WORKWEEK

Firstly, if you’re a bit confused about all the different IPCC reports, you’re not alone. There was a highly covered IPCC report release last year. And another earlier this year already. And now there’s a third one!

Aren’t IPCC reports released on a 6-7 year cycle? Why have there been three in the past year? 

The answer is that the overarching IPCC Assessment report is split into three ‘special reports’. Today’s release is the third installment, all of which together constitute the IPCC’s Sixth Assessment Report (AR6):

1. Focus on the ‘physical science’ (here)
2. Understanding impacts, adaptation, and vulnerability (here)
3. Mitigation of Climate Change: the latest assessment of the progress the world is making (or not making), and pathways to decarbonization (here)

These three special reports will then be synthesized in Q3 of this year into a ‘Synthesis Report on Climate Change’ (see here).

With each release, the media headlines look the same; they offer some version of “the IPCC says we’re running out of time.” Which is true. More on that later.

Still, the IPCC’s own press release led with a more bold, almost optimistic claim: 

We can halve emissions by 2030… there is increasing evidence of climate action.

Let’s dig deeper 👇

THE EMISSIONS TRAJECTORY 

As with the other reports in this sixth IPCC assessment, the paper underscores a familiar refrain: the world isn’t making enough progress to mitigate climate change. 

Curtailing global warming to 1.5° Celsius is a key and oft cited target that came out of the 2015 Paris Accord. For context, human activities have already caused more than 1°C of global warming (almost 2° F) since the Industrial Revolution.

To not exceed the 1.5 target, the latest IPCC report establishes that global greenhouse gas emissions would need to peak in 2025. That’s, *checks calendar*, very soon.

Where are we at so far? Well, one key finding from the report is that while emissions were higher in 2010-2019 than any other decade since the dawn of civilization: 

… the rate of growth between 2010 and 2019 was lower than that between 2000 and 2009.

Specifically, emissions growth declined from 2.4% in 2000-2010 to 1.3% for 2010-2019.

Again, for emissions to peak in 2025 and for the 1.5° C target to remain tenable, the rate of change in the current decade will need to be ~0%, or already dip negative. 

As we’ve explored often in this newsletter, all emissions aren’t made equal, however. Another call-out from the report focuses on methane, CH4:

…methane has a disproportionate impact on near-term temperature, and is estimated to account for almost a third of the warming observed to date…

If methane emission has driven up to a third of all warming to-date, that means eliminating methane emissions could help with an equally large deceleration in global warming. What do solutions on that front look like? Well, look no further than two of our previous deep dives:

• Crusoe Energy – eliminating and valorizing flare gas emissions
• Mootral – cutting methane gas emissions from cows 

What are the single biggest drivers of emission growth globally? The IPCC report identifies predictable macro factors:

Globally, GDP per capita and population growth remained the strongest drivers of CO2 emissions 22 from fossil fuel combustion in the last decade…

GDP and population growth aren’t going anywhere. But this doesn’t make people who emphasize ‘de-growth’ as the only solution for climate change right.
What it does identify is one of climate tech’s core purposes, namely to decouple GDP and population growth from emissions growth.

CLIMATE TECH SOLUTIONS & MITIGATION

Now, on to what I imagine many of you will be most excited about. The report’s focus on climate technologies and their potential contributions to reducing and reversing climate change.

Let’s start with one of my favorite charts across the board. The below illustrates the potential emission reduction potential of various technologies by 2030. E.g. in the first line wind energy is charted as offering up to ~5+ gigatonnes of annual emissions reduction potential in the most ‘bullish’ scenarios.

Check out page 50 to peruse this chart in greater detail yourself

If your eyes glossed over that chart, if you totaled up all the emissions reduction potential, you’d see why the press release led with “We can halve emissions by 2030.” Compared against ~50B tonnes of annual greenhouse gas emissions, even cherry picking the 5-10 most impactful technologies here and implementing them at scale would make a significant dent in emissions.

