I tend to think of myself as a “glass half full” type of person. But, if I’m being honest, much of the reading I do on a daily basis gets pretty depressing. It would be easy to feel down about the impacts of climate change, the lack of urgency to enact change on a global level, and the severe imbalance of those most affected. It is tiring worrying about my everyday decisions – balancing the demands as a working parent and the need for efficiency with the knowledge that many of these efficiencies come at a cost to the planet. The most recent Intergovernmental Panel on Climate Change (IPCC) Assessment Reports don’t offer much room for hope either. But can we be optimistic about climate change?
A bit of context. We promise to be brief.
The IPCC is the United Nations’ body for assessing the science related to climate change. It is made up of representatives from 195 member governments along with a number of non-profit or agency Observer Organizations. Hundreds of experts from around the world volunteer their time to author and review the IPCC Assessment Reports on climate change, its impacts and future risks, and options for addressing it. Specific emphasis is placed on finding authors with the scientific and technical expertise but also balancing socioeconomic views and backgrounds while looking to ensure geographical and gender balance.
The IPCC is working on the Sixth Assessment Reporting cycle, a set of reports consisting of three Working Group contributions and a Synthesis Report, along with three Special Reports on specific topics. There have been five previous reporting cycles; the First Assessment Report was published in 1990 and the Fifth Assessment Report was published in 2013-2014. These have been considered the most comprehensive scientific reports about climate change.
IPCC Sixth Assessment Report Cycle
Glass Half Full?!
While much of the data and conclusions of these reports are pretty dire, we do have some room for optimism. And we need that optimism in order to act.
Acknowledgement: The IPCC Assessment Reports have grown more intense since they were first produced in 1990. They have increased their accuracy as the science, knowledge, and ability to predict climate change has grown. With the latest publications, though, there seems to be more general agreement that climate change is an issue. The IPCC’s first Working Group Assessment Report in the most recent Sixth Assessment Cycle was the first report in the IPCC’s 34-year history that was unanimously approved. Many countries are acknowledging the issues and taking steps to address climate change. General awareness is also expanding. We see this with the growth of ESG investing and the market demanding a focus on these issues. We also see new companies and innovations bringing greener products to consumers.
Action: The Sixth Assessment Reports stress the need for action – now! However, the Reports also acknowledge that we have made significant progress and still have time to act. While the projections for global warming are still well above the 1.5 degree Celsius goal, we have made strides to reduce this warming. Prior to the 2015 Paris Agreement, global temperatures were projected to rise by 4 degrees Celsius by 2100. We are now currently on track for a 3 degree Celsius increase and if countries follow through on their pledges we could potentially limit the warming to 2.4 degrees Celsius. While we still have work to do, we can take solace in the fact that we have improved our trajectory and every decrease matters. Additional immediate action can get us on target.
Accessibility: Clean energy has come a long way. Renewable energy and batteries are more affordable and accessible. In fact, wind and solar energy powered 10% of global electricity in 2021, setting a new record. Many major countries have plans to shift their grid to 100% clean electricity over the next 20 years. Recyclable solar panels and wind turbine blades are now being produced. Electric vehicles are more prominent. Companies have set goals to reduce their carbon footprints and may be required to report under the newly proposed SEC reporting requirements. We acknowledge that there is much work to be done and no solution seems perfect, but we can’t let perfection get in the way of progress.
Earth Day 2022
Since first celebrating Earth Day in 1970, the movement has inspired billions across the globe to take action on climate change. This year’s theme is Invest In Our Planet: What Will You Do? which speaks to the actions we can all take to address the many environmental concerns, many of which were outlined in the IPCC’s Sixth Assessment Report. While we as individuals cannot solve climate change alone, we can raise awareness, encourage others to adjust their habits, and push policy makers to take the issues seriously. This transition to a low-carbon, more resource-efficient economy poses many climate-related risks and opportunities ahead. And, as a bottom-up bond manager with an integrated ESG process, we can make sure that we are considering these risks and identifying opportunities as we build portfolios for our clients.
