Discussion Paper

Climate change and the need for global action

Chapter 2.1

Greenhouse gases occur naturally and are essential to the survival of humans and millions of other living organisms, by keeping some of the sun’s warmth from reflecting back into space and making the Earth liveable. But after more than a century and a half of industrialisation, deforestation, and large scale agriculture, quantities of greenhouse gases in the atmosphere have risen to record levels not seen in three million years. As populations, economies and standards of living grow, so does the cumulative level of greenhouse gases (GHGs) emissions. (United Nations, 2019)

Human activities are changing the natural greenhouse on earth. Over the last century the burning of fossil fuels like coal, oil and gas has increased the concentration of atmospheric carbon dioxide (CO2). This happens because the fossil fuel (coal/oil/gas) burning process combines carbon with oxygen in the air to make CO2. To a lesser extent, the clearing of land for agriculture, industry, and other human activities has also increased concentrations of greenhouse gases. (National Aeronautics and Space Administration, 2019)

A global perspective is needed to address climate change (Stocker et al., 2013, p. 15).

No country can fight it effectively on its own.  Efforts must involve civil society, and existing stakeholders must be won over to effectively involve industries and sectors such as infrastructure, technical equipment, current applications as well as, financial resources. The focus should be on business opportunities on the one hand and on realistic transformation paths for existing applications on the other.

There are some basic well-established scientific links (United Nations, 2019):

  • The concentration of GHGs in the earth’s atmosphere is directly linked to the average global temperature on Earth;
  • The concentration has been rising steadily, and mean global temperatures along with it, since the time of the Industrial Revolution;
  • The most abundant GHG, accounting for about two-thirds of GHGs, is carbon dioxide (CO2) and is largely the product of burning fossil fuels.

Climate targets for the reduction of GHG emissions

In its Fifth Assessment Report, the Intergovernmental Panel on Climate Change (IPCC), a group of 1,300 independent scientific experts from countries all over the world under the auspices of the United Nations, concluded there's a more than a 95 percent probability that human activities over the past 50 years have warmed our planet. The industrial activities that our modern civilisation depends upon have raised atmospheric carbon dioxide levels from 280 parts per million to 400 parts per million in the last 150 years. The panel also concluded there's a better than 95 percent probability that human-produced greenhouse gases such as carbon dioxide, methane and nitrous oxide have caused much of the observed increase in the Earth's temperatures over the past 50 years (National Aeronautics and Space Administration, 2019).

At the United Nations Framework Convention on Climate Change 21st Conference of the Parties (COP 21) 2015 in Paris, the international community set itself the common goal of limiting global warming to 2 degrees Celsius. After three years of negotiations, the international community agreed in December 2018 in Katowice at COP 24 on common rules for the implementation of the Paris Climate Convention.

Estimated Global mean surface temperature change relative to 1986-2005 for different IPCC scenarios Picture: Prather et al., 2013

For the first time, from 2024 there will be common binding minimum standards for reporting by states on their greenhouse gas emissions or other climate-protection measures. It is already foreseeable that the current climate targets of the states will not be sufficient to limit global warming to well below 2°C and, if possible, to 1.5°C. The climate change is also likely to be a major factor in the future. Without further efforts, the global temperature will rise by more than 3°C by 2030.

The Emissions Gap Report 2018 by the United Nations Environment Programme therefore calls for a tripling of global climate efforts to meet the 2°C target. In order to limit global warming to 1.5°C, a fivefold increase in efforts was even necessary (United Nations Environment Programme (UNEP), 2018, p. 4).

2017 World's Largest-10 Carbon-Emitting Countries Picture: Based on EU EDGAR Database (Joint Research Centre (European Commission), 2018)

National governments around the world have committed to highly ambitious goals to reduce greenhouse gases in the years to come. For instance, The Federal German Government has set the goal to reduce GHG emissions by 80% to 95% by 2050 compared to 1990s levels.  Reaching this goal, entails a massive change in the supply and utilisation of energy as we know it today.  It is important that countries coordinate with each other in order to achieve the common goal of effectively limiting global warming.

Through international climate protection agreements such as COP 24, the community of countries will work more closely together on climate protection in the future: Industrialised countries, which have contributed significantly to CO2 emissions in recent decades, will cooperate closely with developing countries. This applies in particular to the development of reporting systems - but also to the transfer of know-how for effective climate protection.

Climate change mitigation as part of corporate risk management and strategy development

Climate change is one of the highest-impact risk to business and presents major implications both inside individual companies and across the full supply chain (Global Future Council on Energy, 2018). Impacts of climate change can both endanger key business functions in short term as well as endanger the complete business model in medium/long term. Effective measures are therefore needed by businesses in order to reduce GHG emissions from operations, products and services.

On the one hand, companies are emitters of greenhouse gases as part of their value chain. On the other hand, companies play a central role in combating climate change as a source of finance and driver of innovation and technological development. Without companies, climate targets will not be achieved. The challenge of climate change presents both wide-ranging threats and opportunities for the private sector. The immediate effects of climate change are already threatening the viability of existing business practices in agriculture, infrastructure, and construction. But climate change also opens up opportunities (Henderson, Reinert, Dekhtyar, & Migdal, 2017).

But companies cannot do it alone. Governments are called upon to promote policies that safeguard competitiveness, economic growth and employment. They ought to enable companies to use their innovative capabilities to protect the climate and make the transition to a sustainable global economy possible.

Consumers are increasingly interested in products based on renewable raw materials that they perceive as healthier, more natural and having a positive environmental impact. Many brand owners and retailers are therefore seeking to position themselves accordingly by defining strategies and goals for using renewable raw materials. In Europe, for instance, the use of renewable resources is also being driven by the European Commission’s measures to cut CO2  emissions and to support the bio-economy; similar programs exist in other regions (BASF United States, 2019).

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