Tag: Carbon

Release of Latest IPPC Report Spurs Calls for Action from Business Leaders

 

On September 25, 2013 the Intergovernmental Panel on Climate Change (IPCC) released Climate Change 2013: the Physical Science Basis, the first part of its Fifth Assessment Report (AR5). Six years in the making, the 2,200 page report was developed by 209 lead authors, citing more than 9,000 scientific publications in their analysis of key physical and scientific aspects of the climate system and climate change.

The report confirms that human influence is the dominant cause of observed warming. Scientists now state with more certainty than ever before, that it is extremely likely (95% probability) that human activities, particularly combustion of fossil fuels and changes in land use, are responsible for the 0.85ºC increase in average global temperatures that has occurred since 1880.

There has been a reduction in the rate of atmospheric temperature increases over the past fifteen years which the IPCC attributes to the absorption by the oceans of a large amount of heat, and sequestering a third of the greenhouse gas emissions. This is by no means good news, since warmer waters expands leading to rising sea levels, sea temperatures also significantly influence climate patterns and an increasing concentration of greenhouse gases in ocean waters contributes to acidification with negative impact on aquatic ecosystems. The report concludes that “human influence has been detected in changes in the global water cycle, in reductions in snow and ice, in global mean sea level rise, and in changes in some climate extremes.”

The report lays out four different potential scenarios for global temperature rise over the course of the century, ranging from 0.3 ºC to 4.8ºC. In the immediate decades, all four scenarios follow a similar trajectory, showing a low sensitivity to curbing emissions in the short-term. But if current trends continue, the effects of cumulative emissions will be difficult to mitigate due to the long half-life of greenhouse gases and their continued impact on the climate long after emissions subside.

The AR5 is the first IPCC report to define a “carbon budget” – an estimate of the maximum amount of human caused emissions that can be released in the atmosphere before we experience warming greater than 2ºC – the indicative threshold beyond which extensive global environmental and socio-economic damage is expected. That carbon budget is 1,000 trillion tonnes of carbon dioxide equivalent (CO2e), of which approximately half has already been emitted. Based on carbon-intensive trajectories, this means that the world has just 30 years until it has used up its carbon budget. If we exceed this budget, the chance of staying within 2ºC of warming looks far less promising.

What does this mean for business? In short, climate change brings with it greater risks and investment challenges:

• More frequent extreme weather events: Higher temperatures and more extreme weather are among the most apparent business risks. At the World Economic Forum in 2013, financial experts named climate change as one of the top three business risks. From raging wildfires to severe flooding, extreme weather events can imperil operations throughout a company’s supply chain. Rising sea levels will also threaten shorelines. According to the IPCC, sea levels have likely risen nearly twice as fast as previously reported. More than 1 billion people worldwide, along with many financial centers, are located in low-lying coastal communities. According to the OECD, average flood losses in major cities around the world could exceed $52 billion per year by 2050, and possibly go as high as $1 trillion without additional protection. At the other end of the spectrum, some regions will be faced with greater water scarcity rather than flooding. In the Carbon Disclosure Project’s 2012 Global Water Report, 53% of respondent companies reported that they have experienced water-related detrimental impacts in the past 5 years (up from 38% in 2011), with costs as high as $200 million for some companies.

• Risks to energy infrastructure: Extreme weather also poses a threat to energy and electricity infrastructure by potentially disrupting production, delivery, and storage of energy. Many power sources depend on water and decreased water availability due to changing precipitation trends may threaten operations.

• Investment risks: Climate-related economic disruption also compounds risks to global investments. A 2011 Mercer study warned that climate change could increase investment-portfolio risk by 10 percent over the next two decades. The IPCC’s carbon budget may have implications for fossil fuel companies, which are traditionally among the higher grossing investments. Since their value is based on proven reserves, there is a risk of devaluation if a significant portion of the reserves are left untapped in order to keep within the carbon budget.

• Insurance risks: Extreme weather events are already having an impact on the insurance industry. As damage from extreme weather events increases, insurers are faced with either hiking rates or refusing to provide coverage in disaster-prone areas. Ultimately, increased costs will be passed onto businesses and consumers.

While climate change presents clear risks to business, smart responses can deliver economic benefits as well. In a 2010 report by the UN Global Compact, more than 86 percent of businesses named responding to climate change as an opportunity. This is reflected in the actions of many multinational corporations, which are already taking steps to reduce risks and lower their greenhouse gas emissions. Whether it is driving emission reductions throughout the supply chain, investing in renewable energy or phasing out the use of carbon intensive materials, companies are choosing to act.

Industry comments in response to the IPCC report highlight the urgent need for action for more, see ‘Experts React’. Nick Robins, head of the Climate Partnership at HSBC, commented that: “The IPCC report provides firmer foundations for policy action. For the world’s capital markets, climate change is an issue of strategic risk management … Our research shows that India, China, Indonesia, South Africa and Brazil are the G-20 nations that are most vulnerable to climate risks. We expect the succession of IPCC reports into 2014 to provide a renewed impetus to policy and business action through to the finalization of negotiations in December 2015.” Head of Swiss Re’s sustainability program in the Americas, Mark Way, also said: “When a body like the IPCC concludes that with 95% certainty mankind is causing climate change we would be foolish not to listen. And yet we are still not listening closely enough. The transition to a low carbon economy and a more climate-resilient society cannot be thought of as options, they are necessities.” Mindy Lubber, president of Ceres (a US-based organisation which presses for greater sustainability and environmental awareness in the business sector) summed it up nicely: “The IPCC report’s conclusion is unequivocal – climate change is happening and it’s disrupting all aspects of the global economy, including supply chains, commodity markets and the entire insurance industry. Business momentum is growing to innovate new strategies and products to manage climate risks and opportunities. But scaling these efforts to levels that will slow warming trends will require stronger carbon-reducing policies globally.”

