The Story So Far
Since approximately 1800, with the onset of the industrial revolution and the increase of fossil fuel use, human activity has caused approximately 2 trillion tonnes of carbon dioxide (CO2) to be emitted into our atmosphere. Annual emissions have increased on an exponential scale and now sit at approximately 110 million tonnes per day. These emissions have caused the concentration of CO2 in the atmosphere to increase from 280 parts per million (ppm) in the year 1800 to 410ppm today, far above anything experienced over the past 800,000 years.
The physical properties of the earth mean that atmospheric CO2 traps heat (infra-red radiation) that would otherwise reflect into space, causing our planet to warm. This effect, known as global warming, is confirmed by over 97% of science experts with 16 of the past 17 years the hottest since temperature records began. Detailed analysis of ice cores has provided scientists with accurate information on CO2 concentrations and temperatures over the past 800,000 years, demonstrating that CO2 concentrations are highly correlated with dramatic temperature changes on earth. Historically, as CO2 concentration has varied from 200ppm to 300ppm, this has correlated with large temperature changes, driving huge planetary impacts including large glacial advances and retreats, sea level changes of more than 100 metres, and extensive species extinction.
The historical swing in temperature from peaks to troughs has been approximately 8 degrees Celsius, the impact of which has been the difference between a warm summers day in New York City and more than a 1-kilometre thick ice sheet covering the city (interglacial/glacial periods). Most of the additional heat being trapped by the extra CO2 is absorbed by the oceans, increasing ocean temperatures which, when combined with a hotter atmosphere, impact the hydrological cycle (evaporation/precipitation), producing a number of well-understood effects such as increasing the volume and intensity of rainfall, increasing the power and duration of hurricanes, accelerating the melting of polar ice sheets, and increasing the frequency of droughts and wildfires.
Additionally, scientists are aware of a number of positive feedback loops that have occurred historically during periods of large temperature change, meaning that as CO2 concentrations and temperatures change, it creates conditions that accelerate further CO2 release and further temperature changes even if emissions are reduced. This is caused by the fact that cumulative carbon emissions will remain in the atmosphere for many years, causing a lock-in effect. The point at which these positive feedback loops cross crucial tipping points is, however, uncertain. Nevertheless, on a long-term time horizon, it is reasonable to assume that we may now be very near or beyond some of these important tipping points.
Counting the Cost
A leading climate economist, Marshall Burke, and colleagues have recently estimated that the cost of hitting 2 degrees warming vs. keeping to 1.5 degrees is a cumulative impact of $20 trillion on the global economy while the cost of avoiding this is only $300 billion, providing a return on investment of approximately 70-to-1. (Source: Large potential reduction in economic damages under UN mitigation targets” by Marshall Burke et al, May 2018). With such a large potential return on capital, it makes good economic sense to decarbonise our economies as quickly as possible, since the return appears to be attractive while the potential downside risk is extremely large.
The Policy Response
Global governments have been aware of climate change since the first World Climate Conference in 1979 but total annual CO2 emissions since then increased from 20 billion tonnes to around 35 billion tonnes in 2020 (Global Carbon Project, 2021). As evidence has mounted of temperature rises, along with more severe weather events, there has been an increase in public awareness and a stronger policy response, which culminated with the historic Paris Agreement in 2015. The Paris Agreement was signed by more than 190 countries and was ratified in 2016 with each country submitting a non-binding Nationally Determined Contribution (NDC) indicating the level of emission reductions they intend to target. Significantly, all countries agreed that it is necessary to reduce the emissions enough to limit the warming of the earth's average temperature to well below 2 degrees C compared to pre-industrial levels.
While the Paris Agreement is celebrated as a significant international effort to address the issue of climate change, the combined NDC’s of all countries only amount to approximately one-third of the reductions necessary in order to hit the 2-degree target. Based on the NDC’s, there will be a carbon gap, or emissions gap, in 2030 of 11 to 14 billion tonnes annually. One key element of the Paris Agreement calls for countries to meet every 5 years to measure progress and to raise their ambition for CO2 reductions by increasing their NDC’s - a process known as the rachet.
As of 2018, the average temperature has already increased by approximately 1 degree C, leaving humanity little time to begin sharp reductions in emissions. Since the amount and impact of emissions is well-known, it is possible to calculate a budget or total amount of CO2 that we can emit before breaching various temperature targets. The recent IPCC (2018) report on 1.5-degree warming has calculated that we can only emit another 420 billion tonnes before we hit 1.5 degrees. Since annual emissions are approximately 40 billion tonnes, we have only 10 years remaining before we breach the 1.5 degrees limit and begin to incur all of the consequences and costs involved. Over the past 10 years, the cost of producing electricity from wind and solar has dropped dramatically, making these renewable sources of energy competitive with fossil fuel, meaning that we now have many of the tools we need to make an economically viable transition to a low-carbon economy. The only thing we lack is an increase in the size of commitment from government, corporate, and personal stakeholders to put the global economy on track to achieve the Paris Agreement objectives.