In an Expert Focus article for Waterbriefing, Jonathan Grant, Sustainability & Climate Change Director at PwC, explores some of the key issues surrounding the Intergovernmental Panel on Climate Change newly-published Synthesis Report in the run-up to the Paris climate summit.

The IPCC published the Synthesis Report (SYR) of the Fifth Assessment Report (AR5) on the 2^nd November. This final section of the landmark report integrates the key points from the three working group reports released over the last year. The main messages in the Synthesis Report are bold and plain, even if familiar to many. Warming is unequivocal; human influence on the climate system is clear; climate change will amplify risks and threaten poverty reduction. Action to reduce emissions will slow economic growth by a mere 0.06% annually. Without it, average warming of 3.7-4.8°C is expected by 2100 bringing severe, irreversible impacts on natural systems and societies.

The Synthesis Report is possibly the most important climate report published this decade. By catalysing action at the domestic and international level, particularly in Paris late next year, it is likely to have far-reaching implications.

Emphasis and nuances

The SYR has two sections, a Summary for Policy Makers and a longer report. So what’s in, what’s not and what’s been emphasised is significant as this is endorsed by all governments and will be most widely read. 

The report starts with blunt statements about the science: warming is unequivocal and our influence is clear. In other words climate change is not a matter of belief. It then outlines current and potential future impacts of climate change, taking care to explain which impacts are universally negative, and which are more ambiguous. Putting it mildly, it notes that there are five ‘reasons for concern’ each of which suggests impacts that are large and potentially irreversible, and costs that are significant. These include threats to unique systems such as coral reefs, extreme weather and large-scale singular events like the disintegration of the western Antarctic ice sheet which would raise sea level by 5 metres.

The Synthesis Report is more than a copy-and-paste job, as the name suggests. The IPCC can also reach new conclusions by drawing together the findings from the three previous reports. In particular, it highlights how climate change amplifies other risks and can even aggravate the risk of conflict and migration. It also emphasises the interaction between approaches to mitigation and adaptation, looking at how each complements the other rather than being substitutes in any decision-making process.

The economic case

While the report is clear about the science, it isn’t about the economics. A comparison is made between the costs of climate change impacts versus the costs of taking action. At the high level, the SYR makes the point that mitigation will be costly, but relatively low compared with the potentially high costs of impacts. It also notes that adaptation on its own is insufficient.

But it has not synthesised the numbers.The SYR re-iterated the Working Group 3 findings that limiting warming to below 2^oC would entail a (median of) 0.06 percentage points annual reduction in global consumption growth. This compares against projected growth of 1.6 – 3% a year in the baseline scenario. (This means if global consumption would have grown by 2% a year, it would grow instead at 1.94% a year when carbon mitigation costs are taken into account.) But the Synthesis Report does not compare the cost of impacts or of adaptation against economic growth in the way the cost of mitigation is. And the assumption in the baseline of long term growth of 1.6 – 3%, without mitigation, doesn’t seem plausible or consistent with the ‘severe, widespread and irreversible impacts’ of a 4° world.

There are other nuances in the Synthesis Report. While the 2°C carbon budget is highlighted in the summary, the contrast with the amount of carbon in fossil fuel reserves is stranded in the longer version. The reserves are 4 to 7 times larger than the budget, but this point is omitted in the summary meaning that the ‘unburnable carbon’ argument doesn’t get such a high profile among busy policymakers. CCS is mentioned in the summary which shows the higher cost of mitigation without it, but its importance as a mitigation technology is only described in detail in the longer report.  

Perhaps the least satisfying aspect of the report is that global averages disguise the real local impact of the problem. Temperature change in some regions is expected to be much greater than average. Impacts on the poorest sections of all societies and poorest countries will be more significant than average. Even the cost of mitigation is likely to be much higher for some countries (the fossil fuel exporters) than the global average. Those interested in the regional variation can refer to the CDKN AR5 toolkit to understand impacts on Africa, South Asia and Small Island Developing States (SIDS).

The SPM ends with a strong emphasis that co-ordinated and ambitious action at the international, regional and national levels is required to tackle climate change. Whether policymakers will heed this advice will become clearer at the UN Climate Summit in Paris in December 2015. 

Relevance for business

The Synthesis Report is likely to raise awareness and catalyse action on emissions and resilience in the business community. Weather or climate-sensitive businesses – from food and water to energy and infrastructure sectors – are unlikely to need a reminder of climate risks. But the discussion on the interaction between mitigation and adaptation is particularly relevant for business. This includes synergies with other objectives such as sustainable business development, resilience in supply chains, disaster risk reduction, co-benefits of mitigation solutions, and interactions with local communities. The broad message is that integrated and holistic thinking is required when business leaders make their decisions.

As would be expected the IPCC emphasised that emissions reduction is essential across every sector and geography. But in addition to consumption of fossil fuels, emissions from cement production and flaring get a specific mention. As a notable source of emissions, the cement sector and flaring are likely to be a particular focus for effort to reduce emissions.  Key producing countries for coal and oil were also considered to be at risks of losing trade revenues under stringent mitigation policies, especially in the absence of CCS deployment. The role of financial institutions and the insurance sector is also discussed. They need to meet the investment need of low carbon technology development and deployment and can manage and transfer climate risks.

The IPCC’s Summary for Policy Makers was not aimed directly at businesses, as its title suggests. But the implications for businesses are stark. Companies that made pledges at the New York climate summit in September, are not debating the science, but are now asking hard questions about how to tackle the climate challenge.    

Implications for Paris 2015

The IPCC SYR report tends to summarise and generalise issues at the global level, leaving few specifics for local and national government planners. There is some discussion of different types of mitigation policies – for example an explicit mention of carbon pricing as a cost-effective mechanism. Perhaps the most important advice in the report is on the need to link decision making on adaptation and mitigation responses. Both require technology development and deployment, both require finance, and both will require effective institutions and governance. There are also important synergies with other sustainable development goals (SDGs), so co-benefits and trade-offs need to be considered.

The Synthesis report is essential reading for negotiators heading to the next climate summits in Lima and Paris. Countries preparing emissions targets as part of the pledges they make in the lead up to the Paris summit, need to understand whether their goals are aligned with the 2^oC carbon budget. National circumstances will no doubt drive which end of the spectrum these goals will be. But it is clear that the IPCC report sets the stage for the climate negotiations over the next 13 months.  How the leading actors respond will determine whether Paris is a success or failure.

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