IPCC AR6 report – what choices can Australia make now to secure a liveable and sustainable future for all?
The UN’s Intergovernmental Panel on Climate Change (IPCC) has released its Synthesis Report for the Sixth Assessment Report (AR6), bringing together the current state of knowledge of climate change, its widespread impacts and risks, and climate change mitigation and adaptation. It acknowledges the interdependence between human and environmental wellbeing, sustainable development, and the diversity of actors involved in climate action.
The report finds that the global surface temperature has risen 1.1°C above 1850-1900 levels, unequivocally caused by human activities through the release of greenhouse gases – the strongest statement the IPCC has expressed to date on global warming. The effects of this are already being realised in every region, with some communities, eco-systems etc. experiencing soft and hard adaptation limits.
Current commitments are not sufficient to avoid reaching 1.5°C in the near term (2021-2040), in particular the gap between policies announced, and Nationally Determined Contributions (NDCs – non-binding national targets for climate change mitigation and adaptation). Each additional increment of warming will intensify multiple and concurrent hazards.
There is enough global liquid finance to achieve a limit of 1.5°C, but a ‘many-fold’ increase in the direction of these funds to climate change mitigation and adaptation is needed. The finance flows to developing and least-developed countries is particularly under-funded – which also impacts the achievement of Sustainable Development Goals. Mitigation and adaptation options will become less feasible as temperatures rise, signally a need for immediate deep and sustained action.
Despite the severity of the climate emergencies being faced, there is still opportunity to shift the dial, and create sustained long term gain for people, profit, and planet. Feasible, effective and low-cost options for mitigation and adaptation are already available, and the economic and social benefit of limiting warming to 2°C exceeds the cost of mitigation in most assessed literature. Successful realisation of these opportunities will be underpinned by four key human factors: Trust, collaboration, recognition (that some can contribute more than others), and the sharing of burdens and benefits.
Understanding this current state, and the quickly closing window of opportunity for change, presents the question: what choices can organisations make now to secure a liveable and sustainable future for all? There are two key levers, mitigation efforts and adaptation efforts, which must both be pulled.
Lever 1: Closing the ‘mitigation gap’ – mitigating the extent of future climate change through emissions reduction and carbon sequestration
“The projected CO2 emissions from existing and planned fossil fuel infrastructure and operations alone (without additional abatement) is equal to the remaining carbon budget to limit warming to 2°C.”
Up to six-times the modelled mitigation investment between 2020 – 2030 is required to meet the mitigation goals, with approximately US $100 billion required to flow to developing countries. There is sufficient global capital and liquidity to achieve this, even with current significant but counterproductive private and public finance flows for fossil fuels (which is greater than that for climate change mitigation and adaptation). Among other financial signals and actions, shifting investments from fossil fuel industries to climate change mitigation activities (examples in Figure 1) would increase the likelihood of remaining within the carbon budget of 500 Gt CO2e to achieve a 50% likelihood of limiting warming to 1.5°C.
Figure 1: Climate adaption and mitigation options (source IPCC AR6 Summary for Policymakers)
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It is important to recognise that there has been progress – 18 countries have successfully achieved sustained emissions reductions. However, these reductions have only partly offset global emissions growth, and more needs to be done to bridge the implementation gap between the NDCs and the policies announced to date. Collective effort to decarbonise is needed, with each sector and policy having its role to play.
Lever 2: Closing the ‘adaptation gap’ – ensuring society and nature can survive the inevitable climate change already locked in
Some degree of climate change and associated impacts to our environment and society are inevitable and must be adapted to, to maintain a liveable future. There is a widening gap between the estimated costs of adaptation and the finance allocated to it, and hard and soft adaptation limits are being reached (soft adaptation limits referring to where further adaptation is constrained by funding, resources etc., while hard adaptation limits are where further adaptation is not physically possible due to the environment/society reaching the absolute limit of change).
