Investor Insight Climate Science Insight: New study highlights colossal risks of pushing the planet beyond 1.5 °C warming

Dr Dimitri Lafleur, ACCR Chief Scientist

Humanity is rapidly pushing the Earth system away from the stable state of the past 12,000 years, the only state we know is capable of supporting life as we know it, introducing rapid changes that “undermine critical life-support systems”.

This is the dire sounding introduction to a new study by Johan Rockström and his co-authors, just published in Nature. But it is warranted: it concurs with recent research that found more than half the earth’s population has seen unprecedented record high temperatures in the past 10 years, with the assessment that statistically implausible heat can now “occur anywhere at anytime”, and with the deeply concerning decline of the water circulation system around Antarctica over the past 3 decades and towards 2050 leading to enormous impacts on oxygen, nutrient and carbon flows that could last for centuries.

Fourteen years ago Rockström and co-authors published the principles of planetary boundaries: a way of defining a safe operating space for humanity and identifying the thresholds that, once crossed, could lead to disastrous consequences for life as we know it. Last week, an update to those principles highlighted that seven of eight Earth system boundaries have been breached at a global level, with 86% of the world's population feeling the impacts of at least two boundaries being breached.

The Earth system boundaries (ESBs) cover climate, the biosphere, fresh water, nutrients and air pollution; selected because they span the major components of the Earth system (air, water, ice, rock and natural environments) and their interlinked processes (carbon, water and nutrient-cycles) that are foundational to planet’s life-support systems.

Safe and just Earth system boundaries.

This latest research measures the impacts on people in the same units as planetary stability: The “safe” limit allows the planet to maintain resilience; the “just” limit preserves safety for people. Almost all the “safe and just” ESB’s have been breached.

Visualisation of safe and just Earth System Boundaries; “safe” Earth System Boundaries (solid black line), “just” Earth System Boundaries (dashed black line), safe and just space in green and where the planet currently sits relative to those limits (black dots), credit: The Earth Commission

Lets focus on what the study says about climate.^[1]

The safe ESB for warming - which the planet has not yet crossed - is based on minimising the likelihood of triggering climate “tipping-points”, like Amazon dieback, the abrupt thawing of boreal permafrost and the collapse of the Greenland ice sheet. The study says that global warming exceeding 1.0°C above pre-industrial levels, which has already occurred, carries a “moderate likelihood” of triggering such events, but above 1.5°C or 2°C it would increase to “high” or “very high” respectively. The authors conclude that; “stabilising at or below a safe ESB of 1.5°C warming avoids the most severe climate impacts on humans and other species, reinforcing the 1.5°C guardrail set in the Paris Agreement on Climate Change.”

However, given the significant harm to people from climate change, the study imposes a stricter just boundary, which has already been crossed. It notes that tens of millions of people have already been exposed to wet bulb temperature extremes, and that “past emissions have already led to significant harm, including extreme weather events, loss of habitat by Indigenous communities in the Arctic, loss of land area by low-lying states and sea-level rise or reduced groundwater recharge from changing glacial melt systems.”

The study says that “at 1.5°C warming, more than 200 million people, disproportionately those already vulnerable, poor and marginalised (intragenerational injustice), could be exposed to unprecedented mean annual temperatures, and more than 500 million could be exposed to long-term sea-level rise.” The authors warn that these numbers undermine most of the Sustainable Development Goals, and the numbers of people harmed “vastly exceed” the widely accepted principle of 'leave no one behind'.

What does this all mean for institutional investors who understand the importance of science in their stewardship activities?

Firstly, it is a stark reminder that the aim to limit global warming to 1.5°C above pre-industrial levels is not a hypothetical threshold agreed through political negotiations. The living conditions of hundreds of millions of people will be negatively affected by climate change. Notably, some of the worst impacts will be felt in the developing world - the same places some companies are targeting an increase in fossil fuel supply.

The second point to make is that few investments will be secure on an unstable planet. Stock- picking your way to a “safe” portfolio in the face of a collapsing planetary life-support system will be futile. Forceful stewardship over the next decade will be critical if we are going to have any chance at protecting retirement savings from the risks of breaching our planetary boundaries. The focus must be on absolute emissions reduction; divestment of assets does not address the underlying problem. Companies are not moving fast enough to cut real world emissions - thus escalating the future systemic risks for all investment portfolios.

As an added note, this study defines “significant harm” - which occurs once planetary boundaries are crossed - as “widespread severe existential” impacts on countries, communities and individuals. This choice of words should evoke deep concern with the reader: scientists will argue for existential risks based on scientific data only if there is a clear case to be made. In terms of climate change, vulnerable communities and their cultures and languages will face these existential risks first (e.g. Pacific Islands, Arctic communities e). Other scholars, such as philosopher Kieran Setiya have argued that climate change can accelerate the rise of anti-democratic movements and migrant crises, essentially anywhere. While a 4°C warming world is considered unlikely at this stage, it is likely that climate change at 1.5°C or more will disrupt cultures and societies that may prove to be an existential risk.

References:

Rockström, J., Gupta, J., Qin, D. et al., 2023, https://doi.org/10.1038/s41586-023-06083-8

Thompson, V., Mitchell, D., Hegerl, G.C. et al., 2023, https://doi.org/10.1038/s41467-023-37554-1

Li, Q., England, M.H., Hogg, A.M. et al., 2023, https://doi.org/10.1038/s41586-023-05762-w

Rockström, J., Steffen, W., Noone, K. et al., 2009, https://doi.org/10.1038/461472a