The IPCC will release three more parts to the AR5 report in 2014: Impacts, Adaptation and Vulnerability; Mitigation of Climate Change; and a Synthesis Report. For more information on the current report, see IPCC Fifth Assessment Report: Climate Change 2013: The Physical Science Basis.

 

What are Greenhouse Gases?

 
Gases that trap heat in the atmosphere are called greenhouse gases or GHGs.  When sunlight reaches the Earth’s surface, it can either be reflected back into space or absorbed by Earth. Once absorbed, the planet releases some of the energy back into the atmosphere as heat (also called infrared radiation). GHGs like water vapor (H2O), carbon dioxide (CO2) and methane (CH4) absorb energy, which slow or prevent the loss of heat in to space.  This process is commonly referred to as the “greenhouse effect”, whereby GHGs act like a blanket, making the Earth warmer than it would otherwise be.

Since the Industrial Revolution began around 1750, human activities have contributed substantially to climate change by adding CO2 and other heat-trapping gases to the atmosphere. These GHG emissions have increased the greenhouse effect, leading to rises in the Earth’s surface temperatures. According to the National Research Council (Advancing the Science of Climate Change, 2010), atmospheric CO2 concentrations have increased by almost 40% since pre-industrial times, from approximately 280 parts per million by volume (ppmv) in the 18th century to 390 ppmv in 2010.  The current CO2 level is higher than it has been in at least 800,000 years.  The primary human activity affecting the amount and rate of climate change is greenhouse gas emissions from the burning of fossil fuels for electricity, heat, and transportation.

The main GHGs directly emitted by humans include CO2, CH4, nitrous oxide (N2O), and several others:

  • Carbon dioxide (CO2):  CO2 is absorbed and emitted naturally as part of the carbon cycle through animal and plant respiration, volcanic eruptions, and ocean-atmosphere exchange. Human activities, such as the burning of fossil fuels and changes in land use, release large amounts of carbon to the atmosphere, causing CO2 concentrations in the atmosphere to rise.
  • Methane (CH4):  Methane is emitted during the production and transport of coal, natural gas, and oil. Methane emissions also result from livestock and other agricultural practices and by the decay of organic waste in municipal solid waste landfills.
  • Nitrous oxide (N2O): Nitrous oxide is emitted during agricultural and industrial activities, as well as during combustion of fossil fuels and solid waste.
  • Fluorinated gases or F-gases: Chlorofluorocarbons (CFCs), hydrochlorofluorocarbons (HCFCs), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6) are synthetic, powerful GHGs that are emitted from a variety of industrial processes. F-gases are often used in coolants, foaming agents, fire extinguishers, solvents, pesticides, and aerosol propellants. F-gases are also sometimes used as substitutes for stratospheric ozone-depleting substances. These gases are typically emitted in smaller quantities, but because of their potency, they are sometimes referred to as “High Global Warming Potential” gases. F-gases have a long atmospheric lifetime and some of these emissions will affect the climate for many decades or centuries.
  • Tropospheric ozone (O3): Tropospheric ozone has a short atmospheric lifetime, but it is a potent GHG. Chemical reactions create ozone from emissions of nitrogen oxides and volatile organic compounds from automobiles, power plants, and other industrial and commercial sources in the presence of sunlight. In addition to trapping heat, ozone is a pollutant that can cause respiratory health problems and damage crops and ecosystems.
  • Water vapor: This is the most abundant GHG and significant in terms of its contribution to the natural greenhouse effect, despite having a short atmospheric lifetime. While some human activities can influence local water vapor levels, the concentration of water vapor on a global scale is controlled by temperature which influences overall rates of evaporation and precipitation. As a result, the global concentration of water vapor is not substantially affected by direct human emissions.

The effect of GHGs on climate change depends on three main factors: (i) the concentration of GHGs in the atmosphere; (ii) the length of time that GHGs stay in the atmosphere; and (iii) the impact of GHGs on global temperatures.

The concentration of GHGs in the atmosphere is measured in parts per million, parts per billion, and sometimes parts per trillion. One part per million is equivalent to one drop of water diluted into about 13 gallons of liquid.

With respect to the length of time that GHGs stay in the atmosphere, each GHG can remain in the atmosphere for different amounts of time, ranging from a few years to thousands of years. All of these gases remain in the atmosphere long enough to become well mixed, meaning that the amount that is measured in the atmosphere is roughly the same all over the world, regardless of the source of the emissions.

In terms of the impact of GHGs on global temperatures, the two most important characteristics are how well the gas absorbs energy (preventing it from immediately escaping to space) and how long the gas stays in the atmosphere. Some GHGs have a stronger impact than others on global temperatures. For each GHG, a Global Warming Potential (GWP) has been calculated to reflect how long it remains in the atmosphere, on average, and how strongly it absorbs energy. The GWP for a gas is a measure of the total energy that a gas absorbs over a particular period of time (usually 100 years), compared to CO2.  Gases with a higher GWP absorb more energy, per pound, than gases with a lower GWP, and thus contribute more to changes in global temperatures. For example, methane’s 100-year GWP is 21, which means that methane will cause 21 times as much warming as an equivalent mass of carbon dioxide over a 100-year time period.

Accurate reporting and monitoring of GHG emissions is fundamental to reducing greenhouse gases and taking meaningful action to combat climate change. After all, you cannot manage what you do not measure.