According to Antonio Guterres, Secretary General of the United Nations, climate change is “the single biggest threat to life, security and prosperity on Earth.” Secretary Guterres is not alone in drawing this conclusion. Over 12,000 leaders from various business, political and non-profit arenas polled for the World Economic Forum’s 2020 Global Risks Report identified environmental threats as the top risks facing the world for the coming year (see Figure 1).
Whereas economic risks featured heavily in 2010 in the immediate aftermath of the global financial crisis, environmental concerns dominate today, reflecting no doubt the series of extreme weather events in recent years and growing concerns about climate change.
The urgency around natural catastrophe and climate change risk is palpable. The diverse and dispersed nature of events in recent years shows that communities, corporations and policymakers must prepare for higher levels of catastrophe losses. At the same time, risks posed by climate change are intersecting with, and in some cases being amplified by, other equally challenging issues that societies must confront. Human migration, aging populations and issues related to global debt will dominate agendas for decades to come. The risk landscape in the public sector is changing rapidly and like never before. From a climate perspective, this is being driven by the following.
• Today, the earth is considered to be approximately 1°C warmer than pre-industrial levels.
• Carbon dioxide forces the Earth’s energy budget out of balance by absorbing thermal infrared energy (heat) radiated by the surface, creating a blanket that retains additional heat in the atmosphere.
• Since 1850, human activity has filled the atmosphere with approximately 1.1 trillion tons of carbon dioxide
• The Intergovernmental Panel on Climate Change (IPCC) – the United Nations body for assessing the science related to climate change – has found that cumulative emissions of carbon dioxide since 1850 now exceed 55 percent of the total that scientists predict will lead to significant climate stress.
• In 1950, carbon dioxide concentrations exceeded 300 parts per million (ppm) for the first time in over three million years.
• If warming is to be contained below 2°C, atmospheric concentrations cannot exceed 450 ppm – current atmospheric carbon dioxide concentrations are 410 ppm.
• Today’s global population of 7.7 billion inhabitants is six times higher than in 1850 and there are now 3.2 billion more people living on the planet than in 1980.
• The world’s growing global population now emits approximately 36 billion tons of greenhouse emission every year – for context, imagine the state of Connecticut (5,500 square miles) covered in a 3,200-foot-thick blanket of gas.
• Research on coastal exposures worldwide underlines the threat posed by sea level rise, with an estimated 150 million people living on land that will be below the hightide line by 2050.
The potential economic consequences of the changing climate are striking. Some estimates predict that gross domestic product (GDP) will fall by 25 percent should temperatures rise by 3°C by 2100. If no action is taken, some scientists predict that temperatures will rise by 4°C. Economists suggest this would translate into a 30 percent decline in global GDP. Not only would that be worse than the Great Depression, where global trade fell 25 percent, but it would also be permanent (1).
This has spurred governments into action to address the issues associated with climate change. However, after initial optimism about the desire for cooperation at a global level, a sense of realism has subsequently taken hold. Targets agreed upon in the Paris Agreement, which attempts to bring nations together to combat climate change and adapt to its effects, are already facing challenges.
A recent assessment of the milestones in the Paris Agreement shows that the world is unlikely to meet the targets established by its signatories. The most recent (fifth) IPCC report suggests that the world is not on course to prevent global temperatures rising 2°C above pre-industrial levels. The consequences of this are stark.
In Figure 2, the World Resource Institute outlines four emission pathways from 2010 to 2050.