News

The August 2021 IPCC Report Dials Up the Pressure for Rapid Climate Action

The most recent IPCC report provides a trove of sound bites and talking points that will help global leaders advance the agenda of rapid and decisive decarbonization. In the words of UN Secretary General António Guterres, “This report must sound a death knell for coal and fossil fuels, before they destroy our planet."

Taken as a whole, the report and policymakers' reactions highlight the need for leaders in the finance community to understand and prepare for the possibility of an urgent and rapid decarbonization of the global economy.

Here are some key takeaways:

  • The evidence for human induced warming of the climate system is unequivocal.

  • Atmospheric CO2 concentrations are higher than any time in the last two million years.

  • Temperatures during the last decade were warmer than any time in the last 125,000 years.

  • Anthropogenic climate change is already impacting weather across the globe, resulting in more frequent and intense heat waves, floods, droughts, and tropical cyclones.

  • Many of the changes in the climate system due to past and future greenhouse gas emissions will be irreversible over centuries to millennia.

  • Without dramatic near-term reductions in GHG emissions, average warming will likely exceed 1.5°C during the next decade and 2°C by 2050, possibly much sooner.

The UN Secretary General goes on to say "There must be no new coal plants built after 2021. OECD countries must phase out existing coal by 2030, with all others following suit by 2040. Countries should also end all new fossil fuel exploration and production, and shift fossil fuel subsidies into renewable energy.”

As summarized in the report, the best available science tells us that there is still time to act and avoid the worst impacts of global warming. While there are certainly political headwinds to taking such decisive action, momentum is steadily building. The possibility of a rapid transition away from fossil fuels consistent with the needed reductions in emissions can no longer be discounted. Now is the time for financial institutions to prepare themselves to lean into the transition and lead the way.