Aug 9 2017, by Nafeez Ahmed on Motherboard
Image: Barnaby Chambers/Shutterstock
A leading British global investment firm has a warning for its clients: If we keep consuming oil and gas at current rates, our planet is on course to experience a rise in global average temperatures of nearly 8℃ (14℉) by the end of the century. This would make Earth basically uninhabitable for humans.
Although this is the darkest scenario we’ve seen so far, there’s reason for cautious optimism: the new projections point out that it’s unlikely investors will simply ignore this risk, meaning that our present level of fossil fuel consumption could decrease.
The Climate Progress Dashboard has been developed, a briefing says, to “help investors base decisions on the outcomes that are likely, rather than those they would like to see.” It attempts to assess the progress being made by governments and industry on meeting climate targets. It breaks down what would happen to global temperatures if we continue on our current business-as-usual course, based on 12 different measures.
Those measures include ‘political ambition,’ which looks at the existing pledges made by governments; progress from major corporations on issues like ‘climate finance’ (new investment in efforts to curb or adapt to climate change) and ‘carbon prices’ (taxing carbon dioxide emitters); technological progress on factors like renewable energy adoption; as well as the potential future impact of current levels of oil, gas and coal production if they continue.
Andrew Howard, Schroders’ Head of Sustainability Research, told Motherboard that the firm’s analysis is based on comparing current levels of action in these 12 areas to different emissions scenarios that would lead to either 2, 4, or 6℃ of global warming.
Effectively, the Schroders analysis works backwards from the IEA’s scenarios. “By comparing the level of activity in a particular area, for example EV (electric vehicle) sales, to what it would need to be under different temperature scenarios, we can estimate the temperature rise consistent with observed activity,” explained Howard.
Viewed in isolation, each of these measures suggests a certain level of temperature rise.
Even if existing carbon reduction pledges, for instance, are implemented, the dashboard says this would still lead to a 2.8℃ warmer world by 2100—which is already well over the 2℃ limit that many scientists deem as acceptable to avoid the worst effects of climate change.
Technological progress, however, is not keeping pace with government pledges. So current rates of renewable energy adoption, the dashboard suggests, would lead to a rise of 3.1℃.
Schroders finds that this rate puts us on course to hit a global average temperature rise of 7.8℃ by 2100, if nothing changes
When all the measures are averaged out, the dashboard’s overall scenario reveals that based on current government and industry practice, we are heading for a 4℃ hotter world—still double the internationally-recognised ‘safe limit’ for climate change. However, the most alarming projection—and perhaps the most relevant in terms of assessing where the worst risk is—can be found in the fine print.
It’s not game over yet, though. According to the Schroders briefing to its clients about the dashboard, it represents “a snapshot” of where we stand, not a firm prediction of where we will end. The briefing clarifies that all measures on the dashboard, including oil and gas production which depends on a wide range of factors—supply, demand, the gas glut, geopolitics, developments in renewable energy and storage, and so on—will likely change over several decades.
“As a result, the dashboard conclusions must be seen as measures of the paths we are currently on, rather than conclusions on where we will end up,” said Howard.
He confirmed to Motherboard that the current oil and gas scenario was derived from production data in BP’s 2017 Statistical Review of World Energy report. “It’s clear that much more hydrocarbons are [currently] extracted than what the IEA analysis in particular considers consistent with safe temperature rises,” he said.
Schroders also warns that a 6 ℃ or above pathway would lead to “up to a 50% loss in global GDP.” Of course, massive GDP losses are just one element. Scenarios developed by the UN’s Intergovernmental Panel on Climate Change (IPCC) show that a 6 ℃ average temperature rise or above will lead rapidly to an increasingly uninhabitable planet.
Some of these ecosystem collapses could, according to NASA’s former chief climate scientist James Hansen, trigger an out-of-control runaway warming process.
The briefing, and the dashboard itself, are both designed to inform investors of climate risks that analysts at Schroders believe are not being factored into investment decisions.
“Investors who are unprepared or who have relied on overly simplistic analysis risk losses and missed opportunities,” the briefing explains. “This is why gauging the timing and depth of market discounts for climate impacts is as important as analysing their effect.”
It also touted the closing gap between global ambition and political action. The dashboard does not set out what will inevitably happen, but what would happen if business-as-usual continues, so any progress would help. And current trends show clear signs of change.
“Clean energy technology in particular continues to power ahead without the political support it needed in the past. Costs of wind and solar have declined to the point where they are competitive with fossil fuels, even without subsidies.”
The dashboard shows unmistakably that our current pathway is heading to unprecedented disaster: but it also shows that there is a good chance this worst-case scenario can be averted, as some of the world’s biggest investors begin to pay serious attention to the potential consequences of what will happen if we don’t change course.