United Nations body the Intergovernmental Panel of Climate Change (IPCC) has issued what has been described as its “bleakest warning yet” about what the failure to address the issue will mean for the world’s liveable future.
At more than 3,500 pages the report covers a vast number of themes, but what do traders need to know?
1. Go green and clean says UK
The UK is taking the report as an indicator of the need for more clean power and for nations to stick to agreements reached at the COP26 climate summit last year, reports Reuters.
“Today’s stark report from the IPCC is a reminder to the world about how climate change is affecting our planet, underlining that we need to go further and faster to adapt and generate more clean power to reduce countries’ exposure to expensive global gas prices, embracing the commitments of the Glasgow Climate Pact,” a UK government spokesperson said.
Boris Johnson has announced a 10-point plan for a Green Revolution which foresees Britain benefitting from leadership in clean technologies that will translate into export wins.
2. Brittle supply chains
Climate-related shocks such as extreme weather will become more common and severe, upsetting interconnected supply chains if governments do not build resilience, reports the FT.
The Russian invasion of Ukraine and global economic sanctions that are following have also underlined the world’s reliance on oil and gas and the need to prepare alternatives.
Food insecurity could affect many millions with areas of Africa and Asia already experiencing a slowing of growth in food productivity, reports Euractiv.
3. Shipping changes
Of all transport infrastructure, maritime ports are viewed as at the greatest risk from climate hazards such as rising sea levels and more frequent adverse weather, reports Splash 247.
A transformational adaptation approach to address climate impacts on maritime activities and increase security would relocate 41 ports, change centres of demand, reduce shipping distances, or shorten supply chains.
Shipping is also under scrutiny for the amount of pollution it produces – 3% of global greenhouse gas emissions, reports C&EN.
As previously covered in the IOE&IT Daily Update, the shipping sector is looking at ways of cleaning up its act, including proposed carbon taxes and corporate pledges to use zero-carbon shipping.
4. Joined up trade deals
Governments need to acknowledge the profound impact of their trade and investment policies on climate change, and reverse longstanding incoherence between climate policy objectives and the emissions-intensive trajectory of the global economy, reports Policy Options.
UK Export Finance (UKEF) has committed to decarbonising its financial portfolio and to increasing support for green exports to become a net zero organisation by 2050.
5. It’s everyone’s problem
The world faces unavoidable multiple climate hazards over the next two decades with global warming of 1.5°C.
The World Economic Forum has noted that trade and climate change discussions have long been siloed by policymakers, despite the impacts of trade on climate, and vice versa.
It calls on governments, businesses and civil society to work together and develop a clear dialogue with the likes of UN Environment, UNCTAD, WTO and the OECD.
“Our assessment clearly shows that tackling all these different challenges involves everyone – governments, the private sector, civil society – working together to prioritise risk reduction, as well as equity and justice, in decision-making and investment,” said IPCC Working Group II Co-Chair Debra Roberts.
