference was held at Interlaken, Switzerland [1]. By chance, Switzerland is also currently the epicentre of financial turmoil following the efforts to avoid a global banking crisis, with UBS acquiring Credit Suisse in a weekend-frenzy of governmental intervention to regain financial stability. The need for a well-functioning financial system has rarely been more important – including a solid grip on climate impacts and opportunities.
The synthesis report weaves together the contents of the IPCC previous reports, from three Working Groups (The Physical Science Basis, Impacts Adaptation and Vulnerability and Mitigation of Climate Change), as well as three Special Reports (The Ocean and Cryosphere in a Changing Climate, Climate Change and Land, and Global Warming of 1.5 °C) [2].
Key observations
- The pace of action to reduce climate change impacts is too slow
- The negative impacts from human-caused change will intensify
- Mainstreaming effective and equitable climate action will reduce losses and damages for both nature and people
- Climate action provides co-benefits, including clean water, air and energy, improved health and livelihoods, as well as reduced poverty and hunger
Financial Implications
- Adaptation: Scale up infrastructure to enhance resilience
- Mitigation: Cut global greenhouse gas emissions in half by 2030
- Equitable solutions: Fairness is one of the most important solutions
- Key enablers: Enhanced technology and international collaboration
- Scaled up financing:
- We need 3-6 times the current climate investment
- There is enough global financing to rapidly reduce emissions
- Developing countries need external funding to meet adaptation needs
- Investors have a key role to play
- Financial flows must be channelled towards renewable energy and energy efficiency, green transport, green urban infrastructure, halting deforestation and improving ecosystem restoration, and to create green food systems, including reduced food waste.
Investor Analysis
- Attractive sectors towards 2030 with positive impact:
- Solar and wind energy
- Energy storage and distribution, including smart grids that even out power peaks
- Energy efficiency appliances, in particular energy management systems, lighting, insulation, heating, ventilation and air conditioning
- Sustainable, recyclable and re-useable products and materials
- Low emission transport, sustainable urban planning and effective water management
- Resource efficient food production and distribution to eliminate food loss
- Affordable technology that enables equal opportunities across regions, like access to digital, financial, and health-related solutions
- Key challenges to be solved:
- Providing baseload, or stable power in an increasingly intermittent electricity grid
- The role of nuclear power and gas, striking the right transition path with the down-phasing of coal and oil
- Energy security, balancing synergies with potential conflicts of interest
- Rebuilding geopolitical trust and regaining international collaboration
- Data analysis tools like artificial intelligence may be helpful to optimize societal functions with low emissions, but it needs to be applied with targeted cautiousness
The main difference between this report (AR6) and the previous report (AR5) is a reinforced focus on solutions. These solutions include an integrated assessment on the co-benefits on mitigation and adaptation, with concrete measures and a greater focus on the human sides of climate change. Regained climate control depends on an equitable solution.
Finance: A Critical Enabler
One of the critical enablers of action is the role of financial investment. The financial system needs to be able to respond to the challenges ahead. The investments in both climate mitigation and adaptation has to accelerate significantly. Governments can send a clear signal on how to spend public financing. More importantly is the larger pool of finance in private markets, including banks, central banks, regulators and market's ability to price in the risks and opportunities of climate change. Finance needs to flow towards the places that need it the most, especially in developing countries.
Future Climate Research
With the conclusion of the sixths assessment cycle, questions on future research arises. The upcoming assessment cycle is planned to include a broader range of diversity in the scientific participation. Diversity across gender diversity, indigenous peoples, developing countries and young citizens will get better opportunities to contribute to the climate research. The next IPCC report will not be released until 2030. Essentially, this means that the AR6 report is the last chance to reach the 1.5 degree target. Action after 2030 will be too late. Hope still remains, since the clear message and overwhelming climate research will help governments and investors to allocate capital as constructively as possible in order to build an environmentally and socially desirable future.
***
Sources
[1] United Nations (20.03.2023), UN Web TV, IPCC Press Conference: Release of the Synthesis Report Summary for Policymakers, https://media.un.org/en/asset/k1d/k1df15sj4e
[2] IPCC (20.03.2023), AR6 Synthesis Report: Climate Change 2023, https://www.ipcc.ch/report/sixth-assessment-report-cycle/