The underfunding of adaptation is significantly worse than that of mitigation, and the longer the wait for adaptation investment, the more costly and less effective it will be. Integrated, multi-sectoral solutions that differentiate based on climate risk, cut across systems, and address social inequities will increase the effectiveness and overall cost of adaptation activities.
Every organisation and level of government has a role to play in adaptation, in both ensuring our organisation specific resilience, and coordinating solutions to ensure efficient delivery and a safety net for vulnerable groups.
Collaboration between and within sectors will be fundamental in enabling system adaptation (for example, between government, utilities, land developers, and community groups in creating sustainable urban environments). It will also help to minimise business risks such as supply chain disruptions due to climate and geopolitical shifts, improve the circularity of resources, and ensure an equitable outcome for all as we adapt to climate change.
Impacts and actions for Australia
Australia is a vulnerable region to climate change, with different impacts across our multiple subregions and industries, with real impacts to human and environmental health, wellbeing, and economic productivity.
Most of Australia will experience decreasing rainfall (and is already being experienced in some areas such as the south-west) (Figure 2). When there is rainfall, it is expected to be more intense and come with a higher risk of flooding.
Figure 2 – Predicted rainfall change in Australia (source Climate Change In Australia (DCCEEW), 'Rainfall Change")
These changes come with risks to key industries such as agricultural productivity (Australia is predicted to be one of the most adversely affected regions in terms of agricultural production and exports). Many natural and built environments will be at increased risk of natural disasters such as flooding, cyclones, and bushfires.
To reduce the potential warming and risk from inevitable climate change, governments, businesses and private citizens are beginning to plan and act with climate risks in mind.
Businesses are increasingly assessing their climate-related (and/or nature-related) risks under a recognised framework such as the Taskforce for Climate-Related Financial Disclosures (TCFD) and include the findings in broader strategic planning to both incorporate physical and transition risk into business planning (see examples of adaptation options in Figure 1). This practice is becoming expected by investors and financiers to demonstrate genuine consideration of the future impacts of climate change on operations. The soon to be released IFRS S1 and S2 sustainability accounting standards will standardise sustainability reporting in the future (which businesses should begin to prepare for) and reduce greenwashing risks.
Organisations are also striving to reduce their own contribution to the carbon budget, through aiming for carbon neutrality (or even carbon positivity, contributing to the removal of carbon in the atmosphere). The first step is understanding your organisation’s emissions baseline and plotting an achievable pathway to carbon neutrality within the context of your business. In many cases, achieving carbon neutrality creates cost savings and positive social co-benefits for staff and stakeholders.
At the large polluter end of the spectrum, in Australia the Safeguard Mechanism is a key mitigation policy instrument (and is going through changes to increase the stringency of emissions reductions and likely to expand to a broader range of polluters in the future). Announced changes to the Mechanism are likely to push big polluters to invest in decarbonisation solutions for industry in order to remain within their carbon baselines, and will help to achieve Australia’s NDC.
Federal and State Governments have also developed a range of climate change adaptation policies and plans. The National Climate Resilience and Adaptation Strategy operates over four domains – the natural, built, social and economic domains. To be successful, all actors in these domains will need to consider adaptation beyond formal strategies and embed thinking into day-to-day business.
The success of announced policy instruments requires collective buy-in and effort across all sectors and levels of influence – and it still may not be enough to limit the effects of climate change. Now is the time for organisations to act, with deep and sustained climate action required this decade to avoid severe, irreversible damage to the environment and society.
How can Rennie help?
Rennie provides support to organisations across all sectors and maturities on their climate and sustainability journey. If your organisation is seeking advice on how to be a part of the collective climate change mitigation and adaptation effort, including through organisational emissions baselining and carbon neutrality, TCFD risk assessments and gap analysis, IFRS S1 and S2 gap analysis, or strategic planning and assessment regarding changes to the Safeguard Mechanism, please reach out to Arvind Sharma, National ESG and Sustainability Lead.
For more information, get in contact with us today
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