Well before 2023 drew to a close, scientists informed us how the year was the hottest one on record. Warm fall days sum up to record-breaking summer temperatures amid rising sea levels and a higher frequency of extreme weather events. Among the many bad news, there’s room for some hope, too.
Why you need to know this
Extreme weather events, rising water levels, and higher temperatures are all proofs of how the climate is changing. Among many bad news, it’s important also to underline the positive transitions happening and try to make the green transition happen.
According to a recent study published by the German non-profit NewClimate Institute, five major shifts have occurred since the Paris Agreement’s signing in 2015. While underlining that the implementation of the ambition mechanism is going slower than what’s needed, the study wanted to look at what has been achieved. This way, insights into the dynamics of change can be obtained to build for the decade to come.
But what are the five shifts underlined by the study?
- Climate change discourse has become mainstream;
- Most countries are aiming to reduce emissions to net zero;
- Businesses and investors feel the urgency to act on climate;
- Renewables reached cost parity with fossil fuels;
- Electrification has progressed, and the industry is working on zero-carbon strategies.
Higher awareness of climate change
Since 2015, there has been a growth trend in media coverage about climate change. While peaks and dips can be observed, media now covers regular stories related to climate change, reaching audiences via mainstream channels and social media.
The International Panel on Climate Change (IPCC) sixth assessment report on climate change coverage across 59 countries noted an increase in news pieces around the topic. In the period from 2020 to 2021, 87,000 articles were tracked, compared to 47,000 from 2016 to 2017.
Besides, the NewClimate Institute study also highlights how people increasingly perceive climate change as a serious issue. The report mentions the results of a BBC survey in 2021 covering 17 world countries. While in 2014, only forty percent of the respondents voiced concern over climate change, in 2021, the share increased to over sixty percent.
Wider net zero ambitions
Through the past few years, world countries have widely recognized that emissions have to be reduced to zero by every country across the economy. Before the Paris Agreement, a zero-emissions world was out of discussion. In 2015, Bhutan was the only country to have set a net-zero target.
As of now, over 90 countries – accounting for four-fifths of global emissions – have this ambition. While in the past, the policy debate focused on incremental emission reductions and trade-offs between sectors and countries, a fully decarbonized economy became a mainstream vision.
Investors feel the pressure to act
From a niche topic, businesses and investors now feel the pressure to act on climate. Companies are now recognizing climate change as a threat due to societal pressure. Retail investors are demanding sustainable options, and asset managers are providing more and more sustainable investment options.
Moreover, many companies now have to report and disclose their climate impacts. For instance, the new EU sustainability reporting requirements will apply to all large companies with over 250 employees and a turnover of 40 million euros. Therefore, companies are now willing to choose more sustainable options.
According to consulting company PwC, in 2021, 84 percent of asset owners globally reported to be implementing or evaluating sustainable investment strategies compared to about 53 percent three years earlier.
Renewables are cost-competitive
Renewables reached cost parity with fossils – and solar is now the cheapest form of energy – and power systems are shifting to flexible and decentralized models. In the last ten years, the cost of solar, onshore, and offshore wind fell down by 60-90 percent.
New renewables are now cheaper than new fossils in ninety percent of the world, and newly built onshore solar and wind projects are forty percent cheaper than new coal and gas plants. This resulted in significant investments in renewable power, surpassing fossil fuels by a factor of five. New renewables are also cheaper than running existing coal or gas plants in half of the world, the study also reports.
Electrification progresses
The electrification of society progresses, driven by technologies that become mainstream such as electric vehicles and heat pumps. Before 2015, energy demand and hard-to-abate sectors hunkered down behind the energy supply to decarbonize first. Thanks to innovations and investments, shipping and heavy industry are electrifying themselves.
As many countries are working to – or have announced – combustion engine cars phase-out, more electric vehicles are reaching the roads, and the charging infrastructure is developing. Meanwhile, battery storage technology has also seen a drop in costs. Particularly, lithium-ion battery cost, the dominant battery technology, decreased by eighty percent between 2012 and 2022.
With most of the work to make the transition happen still ahead of us, the first shifts are happening. Following COP28’s intention to shift away from fossil fuels, the mission has been reinstated, and given the trends highlighted by the NewClimate Institute, there’s room for hope.
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