Climate change is wreaking havoc across every corner of our planet today. Intense heatwaves and prolonged droughts are decimating our crops while devastating floods are uprooting communities. At the same time, raging fires are devouring the lush landscapes that cleanse our atmosphere.
United Nations Secretary-General António Guterres has issued a dire warning, stating that “our planet is ablaze.” He added that the climate crisis is unearthing unprecedented challenges, often referred to as “the gates of hell.” Furthermore, climate change stands as one of the gravest threats to human health in our time.
A report from the U.N. Intergovernmental Panel on Climate Change has revealed that global temperatures have risen approximately 1.1 degrees Celsius compared to the pre-industrial era. To mitigate these effects, global greenhouse gas emissions must be slashed by half by 2030, based on 2010 levels. The goal is the complete elimination of greenhouse gas emissions by 2050 to avert the catastrophic consequences of climate change.
Impacts of climate change
The World Bank estimates that over 140 million people from Africa, South Asia, and Latin America will be displaced due to the impacts of climate change by 2050. This includes challenges like water scarcity, decreased agricultural output, and rising sea levels.
The upcoming COP28 conference in the UAE will represent the world’s inaugural comprehensive evaluation of global progress in attaining the 2015 Paris Agreement objectives to restrain global warming.
Our world is currently grappling with an immense dilemma. Achieving net-zero emissions by 2050 necessitates a delicate equilibrium between affordability, security, and sustainability.
Understanding “net zero”
“Net zero,” “carbon neutrality” or “climate neutrality” refers to the reduction of carbon emissions to a level where they are offset by emissions reductions. The strategy aims to strike a balance between greenhouse gas emissions from human activity and emissions absorbed from the atmosphere. Achieving net zero involves a combination of reducing emissions and removing them.
Currently, nearly 80 percent of the global economy has committed to achieving net zero emissions by the year 2050. In 2015, 196 countries adopted the Paris Agreement aimed at mitigating global warming and bolstering resilience against climate change. The agreement’s main objective is to limit the increase in global temperature to no more than 1.5 degrees Celsius.
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The urgent need for net zero emissions
The U.N. asserts that the rise in global temperatures must be restricted to 1.5 degrees Celsius above pre-industrial levels to avert catastrophic consequences.
The Earth today is 1.1 degrees Celsius warmer than in the late 19th century due to the growth in emissions. Therefore, in line with the Paris Agreement, limiting global warming to 1.5 degrees Celsius necessitates a 45 percent reduction in emissions by 2030 and achieving net-zero emissions by 2050.
Global efforts and challenges
A global endeavor to attain the goal of net zero emissions is evident. Over 70 countries, including major polluters, are setting net zero targets that collectively cover around 76 percent of global emissions. China, the U.S., India, the EU, Indonesia, Russia and Brazil account for half of the greenhouse gas emissions in 2020.
Furthermore, more than 3,000 companies and financial institutions are collaborating with the Science-Based Targets initiative to align their emissions reduction strategies with climate science. Over 1,000 cities and educational institutions as well as 400 financial institutions have also joined the Race to Zero initiative, committing to cut global emissions in half by 2030.
Challenges in government commitments
Nonetheless, the commitments made by governments to assist countries affected by climate change are still falling short of expectations. The U.N. says reaching net zero requires governments to bolster their contributions and take immediate steps to reduce emissions.
Additionally, U.S. Treasury Secretary Janet Yellen estimates that more than $3 billion is needed annually from countries, including the United States, to reduce emissions from now until 2050.
The energy sector’s role
The energy sector’s pivotal role in emissions reduction has spurred sector leaders to allocate substantial funds and invest in renewable energy.
Consequently, numerous projects within the region align with the transition to renewable energy and climate objectives.
The International Energy Agency asserts that attaining net greenhouse gas emissions neutrality in the global energy sector, while also constraining global warming to 1.5 degrees Celsius, is attainable, thanks to the remarkable proliferation of clean energy technologies.
Reaching net zero requires investments
To achieve the ambitious target of net-zero emissions by 2050, substantial investments are required to mitigate the impact of climate change in emerging markets and developing economies.
As per the IEA, these nations will necessitate approximately $2 trillion annually by 2030 to attain this objective. A significant portion of these funds would be directed toward the energy sector. This represents a fivefold increase compared to the current investment level, which stands at $400 billion. This information is sourced from the IMF, which emphasizes the pivotal role of the private sector in fulfilling the financial requirements for climate investments in emerging markets and developing economies.
The analytical chapters in the latest edition of the Global Financial Stability Report by the IMF indicate that the private sector should contribute around 80 percent of the essential investments, while China’s share should be as high as 90 percent.
Closing the financing gap
Furthermore, if multilateral development banks were to allocate their entire funding to the green transition, it would account for approximately 4 percent of the needed financing. However, a mere shift of 1 percent to 1.5 percent from the world’s private sector assets, valued at over $450 trillion, would effectively bridge the financing gap for climate action.
Representatives from 197 countries will convene for two weeks in the UAE to discuss the specifics of the agreements guiding climate change action. COP28 will assume a critical role in advancing climate action financing. This is particularly true for affluent nations that have yet to fulfill their commitment of providing $100 billion annually to assist less fortunate countries in addressing climate change impacts.
Hence, it is imperative to narrow the chasm between the promises made and the actions required to attain the objective of “net zero emissions.”
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