On March 20th the UN Intergovernmental Panel on Climate Change (IPCC) released a synthesis report (SYR) summarising the results of its three working group reports and two special reports released within the past year. The SYR concludes that greenhouse gas emissions need to fall by 43% by 2030 compared with 2019 levels for the global temperature rise to stay within the agreed 1.5°C target.

The report confirms that the world is on course to exceed the 1.5°C target in the first half of the 2030s unless definitive and far-reaching steps are taken immediately. Otherwise, even limiting global warming to below 2°C will be a challenge. Human-induced climate change has made the world 1.1°C warmer than it was in the second half of the 19th century and disproportionately affected emerging-market countries. In the event of overshooting the 1.5°C target, there will be an irreversible impact on polar and coastal ecosystems, but the damage can be limited by “deep, rapid, sustained and in most cases immediate global greenhouse gas emissions reduction”.

The SYR observes that the adverse effects of human-induced climate change will continue to intensify, leading to crop loss, a decline in fisheries and a deterioration in human health. It will also cause more floods, forest fires, droughts, species extinction, infrastructure damage and human displacement.

The report makes a number of suggestions to limit further warming: reducing ecosystem conversions, minimising food and water wastage, and utilising more solar and wind power. However, on their own, these will do little to address the situation, and the SYR acknowledges that they will need to be accompanied by a substantial reduction in fossil fuel use, which we think is unlikely in the short term.

The scale of the required decline in greenhouse gas emissions is immense. Emissions declined by just 6% in 2020, owing to covid-19 lockdowns, but this still represented the largest absolute drop in history. In order to reach the 43% target by 2030, emissions will have to drop every year by more than they declined in 2020.

We expect modest acceleration in the adoption of renewables and electric vehicles, particularly in advanced economies as more public money is made available. However, we expect global consumption of fossil fuels to increase in 2023-24 as most countries continue to prioritise energy security. This makes it highly unlikely that a 43% reduction in greenhouse gas emissions will be achieved by 2030. In the years ahead increasingly erratic weather and global warming will adversely affect harvests, with major implications for agricultural commodity prices and food security, and greater public spending on measures for adapting to climate change.

The analysis and forecasts featured in this piece can be found in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, helping organisations identify prospective opportunities and potential risks.