Speaking of scale, the report also did a good job of reminding us of how much progress has been made with respect to technologies that have seen considerable investment and development in past decades:

Most striking, the cost of solar PV has fallen by a factor of 5-10 in the decade since the IPCC Special Report on Renewable Energy (IPCC 2011a)

Those are absolutely incredible adoption curves – you love to see it

This is a great example of what’s possible in other climate tech verticals. The report went on to discuss a number of illustrative technologies and verticals that are earlier on the development curve but show significant promise. Here are a few illustrative examples that stood out to me:

• Transport: “…[Electric vehicles] powered by low emissions electricity offer the largest decarbonisation potential for land-based transport, on a life cycle basis (high confidence). Sustainable biofuels can offer additional mitigation benefits in land-based transport in the short and medium term (medium confidence).”
• Hydrogen: “Hydrogen direct reduction for primary steelmaking is near-commercial in some regions.”
• Carbon capture & removal: “The deployment of CDR to counterbalance hard-to-abate residual emissions is unavoidable if net zero CO2 or GHG emissions are to be achieved.”

Other technologies, while critically important, will take longer to develop:

Until new chemistries are mastered, deep reduction of cement process emissions will rely on already commercialised cementitious material substitution…

Another noteworthy section on the tech front was the report’s focus on urban centers as significant opportunities for decarbonization. Whether that’s enhancing carbon storage within the urban environment (e.g. sequestering carbon emissions in cement) or reducing / changing energy consumption habits, the world is and will continue to become a lot more urban. Cities will need to be epicenters of climate tech innovation and deployment.

BEYOND CLIMATE TECH

While climate tech is my purview, mitigating climate change will require a mosaic of policy, technology, behavioral change, ethics, and more. Again, from the report:

The interaction between politics, economics and power relationships is central to explaining why broad commitments do not always translate to urgent action.

And of course, all of these other factors also inform how much capital flows into tech and whether and which necessary policies act as tailwinds for tech needed to decarbonize.

One example? Consider carbon markets and carbon removal and storage technologies. The report opines: 

Policy has been and will be central not only because greenhouse gas emissions are almost universally under priced in market economies…

This is a good example of how policy impacts technologies. If ‘prices’ associated with greenhouse gas emissions rise (becoming less ‘under priced’), technologies that remove or abate emissions directly will become more economically viable more quickly. 

To be sure, a lot of global GHGs are already governed by some policies: 

By 2020, over 20% of global GHG emissions were covered by carbon taxes or emissions trading systems, although coverage and prices have been insufficient to achieve deep reductions…

People talk a lot about how carbon taxes and emissions caps would be massively impactful for driving decarbonization. And I agree. The above lays bare however that many of the schemes in place now aren’t sufficiently effective… since they’re not driving real reductions. 

I made a similar note to self when taking stock of what the IPCC report reveals about global ‘net zero commitments: 

Growing numbers of countries have adopted ‘net zero’ CO2 and/or GHG emission goals and decarbonisation or low carbon growth strategies, but the current NDCs to 2030 collectively would barely reduce global emissions below present levels…

File that under the ‘not good enough’ category, too. Largely because the targets are so far out in the future (e.g. 2050 and 2060) that they won’t help ensure emissions peak in 2025, which we established as important to maintain a solid emissions trajectory earlier in this newsletter. 

All that said, there are bright spots. The report noted:

At least 18 countries have sustained GHG emission reductions for longer than 10 years.

This is evidence that everything we’re talking about in concept, i.e. reversing emissions growth and turning it into sustained reductions, is possible. Do these 18 countries include places like China and India with massive population growth and parallel economic development? 

No. But 18 examples are better than 0. 

One more important component in the report that crops up is a conversation around equity. 

For instance, inequality isn’t just about income. It’s about emissions and responsibility for global warming, too:

The 10% of households with the highest per capita emissions contribute a disproportionately large share of global household GHG emissions…

Specifically: 

The global wealthiest 10% contribute about 36-45% of global GHG emissions

The goal remains getting to zero emissions globally as soon as possible. But the brunt of the near-term burden of who should be required to get there faster is a challenging question. 

As is written in the report in another section that explores concerns over equity: 

…This literature emphasises the need for less developed countries to have sufficient room for development while addressing climate change…

Said differently? Burning cheap fossil fuels = a great way to drive economic growth and development. If less developed nations haven’t contributed significantly to the emissions that already got us to 1.1° Celsius of global warming, should they be expected to decarbonize as fast and immediately as the U.S. or the U.K.? 

Plus, what happens when developed countries’ examples aren’t setting a sterling example?