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Climate change – a damage limitation exercise

With France recently experiencing temperatures in excess of 45 degrees Centigrade and the effects of a prolonged drought in India visible from space, the crusade to limit the impact of climate change is taking on an added urgency.

The message for delegates attending this week’s climate risk summit in London, hosted by The Economist magazine, wasn’t remorselessly pessimistic but it was still sobering. If present trends continue unabated, wildfires, floods and heatwaves that are already a regular occurrence around the world will have moved beyond safe limits by the year 2050, causing millions of premature deaths.

Water and its availability will increasingly become an issue for much of the world’s population, which reached 7.7 billion in April 2019 and could have reached 10 billion by mid-century.

Jonathan Baillie, executive vice president and chief scientist for National Geographic magazine, says that avoiding disaster will require securing what is left of the world’s forests and oceans, which currently absorb around 60% of harmful CO2 emissions.

Next year, Kunming, the capital of Yunnan province in south-west China will be the venue for a conference to decide the post-2020 biodiversity framework for the planet. It will be based on ensuring that 30% of the world is protected by the year 2030 with a further 20% either maintained or restored to a natural state and designated as climate stabilisation areas.

Baillie said that central to this plan is “maintaining the sponge that absorbs CO2” as the only alternative to inaction is catastrophe.

Ambitious targets

The conference coincided with this week’s unveiling of the government’s Green Finance strategy. Harriett Baldwin, minister of state for Africa at the Foreign and Commonwealth Office and minister of state at the Department for International Development said that the aim is to unlock a private pool of assets valued at up to US$190 trillion.

Both the UK and Norway are countries that have set an ambitious target to reduce their carbon emissions to zero by the mid-21st century and Torbjøn Røe Isakson, the Norwegian minister of trade and finance, was also on the conference podium.

He said that climate change risk has influenced investment in certain sectors but hadn’t yet made too much of an impact on the ‘big money’, although the country’s sizeable Sovereign Wealth Fund is no longer investing in gas and oil exploration companies and is seeking to diversify its investment portfolio.

The two countries have also introduced carbon pricing policies, although Norway’s has so far proved more effective in gearing up technologies than causing a shift in investment policies. “Things are moving too slowly,” the minister admitted. “We have maybe 20 years, certainly 30 at the maximum to push through radical change and not 100.”

Sarah Breeden, executive director for international banks supervision at the Bank of England (BoE) spoke of how the Bank had raised awareness in 2015 of the risks posed to the insurance sector by climate change and followed up last year with a similar exercise for the banking sector.

The climate focused Network for Greening the Financial System (NGFS) was formed two years ago by the BoE and seven other central banks and released its first major report into climate-related financial risks in April this year. Membership has steadily grown to 40 banks, although significantly the US Federal Reserve has yet to join.

The BoE is now seeking to become more prescriptive and instil best practice in outlining various climate change scenarios for which the UK financial system should prepare for. An initiative for stress testing a range of scenarios is planned for a 2020-21 launch.

“If a system isn’t resilient, what steps are planned to build up its strength?” said Breeden. “We want people to look not just one or two years ahead, but over the coming decades.”

Wake-up call

With the Trump administration pulling the US out of the Paris agreement on coordinated climate change action, Alice Hill a policymaker at Stanford University’s Hoover Institution, former judge and adviser to former president Obama spoke on “the aha moment” that had spurred his team into action. This came with superstorm Sandy in late October 2012, which hit 24 states.

Manhattan, whose defences were built to resist up to 12 feet of storm surge, was submerged by one of 14 feet. Barriers were breached, a power sub-station blew up and supplies to eight million citizens were interrupted. Wastewater treatment plants and transport systems failed, while hospitals were forced to cancel operations and evacuate 6,500 patients.

“One building escaped unscathed – Goldman Sachs’ officers were a totem of resilience even though its employees couldn’t get to work,” said Hill. “But we’ve got so behind in our preparations since then and the financial system is simply unprepared for another event like Sandy.

“What’s worse is the lack of any resilient building code for Southeast Asia, where new cities the size of Manhattan are under construction.”

More positive news is that since the landmark Paris agreement was signed in late 2015, an operational rulebook to drive genuine climate change action has been drawn up and was launched at a summit in Katowice, Poland last December.

“The Paris process lives on, although it’s not the same with the US missing, said Todd Stern, former US envoy for climate change. “Other countries remain committed and will now begin to ramp up their targets.

“The danger is that the with the US now unlikely to meet the 2015 target, others may also relax their efforts. Against this, New York state has just passed its own ambitious targets, California also has a very strong emissions reduction programme and many other states and following these leads.”

Stern referred to the “zeitgeist moment” nearly 50 years ago, when the first Earth Day was marked in April 197o by 20 million Americans taking to the streets to demand a healthier and more sustainable environment and the Environmental Protection Agency (EPA) was formed later that year.

“We need similar mass mobilisation today and there’s clearly a movement towards it in the US. Climate change is the top issue in the current round of election primaries.”

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