Five years on

The past five years have given many reasons for optimism about climate change

I have now been writing this blog for just over five years, and it seems timely to step back and look at how the climate change problem appears now compared with five years ago.

In some ways it is easy to feel discouraged.  In the last five years the world has managed to get through about a tenth of its remaining carbon budget, a budget that needs to last effectively forever.

However, in many ways there seem to be reasons for much greater optimism now than five years ago.  Several trends are converging that together make it appear that the worst of the risks of climate change can be avoided.

There is increasing action at the national level to reduce emissions, reinforced by the Paris Agreement …

Legislation is now in place in 164 countries, including the world’s 50 largest emitters.  There are over 1200 climate change and related laws now in place compared with 60 twenty years ago[i].  And this is not restricted to developed countries – many lower income countries are taking action.  Action at national level is being supported around the world by action in numerous cities, regions and companies.

This trend has now been reinforced by the Paris Agreement, which entered into force in November 2016, and commits the world to limiting temperature rises and reducing emissions.

There is increasing evidence of success in reducing emissions …

Many developed countries, especially in Europe, have shown since 1990 that it is possible to reduce emissions while continuing to grow their economies.  Globally, emissions of carbon dioxide from energy and industry have at least been growing more slowly over the past four years and may even have reached a plateau[ii].

Carbon pricing is spreading around the world  …

Among the many policies put in place, the growth of carbon pricing has been especially remarkable.  It has grown from a few small northern European economies 15 years ago to over 40 jurisdictions[iii].  Prices are often too low to be fully effective.  However, carbon pricing has also been shown to work spectacularly well in the right circumstances, as it has in the UK power sector.  And the presence of emissions caps in many jurisdictions gives a strong strategic signal to investors.

Investors are moving out of high carbon sources and in to lower carbon opportunities …

Companies are under increasing pressure to say how their businesses will be affected by climate change and to do something about reducing emissions.  And initiatives such as the Climate Action 100+, which includes over two hundred global investors controlling over $20 trillion of assets, are putting pressure on companies to step up their action.  This will further the trend towards increasing investment in a low carbon economy.  Meanwhile, many funds are divesting from fossil fuels, and vast amounts of capital are already going into low carbon investments.

Falling costs and increasing deployment of renewables and other low carbon technologies …

Solar and wind power and now at scale and continuing to grow very rapidly.  They are increasingly cost-competitive with fossil fuels.  The decarbonisation of the power sector thus looks likely to proceed rapidly, which will in turn enable electrification to decarbonise other sectors.  Electric vehicle sales are now growing rapidly, and expected to account for the majority of light vehicle sales within a couple of decades.  Other technologies, such as LED lighting are also progressing quickly.

This is not only making emissions reductions look achievable, it is making it clear that low carbon technologies can become cheaper than the high carbon technologies they replace, and can build whole new industries as they do.  As a reminder of just how fast things have moved, in the last five years alone, the charts here show global generation from wind and solar since 2000.

Falling costs of low carbon technologies, more than anything else, gives cause for optimism about reducing emissions.  As lower carbon alternatives become cheaper the case for high carbon technologies will simply disappear.

Charts: Global Generation from Wind and Solar 2000 – 2017

Sources:  BP Statistical Review of World Energy, Enerdata, GWEC, IEA

Climate sensitivity looks less likely to be at the high end of the range of estimates …

The climate has already warmed by about a degree Celsius, and some impacts from climate change have been greater than expected.  However, the increase in temperature in response to increasing concentrations of greenhouse gases has so far shown few signs of being towards the top end of the possible range, although we can never rule out the risk of bad surprises.

Taking these trends together there is reason to be cautiously optimistic …

There will still be serious damage from climate change – indeed some is already happening.  And it is by no means clear that the world will act as quickly as it could or should.  And there could still be some nasty surprises in the earth’s reaction to continuing emissions.  Consequently, much effort and not a little luck is still needed to avoid the worst effects of climate change.

But compared with how things were looking five years ago there seem many reasons to believe that things are beginning to move in the right direction.  The job now is to keep things moving that way, and to speed up progress.

Adam Whitmore – 10^th April March 2018 

[i] http://www.lse.ac.uk/GranthamInstitute/publication/global-trends-in-climate-change-legislation-and-litigation-2017-update/

[ii] http://www.pbl.nl/sites/default/files/cms/publicaties/pbl-2017-trends-in-global-co2-and-total-greenhouse-gas-emissons-2017-report_2674.pdf

[iii] https://openknowledge.worldbank.org/handle/10986/28510