Climate Risk, Climate Transition and the Role of

Finance and Corporations – Key facts and milestones

Jean Jouzel

Laboratoire des Sciences du Climat et de l’Environnement (CEA-CNRS-UVSQ) / IPSL

What do we know on the reality of climate change?

What are the risks and the opportunities related to the climate transition?

Why should it matter for businesses?

What can be the specific role of finance in tackling climate change?

Paris

Le 12 Septembre 2016

2015 : the warmest year since 1850

Since the beginning of the industrial era, human activities have led to

an increase of greenhouse gases (GHG) which leads to an accumulation

of heat in the climate system ( ~ 1% increase since 1750). Only 1% of this « additional » heat is used by the atmosphere,

93% in the ocean, 3% for the cryosphere, 3% continents.

Upper Ocean heat Content N.H. Spring snow cover

Global average sea level Arctic sea ice minimum extent

Global warming is uniquevocal and unprecedented

Contributions to the

warming

observed since 1950

- 0,5°C 1°C 0,5°C 0

A large part of this warming results from human activities (95% chance)

−0,55 −0,5−0,6 −0,4 −0,35−0,45 −0,25 −0,2−0,3 −0,1 −0,05−0,15(pH)

109

−20 −10−30−50 −40 0 10 20 30 40 50

b)

c)

RCP 2,6 RCP 8,5

Évolution des précipitations moyennes (entre 1986-2005 et 2081-2100)

Étendue de la banquise dans l’hémisphère Nord en septembre (moyenne sur 2081-2100)

29 (3) 37 (5)

3932

d) Évolution du pH de la surface des océans (entre 1986-2005 et 2081-2100)

(%)

a) Évolution de la température moyenne en surface (entre 1986-2005 et 2081-2100)

3932

(°C)

−0,5−1−2 −1,5 0 1 1,5 2 3 4 5 7 9 110,5

Moyenne multimodèleCMIP5 2081-2100

Moyenne multimodèleCMIP5 1986-2005

Moyenne sous-ensembleCMIP5 2081-2100

Moyenne sous-ensembleCMIP5 1986-2005

Emitting scenario (8.5)

Low emission

Scenario (2.6) 5 categories of risk

• Ocean acidification, coral reefs

• Climate extremes

Droughts, floods, heat waves, cyclones

• Populations

Climate refugees, water resources, food security, security

• Biodiversity, agriculture, ecosystems, pollution, health,

• Irreversible processes

Sea-level, permafrost

If nothing is done

Very important effects for all categories

Virtually certain

--- Very likely -

--- Very likely -

- Likely----

- Likely

- Likely

- Likely

--- Very likely

Virtually certain

- Likely

Sea level

rise will

continue

beyond

2100

Coastal systems and low-lying areas will increasingly experience adverse impacts such as

submergence, coastal flooding, and coastal erosion

5 categories of risk

Température at stabilization

(long term) is roughly

proportional to cumulative

CO2 émissions

Objective 2°C : we have already used 68% of our carbon budget

GtC = milliard de tonnes

Emitting scenario (8.5)

Low emission

Scenario (2.6)

2°C : Less than 20% of CO2 reserves should be used

(assuming that concentration of other GHGs no longer increase)

Less than 25 years at the current rate of emissions ~ (10 GtC)

Would be possible if and only if :

- rapid stabilization of GHG emissions (2020 at the latest)

- division by up to a factor of 3 between 2020 and 2050

- Carbon neutrality should be ensured before the end of the century.

Technically feasible and economically viable.

Need for research and innovation (energy production, energy use, transport, buildings, industry, agriculture, forestry, ….. )

Loss of 1 year of GDP every 30 years without accounting of benefits

What do we know on the reality of climate change?

– Uniquevocal, quite certainly due to human activities, will continue

What are the risks and the opportunities related to the climate transition?

– Large and various impacts, increased risks, many opportunities

Why should it matter for businesses? example of investments : energy

What can be the specific role of finance in tackling climate change?

– A central role as illustrated by the Paris agreement

Renewables

Nucl CCS

Low carbon scenario : changes in investment

Fluxes 2010-2029 : US Billion dollars/year

noCCS Electricity Extraction

Efficiency

Article 2 : Making finance flows consistent with a pathway towards

low greenhouse gas emissions and climate-resilient development.

500

Climate Convention (UNFCCC) launched in1992, Rio Earth Summit

Ultimate objective of the Climate Convention (article 2) :

To achieve stabilization of greenhouse gas concentrations in the

atmosphere at a level that would prevent dangerous anthropogenic

interference with the climate system. Such a level should be achieved

within a time frame sufficient :

to allow ecosystems to adapt naturally to climate change,

to ensure that food production is not threatened

to enable economic development to proceed in a sustainable

manner.

Climate Convention (UNFCCC) : Paris agreement :Article 2

(a) Holding the increase in the global average temperature to well

below 2 °C above pre-industrial levels and to pursue efforts to

limit the temperature increase to 1.5 °C above pre-industrial

levels, recognizing that this would significantly reduce the risks and

impacts of climate change;

(b) Increasing the ability to adapt to the adverse impacts of climate

change and foster climate resilience and low greenhouse gas

emissions development, in a manner that does not threaten food

production;

(c) Making finance flows consistent with a pathway towards low

greenhouse gas emissions and climate-resilient development.

JJ : Do it now and take the leadership

Paris (COP21) : some key points

Unlike Kyoto and Copenhagen where objectives were defined by the Convention, countries were invited to propose their own contribution (INDC)

As a result, nearly all countries agreed at Paris (signed at New-York last april)

Three main aspects :

- limit warming well below 2°C (Pre-industrial) and pursue efforts towards 1.5°C

- importance of adaptation

- Making finance flows consistent with these objectives

Contribution of developed countries : 100 billions of USD/year starting 2020 (floor)

Contributions are significant but insufficient : towards 55 GtCO2eq in 2030 while it

would be necessary to be around 40 GtCO2eq. Trajectories towards 3-3.5°C warming.

Need to increase the ambition (such a possibilty exists in the agreement)

Civil society was deeply mobilized (very important)

Too weak commitments from now to 2020

No discussion on a carbon price and/or carbon markets

No involvment of bunkers (air transport and maritime transport)

The agreement is not legally binding