Climate risks are increasing. Many of the impacts described in this research paper will be locked in by 2040, and become so severe they go beyond the limits of what many nations can adapt to.
In preparation for the UN Climate Change Conference (COP26), to be held in Glasgow in November 2021, signatories to the 2015 Paris Agreement on climate change are for the first time revising their climate mitigation plans, or nationally determined contributions (NDCs). The Paris Agreement set the common goal of limiting global average temperature increases (relative to pre-industrial levels) to ‘well below’ 2°C and ‘pursuing efforts’ to 1.5°C; and envisaged a five-year revision process to NDCs to encourage increasingly ambitious national pledges. However, the commitments made in line with current NDCs fall far short of limiting global temperature increases to 2°C above pre-industrial levels, let alone 1.5°C. By 2030, under current policies, the gap in annual emissions compared with a 2°C least-cost pathway will have reached 14–17.5 GtCO₂, equivalent to nearly half of current energy sector emissions.
This research paper highlights the risks and likely impacts if the goals set under the Paris Agreement are not met, and the world follows an emissions pathway consistent with recent historical trends. Simply updating – i.e. without significantly enhancing – NDCs will not guarantee the Paris Agreement goals are met; nor will enhanced pledges without swift and decisive delivery of those pledges. The governments of highly emitting countries have an opportunity to accelerate emissions reductions through ambitious revisions of their NDCs, significantly enhancing policy delivery mechanisms, and incentivizing rapid large-scale investment in low-carbon technologies. This will lead to cheaper energy and avert the worst climate impacts.
The COVID-19 pandemic has underscored the interconnections and interdependences between nations, as well as the potential for cascading sectoral impacts with far-reaching consequences for society. This shows, too, the critical need to consider whether existing systems are sufficiently resilient, not only to domestic sectoral shocks but to global adverse trends and events. Climate change is among the greatest such risks.
Risk assessments are a critical tool in enabling decision-makers to allocate appropriate resources, within finite budgets, to the various challenges society faces. Climate change risks are increasing over time, and what might be a small risk in the near term could embody overwhelming impacts in the medium to long term. Risks can be defined by a probability of occurrence and severity of impact; climate risks are no different. This paper presents high-probability, high-impact climate risks as well as low-probability, high-impact climate risks, recognizing that a low-probability outcome may still correspond to a high risk if the impact is severe. Many of the impacts described are likely to be locked in by 2040, and become so severe they go beyond the limits of what many countries can adapt to.
The paper examines emissions risks, and the most significant direct and systemic risks in terms of societal impact, drawing on recent research of impact indicators. The assessment presents central estimates as well as plausible worst-case scenario impacts (see Box 1). A global emissions trajectory represents emissions risks (Chapter 2), under which direct risks are assessed (Chapter 3). Systemic cascading climate risks have been assessed via an expert elicitation process involving 70 climate scientists and sector risk experts (Chapter 4). It is these systemic cascading risks that are in general less well documented, principally as they emerge from the interdependences between various complex systems and as such require input from experts in multiple disciplines. For example, the 2007–08 and 2010–11 global food price spikes arose from relatively modest climate impacts interacting with other factors (e.g. biofuel policy diverting grain to ethanol, low stock transparency) that created a run on grain markets, leading to implementation of export bans and thus further amplifying the price shocks. The expert contributions that have informed this paper aim to go some way in addressing the gap in documenting cascading risks.
The paper builds on two previous phases of risk assessments, and the guiding principle continues to be to ensure transparency regarding what we know, what we don’t know, and what we think, when assessing climate risks.
This paper does not attempt to quantify transition risks; nor is its purpose to provide recommendations as to the climate mitigation policies that countries could implement to minimize the risks arising from climate change. This follows the principles of the previous phases of risk assessments, whereby best practice is to separate risk assessments and risk management strategies.