Climate change: why the world cannot afford a disorderly transition

A new report states that the lack of coordinated action on climate change poses profound dangers to society. Amongst these is an increase in already stark inequalities.

Climate change: why the world cannot afford a disorderly transition

Climate change is already manifesting itself rapidly in the form of droughts, fires, floods, resource scarcity and species loss, among other impacts. In 2020, many cities around the world experienced extreme temperatures, such as a record high of 42,7°C in Madrid and a 72-year low of -19°C in Dallas, and regions such as the Arctic Circle have averaged summer temperatures 10°C higher than the norm.

Governments, businesses and societies are facing increasing pressure to thwart the worst consequences of climate change. But a disorderly climate transition characterised by divergent trajectories worldwide and across sectors will drive countries further apart and bifurcate societies, creating barriers to co-operation.

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Unfortunately, given the complexities of technological, economic and societal change on this scale, and the insufficient nature of current commitments, it is likely that any transition that achieves the net-zero goal by 2050 will be disorderly.

While COVID-19 lockdowns saw a global dip in greenhouse gas (GHG) emissions, upward trajectories soon resumed: the GHG emission rate rose faster in [2021] than the average over the past decade.

Countries continuing down the path of reliance on carbon-intensive sectors risk losing competitive advantages through the higher cost of carbon, reduced resilience, failure to keep up with technological innovation, and limited leverage in trade agreements.

Yet shifting away from carbon-intense industries, which currently employ millions of workers, will trigger economic volatility, deepen unemployment and increase societal and geopolitical tensions.

In short, a transition that fails to account for societal implications will exacerbate inequalities within and between countries, heightening geopolitical friction.

Adopting hasty environmental policies will also have unintended consequences for nature; there are still many unknown risks to deploying untested biotechnical and geo-engineering technologies, while lack of public support for land-use transitions or new pricing schemes will create political complications that further slow action.

Risk of climate action failure
The 2021 United Nations Climate Change Conference (COP26) succeeded in getting 197 countries to align on the Glasgow Climate Pact and other landmark pledges. However, even these new commitments are expected to miss the 2016 Paris Climate Agreement goal of limiting global warming to 1,5°C and increase the risks associated with a disorderly climate transition.

The economic hangover of the COVID-19 crisis and weakened social cohesion in advanced and developing economies alike may further limit the financial and political capital available for stronger climate action.

At COP26, the EU, UK and US, for example, were reluctant to commit to a formal climate finance target to help developing countries adapt to worsening climate change. And China and India lobbied to change the pact’s wording from “phase out” to “phase down” of “unabated coal power and inefficient fossil fuel subsidies”.

The economic crisis created by the COVID-19 pandemic risks delaying efforts to tackle climate change by encouraging countries to prioritise short-term measures to restore economic growth, regardless of their impact on the climate, over pursuing green transitions.

Brazil, for example, joined the other 140 countries responsible for 91% of Earth’s forests in endorsing the Glasgow Leaders’ Declaration on Forests and Land Use, yet deforestation in the Amazon accelerated to a 15-year high in 2021 following the pandemic-induced recession of 2020.

Geopolitical tensions and nation-first postures will also complicate climate action. COP26 revealed heightened tensions on climate damage compensation, with affected countries facing pushback from large emitters, including the US.

Climate change continues to be perceived by most leading experts in the field as the gravest long-term threat to humanity, and failure to take action on the problem is rated as the risk with the potential to inflict the most damage on a global scale over the next decade.

Notwithstanding this, the results of the World Economic Forum’s Executive Opinion Survey hint at divergent senses of urgency between regions and countries. Climate action failure ranks second as a short-term risk in the US, but 23rd in China, the world’s two largest carbon dioxide emitters. Climate action failure also ranks among the top 10 short-term risks in 11 other G20 economies.

Outcomes of COP26 and COP15
COP26 concluded with important steps towards reaching the 1,5°C goal: it requested governments from 153 countries to update and strengthen their nationally determined contributions, bolster climate adaptation finance efforts, and continue the mobilisation of billions of US dollars for climate funding and the reallocation of trillions of dollars by private institutions and central banks towards global net zero.

COP26 was the first such event attended by the financial sector, which was represented
by the Global Financial Alliance for Net Zero. Its members manage over US$130 trillion
(about R2 quadrillion) in assets and already actively fund sustainable investments. For the first time, the pact made explicit mention of the importance of transitioning away from coal, but did not commit to “phase out” inefficient fossil fuel subsidies.

However, as the UN Environment Programme’s Emissions Gap Report 2021 shows, reaching the 1,5°C target remains unlikely.

Another key outcome was an agreement on the fundamental norms related to Article 6 of the Paris Agreement (on carbon markets), making it now fully operational. Businesses and governments also agreed on more aggressive investment in clean technologies, including a faster transition to electric vehicles and landmark pledges on methane emissions and deforestation.

Key pledges achieved at COP26
India pledged to reach net zero emissions by 2070 and announced a target of 50% renewable energy by 2030.

All the largest emitters have now agreed to start phasing out fossil fuels. Forty-six countries pledged to transition from coal to clean power by 2040, and 104 countries pledged to a 30% cut in methane emissions by 2030. Methane accounts for 30% of historical global warming. One hundred and forty-one countries that account for 91% of the world’s forests pledged to end deforestation by 2030.

The 2021 Conference of the Parties for the Convention on Biological Diversity (COP15, held in Kunming, China) resulted in “strong declarations for safeguarding life on Earth”, along with joint measures for conservation actions and addressing unsustainable production and consumption; it also paved the way to negotiate a post-2020 global biodiversity framework for part two of COP15 in May 2022.

The views expressed in our weekly opinion piece do not necessarily reflect those of Farmer’s Weekly.

This is an edited excerpt from the World Economic Forum’s Global Risks Report for 2022, published in January 2022.