1.5C is a Coin Flip
Headlines circulating this week provided a sobering update on the global warming forecast when the World Meteorological Organization (WMO) reported that there is a 50:50 chance we will overshoot the 1.5C warming threshold in the next four years.
The WMO’s study gathered data from forecast centers around the world, and concluded that our probability of exceeding 1.5C by 2026 has risen significantly to 50%. There’s also a 93% probability that the next five years will be the hottest on record. Now, it’s basically a coin flip on whether or not global temperatures will average 1.5C higher than pre-industrial levels over the next four years.
This shocking news needs some context: Most readers will recognize the 1.5C threshold as the aspiration from the 2015 Paris Climate Accord which was ratified by all countries in the world. The actual goal of the Paris Accord is to limit global temperature rise to “well below 2.0C, preferably 1.5C”– and the thresholds are based on sustained temperature over a 20-30 year period.
While this is an ominous sign, it's not a reason to stop fighting climate change. If anything, the message is to turn up the urgency – such as the announcement this week that the US will invest $2.5B in carbon capture technology.
And no wonder…
This grim milestone comes as no surprise as fossil fuel companies are gaining record profits with the soaring price of oil and gas driven by the war in Ukraine. Is the industry investing their outsized profits in the transition toward a low carbon economy? Nope…most of the money is going into buying back shares of their own companies. “The oil and gas industry, in addition to trying to seize this moment for all the profits it can squeeze, is trying to lock in another generation of extraction emissions,” says Lukas Ross, a program manager at Friends Of The Earth.
The windfall has resulted in expansion of fossil fuel extraction equating to 192 billion barrels over the next seven years – the equivalent of a decade of China’s current emissions. These expansions have been called “carbon bombs” – one of largest is a new boom in US fracking that could unleash 140 billion tons of carbon dioxide.
The torrent of oil and gas money resulted in a stunning policy reversal at the world’s largest asset manager, BlackRock, which warned shareholders this week that they will not be supporting many shareholders' resolutions on climate change. Their reasoning? The war in Ukraine has changed the playing field for oil and gas investment. Perhaps in an effort to offset their reversal on the ‘E’ in ESG, BlackRock increased investment in the ‘S’ by contributing $800 million to their Impact Opportunities Fund. The fund invests in businesses and projects owned, led by, or serving people of color.
The Bright Side
With less than ideal climate forecasts, here’s a dose of positivity: renewable energy is set to break growth records again in 2022 and the EU just announced a $205 billion plan to wean itself off Russian oil and gas.
The blueprint to a decarbonized world was covered well by an article in Nature, which concluded that, if countries achieve their climate action pledges, global average temperature rise will stay below 2.0C. There is more good news on the corporate side as carbon-intensive United Airlines became the first US carrier to purchase sustainable aviation fuel.
While short-term profits may be up, oil and gas shareholders continue to demand stronger carbon reduction pledges. I covered climate activism during the annual general meetings of the banks financing the fossil fuel industry in this article.
Missed our latest edition of ESG & Climate News? Check it out now and stay in the know: May 06, 2022.
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