Urgent action to achieve Climate Stability

Climate Change and its impacts: Europe is ground zero for climate change

While we often think, climate change is something that takes place in the future and far away, it increasingly strikes home. According to the scientist Johan Rockström, Europe is ground zero for climate change. Europe and Switzerland are warming twice as fast as the average global temperature. Compared to preindustrial levels, the average global temperature has increased by 1.2 degrees Celsius. The Paris Agreement aims to limit global warming to well below 2 degrees Celsius compared to pre-industrial levels and preferably to 1.5 degrees Celsius. The Sustainable Development Goal (SDG) 13 of the UN Agenda calls for urgent climate action to limit global warming to 1.5 degrees Celsius.

In Europe and Switzerland, the average temperature has already increased by 2.1 degrees Celsius compared to preindustrial levels. As a result, we see increased heat waves, more intense and frequent rainfall, which means droughts have become more frequent. Vegetation periods are changing, and the glacier volume is rapidly decreasing. Since 1850, Switzerland has lost 60% of its glacier volume and in 2022 alone, the mass balance of Swiss glaciers lost 6%, some of them disappearing entirely.

The Intergovernmental Panel on Climate Change (IPCC) is the UN body responsible for advancing knowledge about human-induced climate change. In its latest report, it has stated clearly that the climate crisis, through increased heatwaves, droughts, and floods, already today exposes millions of people to acute food and water stress. This also drives further mass extinction of species such as trees and corals. As a result, the IPCC states, “Climate Change (is) a threat to human wellbeing and health of the planet”.

To avoid the mounting loss of life, biodiversity and infrastructure, urgent action against the climate crisis is necessary.

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SDG 13: Climate Action is needed to limit rising global temperature

The UN Climate Change Conference COP27 in Sharm-El-Sheik, Egypt, brings together the UN member states to renegotiate commitments for climate pledges and policies. As of September 2022, approximately 88% of global emissions are covered by net zero targets, that includes the European Union, China, India and the United States.

Net zero means reducing CO2 emissions to nearly zero and absorbing the remaining emissions. Considering the current climate policies and pledges, the resulting global temperature increase by the end of century is estimated to result in outcomes between 1.8 - 2.5 degrees Celsius. Many of the net zero targets are still inadequate. To enter on a pathway for 1.5-degrees Celsius, the global CO2 emissions would need to be halved by 2030 and achieve net zero CO2 emissions by 2050 or sooner. It becomes imperative to close the ambition gap of approximately 25 gtCO2e by 2030 according to the most recent Emission Gap Report by the UN Environment Programme.

If climate action is not further accelerated, we will likely miss the target of limiting global warming to 1.5-degree Celsius by the end of the century compared to preindustrial levels with increased negative impacts.

SDG 7: Mobility and energy transitions to reduce carbon emissions

The SDG 7 aims to increase universal access to clean and affordable energy and to substantially increase the share of renewable energy in the global energy mix.

Many companies understand the urgency of climate change and take climate action by decarbonizing their operations and providing solutions to achieve a low carbon economy. A variety of low-carbon technologies and many renewable energy sources are already available.

According to Our World in Data, in 10 years (2009 – 2019), the price of solar electricity declined by 89%. In the same timeframe, the price of onshore wind electric declined by 70%. As a result, solar electricity has become the cheapest energy source, closely followed by onshore wind. This increasingly drives the energy transition, substituting fossil fuels and electrification. Wind, solar and other renewable energy are growing faster than ever. In the last 30 years the price of batteries declined by 97%, becoming an important driver if e-mobility and electric vehicle (EV) sales which are rapidly increasing.

SDG 11: Cities are hotspots of climate effects but can be (and must be?) part of the solution

The SDG 11 calls for sustainable and inclusive cities and communities by reducing adverse environmental impacts and implementing integrated policies and plans towards inclusion, resource efficiency, mitigation, and adaptation to climate change.

Urban areas are home to most of the global population, which are increasingly at risk and vulnerable to the effects of climate change. The most rapid growing urban areas have been in cities and especially informal settlements, which only have limited adaptive capacity to climate change.

According to the IPCC, human and economic loss can result from direct impacts such as heat stress and compounding with other hazards such as poor air or water quality.

Climate impacts are felt disproportional in urban settlements with the socially and economically marginalized affected the most. At the same time, urbanization is a key opportunity to increase resource efficiency and decarbonise at scale, according to the IPCC. The global share buildings and construction operational and process related CO2 emissions account for 37% and reached an all-time high in 2021 as published recently by the UN Environment Programme.

While energy efficiency gains have led to a vast reduction of energy needs globally and energy efficiency investments have increased by an unprecedented 16%, it remains not enough to meet the Paris Agreement.

While cost of living increased due to the energy crisis, energy efficiency can moderate energy costs and help reduce emissions. Similarly, retrofitting of building stock by increasing energy efficiency and substituting fossil fuel heating and switching to renewable heating systems such as geothermal or district heating can decrease energy dependence.

The construction of buildings and the necessary materials such as concrete, steel, aluminum, glass, and bricks account for 9% of the overall energy-related CO2 emissions. Raw material consumption is set to double by 2060 and in-fast growing economies, construction material are likely to dominate resource consumption.

The resulting CO2 emissions could potentially undermine the Paris Agreement targets. Therefore, decarbonizing material production and building with low-carbon materials becomes key alongside extending the lifetime of buildings.

Action is required for climate stability

The radiTheme Climate Stability encompasses three Sustainable Development Goals: SDG 7 addresses the provision of affordable and sustainable energy for all, where a vast increase of renewable energy in the global energy mix, as well as substantial gains in energy efficiency by 2030, are targeted.

SDG 11 aims to make cities and communities more resilient and sustainable, partly through improved access to sustainable transport systems.

Finally, SDG 13 aims to promote rapid action against climate change and its devastating impacts, which includes adaptation, climate policy and awareness-raising.

Investors can address the funding gap for the sustainable provision of climate stability as described in the SDG 7, SDG 11 and SDG 13. For a more detailed view on how to invest sustainably, see our Investment Website.

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