Are we running out of time in the race against climate change?
This year, we have used up earth’s annual resource budget earlier than ever before. Have we turned up too late to win the race against climate change?
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The threat of a climate catastrophe is escalating. Humanity used the planet’s resource budget for the whole of 2019 by 29 July, marking a new earliest date for “Earth overshoot day” the third year in a row.
Economic expansion, rising consumption and growing resource use were always going to create problems in the context of finite natural resources and a constrained planet. Those problems are becoming more acute and the impacts unavoidable.
Earth “overshoot day” – 1970 to 2019
Source: Global footprint network, National footprint accounts 2019
The impacts of overspending are becoming increasingly evident, including deforestation, biodiversity loss and record concentrations of greenhouse gases (GHGs) leading to ever more frequent extreme weather events – to name only a few. Current levels of consumption imply the need for 1.75 planets to fulfil global demand.
Rather than take the bleak interpretation of that news, the evidence of damage is generating pressure that governments are responding to. Some policies intended, to combat the challenge, are starting to take effect. Set up in 2005, the price of one tonne of CO2 emitted as part of the European Union’s emission trading scheme has, over the last two years, risen from a meagre ~5€/t to close to 30€/t, close to its all-time high.
To meet the 2°C pathway global leaders committed to in the Paris Climate Agreement, this price will need to rise even more. Although there is a long way to go, there are signs that on this front and others, we are starting to see policies whose ambitions meet the scale of the challenge.
Price of CO2 per tonne in EU emission trading scheme
Source: European Commission Emissions Trading System
We’ve shown up late to a race that has been going on for decades and now have to play catch-up.
The second half of 2019 will see two major climate events: the UN Climate Action Summit in September and the COP25 event in Chile in December. Both events provide an opportunity to accelerate decarbonisation.
Whether or not they move the needle on action dramatically, pressure to act is growing and there are clear signs that global leaders are starting to respond.
We believe the upside for companies that enable faster decarbonisation through products or services is currently underappreciated.
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