#2 Transformations required for 1.5°C alignment and global sustainability
The IPCC Special Report released in late 2018, highlighted the urgency of minimising global temperature rise to 1.5°C and emphasised the need for systems transitions that can be enabled by investments in climate change mitigation and adaptation, policy and acceleration of technological innovation and behavioural changes (IPCC; 2018).
Amongst the emissions pathways scenarios, it proposed, for the first time, a limited or no overshoot scenario – the P1 low energy demand (LED) scenario, where future energy demand could be met through low-emission energy sources and enhanced energy efficiency.
This scenario presupposes that system changes are more rapid and pronounced over the next two decades.
Five years after the Paris Agreement, and with calls by the IPCC for urgent action in the coming decade to prevent climate change catastrophe, 2020 has been billed as a key year for climate action.
The COVID-19 crisis that has accompanied this year marks a point of transformation for the economy and society: it has demonstrated how remarkable and rapid systems change can be.
The global pandemic has given us a clear opportunity to pave the way for building back better and establishing new norms, as well as lessons that can inform how we might face the unabated climate crisis and future climate shocks.
A paradigm shift is needed if we are to move towards a limited or no-overshoot climate scenario. Stakeholders in financial markets, capital and investment represent important levers of change, as they have a key allocative role in society, and can enable investment into a net-zero low-energy future.
Financial intermediaries can effectively support and enable societies to mobilise the investment required for the systems change needed to transition economy and society onto a net-zero pathway that is compatible with 1.5°C by 2100.
This paper discusses the necessary transformations and new opportunities in the global economy and finance sector to meet the objectives of the Paris Agreement. The paper is presented in five sections.
The first section introduces a matrix identifying stakeholder roles and actions for climate alignment, compatible with a 1.5°C pathway.
This matrix has two axes:
- Y-axis: What actions in society are perceived to be necessary in relation to climate change?
- X-axis: What are the perceived roles of individual stakeholders or companies?