Deadlines loom for creating new economy to avoid climate catastrophe
Climate Solutions 2 (CS2) is the first analysis to put timetables to the industrial transformations needed to limit global carbon emissions to below the 2˚C level scientists identify as presenting unacceptable risks of runaway climate change. It was prepared for WWF by Climate Risk, a company known for its work on climate change for global insurers and infrastructure providers.
The report found that beyond 2014 the feasible upper limits of industrial growth rates will make it impossible for market economies to meet the carbon targets required to keep global warming below 2°C. The report also found that market measures alone will not be enough to deliver emissions reductions on the scale required and that delays will increase the levels of direct intervention needed in the economy.
"Climate Solutions 2 tells us that we need to start making the change to a low-carbon economy today,” said Kim Carstensen, who leads WWF’s Global Climate Initiative. “The transformation will require sustained growth in clean and efficient industry in excess of 20 per cent a year over a period of decades.
“The report's modelling shows how we can sustain these growth rates but also makes it clear this will be the fastest industrial revolution witnessed in our history.
"The findings of this report offer a pragmatic, sobering and urgent warning to world leaders that the window of opportunity to act on climate change is rapidly closing. The time for playing politics with our future is long past."
The way forward, according to the report, is simultaneous action on all greenhouse gas emissions from all sectors, with market measures backed with a full range of other policies including energy efficiency standards, feed-in tariffs for renewable energy and an end to “perverse “ subsidies for fossil fuel use.
According to the report, countries not pursuing all carbon abatement options in all sectors will tend to develop least-cost industries first and only develop other low carbon industries as they become affordable.
Computer modelling and historical records agree that sequential development of industries, which would result from undue reliance on a single mechanism such as a rising carbon price, will make it impossible to meet emissions targets on time. Industries that come online later will have to grow considerably faster because of the delays in start-up and will be hit harder by constraints on available resources, labour and expertise.
"This analysis shows that we can win the fight against runaway climate change by transforming all sectors of our economies concurrently, by creating stable long-term investment environments that don't seek immediate returns and through focusing on key industry sectors,” said Dr Stephan Singer, who leads WWF’s Global Energy Initiative.
The industries that will lead the transformation are renewable energy generation, carbon capture and storage, energy efficiency, sustainable low-carbon agriculture and sustainable forestry. With the clean industrial revolution under way and sustained by a strong policy framework all renewable energies become competitive with fossil fuels between 2013 and 2025 – a highly conservative estimate based on just 2% annual rises in fossil fuel prices and no price on carbon.
"The wind, the sea and the sun will cost the same today, tomorrow and into the future, unlike coal,” said Singer. “They can be the basis for a cleaner world where energy supplies are more secure and where we have the best chance of preventing dramatic climate changes that could endanger our cities, our food supplies and the natural environment that we have always depended on."
Climate Solutions 2 calculates that the extra investment worldwide is expected to be US$17 trillion up to 2050 – or less than 15% of the funds currently managed by institutional investors. The returns on that investment are expected to flow back into investor’s pockets from 2027 and in some cases even earlier.
For renewable technologies, the cumulative investment to 2050 worldwide will total US$7 trillion, but it is expected generate returns to investors of around six times as much.
"Climate Solutions 2 draws a line in the sand that we cannot cross,” said Castensen. “It reinforces that we have reached a pivotal moment in our history where the window of opportunity which remains to prevent runaway climate change will soon disappear entirely.
“Most immediately and importantly, the basis for this transformation has to be laid in Copenhagen in December with a fair, binding and effective new global deal on climate change.”