Climate finance requires substantial shifts in markets

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The gap to avoid certain future disasters is closing and the world is strolling to avoid the worst, according to scientists. This is why it is critical that everyone understands climate change language. Climate change diplomacy at large conferences like the 27th gathering of the COP in Egypt involve technical language and common concepts that are often unfamiliar to the general public, yet the outcomes have enormous consequences for everyone, particularly society’s most vulnerable 

Climate change issues are loaded with technical terms that directly relate to dealing with and preventing the unnatural warming of our planet.

This warming is fueled by past and present greenhouse gas emissions that are trapping heat in the air: Carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and the fluorinated gases (F gases) that are released from various industrial, commercial and domestic activities such as electricity generation, steel and cement production, transport, agriculture, refrigeration and air conditioning. 

Global energy production is still largely reliant on fossil fuels, which have released the bulk of historical emissions trapped in the atmosphere. Scientific assessments like those of the Intergovernmental Panel of Climate Change (IPCC) dating back to 1990 have evolved with technological and scientific modelling advancements and have consistently shown increased proof that this heating is occurring and that it is anthropogenic, meaning it originates from human activity. 

The science 

The IPCC gains its credibility from the transparent, robust peer reviewing and rigorous checking process on its research and supporting data, showing the extent and risks of the warming. It took eight years before it released the Sixth Assessment in 2022, warning, among other things, that our capacity to handle the current projected warming is slowly narrowing, and so is the time available to avoid the worst. 

The reports are a synthesis of large quantities of available data and research by hundreds of experts around the world. In the Fifth Assessment, 830 lead authors and review editors drew on the work of over 1 000 contributors. In addition about 2 000 experts provided over 140 000 review comments. The IPCC findings are largely responsible for the 1.5C warming target. 

To put warming into perspective, there is only a 2% temperature difference between a person whose body temperature is regarded as normal (36 or 37C) and readings that indicate someone is seriously ill from infection at 38, 39 and 40 degrees celsius. In climate science, one degree of warming can be the difference between liveable and unlivable land. At present the outcomes of the COP are not aligned to the urgency and scale of the IPCC science and recommendations. 

Mitigation

Mitigation is the act of stopping current and future greenhouse gas emissions to limit warming to liveable levels. It involves decarbonising major industries and moving towards greener sustainable development that is less reliant on fossil fuels. Other greenhouse gases such as methane are expected to see an uptick as countries turn to natural gas for energy. Meanwhile fossil fuels like coal are seeing increased demand and boom in the global market in the short term because of global energy insecurity, and a number of developing nations are only willing to peak their emissions after 2025 and 2030. This may require historically high emitters to reduce emissions at a faster pace and scale to bring emissions as close to zero as possible by 2050. Reforestation and restoration are key to mitigating climate change by using plants’ natural ability to absorb carbon dioxide, although questions around whether they can single-handedly do so is a continued topic of debate. 

To support mitigation various financial mechanisms have been introduced, such as carbon tax on high emitting industries and carbon markets, which are essentially trading in certificates linked to emission reduction activities. Sasol, for example, can contribute to emission reduction activities away from its operations and count that credit towards its reductions or sell that credit on the carbon market. Finance is needed to move global energy to renewable systems and invest in the technology to capture CO2 in the future. 

Fair Share

For share refers to a country’s responsibility on climate action in the context of its development and historical emissions, which are generally low for emerging markets. Parties under the COP submit nationally determined contributions that indicate how much they are willing to cut emissions over a certain period in relation to their fair share of the crisis. A country like Zimbabwe, for example, would not share the same responsibility towards mitigation as the US or Australia. Developing countries are heavily reliant on financial support to cut emissions and developed nations have committed to helping them. 

Adaptation & Resilience

Adaptation and resilience are society’s ability to withstand present and future climate related shocks such as extreme weather, slow onset disasters like drought and sea level rise as well as the health, economic and social risks associated with these events. Calls to put as much focus on adaptation as mitigation at the COP level have intensified over the years, but financial targets have been missed. Wealthy nations are already due to set a new financial target to support developing countries faced with the risks of climate change — a task that COP27 failed to complete. Scientists have recommended restoration of natural ecosystems as key to building the natural adaptation capacity to withstand current and future climate impacts. This is driving global calls for a new deal for nature that will conserve and restore nature’s ability to continue providing resources for humanity.