What the new IPCC report means for big energy users
The new report from the Intergovernmental Panel on Climate Change (IPCC) is a wake-up call to the world. We look at what it could mean for the future of energy intensive industries.
Authored by a group of 234 scientists from 66 countries, the latest IPCC report warns that we have very little time to deliver the emission cuts we need to prevent the worst impacts of climate change.
This comes just months before the COP26 climate conference is set to take place in Glasgow. Consequently, the report is predicted to play a significant role in shaping future policy – much like the IPCC’s last report influenced the Paris Agreement.
This could mean radical change for energy intensive industries over the next decade. Given the urgency indicated in the report, businesses should prepare for this sooner rather than later.
Expect a rise in climate-related risk factors
In the UK’s 2020 Roadmap and Interim report, the government announced its intention to make the TCFD-aligned disclosures mandatory across the economy. This will mean accounting for any business risks related to global warming, including threats posed by extreme weather events.
Over the past decade, we have seen a rise in destructive wildfires, devastating heat waves and flooding on a massive scale. This is already impacting business supply chains, transportation and employee health and safety. In this new report, the IPCC draws a definitive link between global warming and the frequency and intensity of these events. This means that as temperatures continue to climb, these calamities will only worsen, putting businesses at further risk.
The report also indicates that even with the required emission reductions, it could take two to three decades for global temperatures to stabilize. This means that, at least for the moment, extreme weather events must be planned for in the long term.
That the disclosure of these climate-related risks will become mandatory for UK businesses is indisputable. But, it is just as important to mitigate these risks as much as possible now.
Net zero targets will become more important than ever
The IPCC report has been referred to as a “wake-up call”, and this could mean a radical overhaul of energy intensive industries. As the UK government ramps up its decarbonisation efforts, large companies will be expected to follow suit. This means setting ambitious net zero targets.
For big energy users, the route to net zero will not be straightforward. Yet, there are many advantages to becoming a net zero or carbon negative organisation. For one thing, it puts you ahead of the curve when it comes to compliance with carbon legislation. It can also maintain your competitiveness in an increasingly green marketplace (both investors and consumers alike).
Perhaps most importantly, especially in a time of economic recovery, reducing your waste and embracing resource efficiency lays a clear path to financial stability. This circular economy approach is considered key to creating a thriving, net zero future.
Carbon offsetting won’t be enough
Many big energy users have turned to carbon offsetting to reach their emission reduction targets. However, the IPCC report states that the oceans and forests that once served as a buffer by absorbing CO2 will become less effective, if emissions continue to rise at the current rate. This means that while it is still crucial to develop reforestation and conservation projects, they are not silver bullets.
Instead, companies will be pushed to reduce their emissions as much as possible before turning to offsets solely as a last resort. In this effort, clean energy methods such as green procurement, onsite generation and energy efficiency will play a large role. Responsible waste management, low-carbon transportation and sustainable product design will also be crucial.
We are running out of time
If there is one key takeaway from this new IPCC report, it is the urgency of our state of affairs. Over the last century, temperatures have risen to 1.1°C above pre-industrial levels. If it continues at this rate, the global temperature is projected to increase by more than 1.5°C between 2030 and 2052. This means that the pathway laid out in the Paris Agreement is slipping out of reach.
The promising news is that scientists now have a better idea of what will work. With more accurate projections and a clearer picture of what the future holds if temperatures continue to rise, we are better equipped to drive change. But this change needs to happen now.
How can EIC help?
Our comprehensive energy and carbon services help guide organisations towards a more sustainable future. We can provide a bespoke, adaptable roadmap to net zero for your organisation – ensuring carbon compliance and long-term financial stability along the way. Our extensive energy management services cover everything from metering and monitoring to controls and carbon footprinting.
Our goal is to help companies navigate the transition to a net zero economy. We recognise that while larger policy decisions will drive nationwide decarbonisation, every business will play an important part.
To learn more about our net zero and sustainability services, contact us at EIC today.
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