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Reto KnuttiInstitute for Atmospheric and Climate ScienceETH [email protected]
Climate changeWhy the financial sector should care
Diagnosis«Warming is unequivocal»
NASA GISS, https://data.giss.nasa.gov/gistemp/graphs/
Diagnosis«Warming is unequivocal»
Diagnosis«Warming is unequivocal»
Causes«Human influence on the climate system is clear»
Photo: J. Flückiger
Methane and CO2at record levels
IPCC 2007
800’000 years before present today
Methane
CO2
OptionsIgnore, adapt, mitigate
ProjectionsWhich scenario should we pick?
IPCC WG1 SPM Fig. SPM.7
ProjectionsEurope in a high emission scenario
CH2011
Hot days and heavy precipitationTrends in Switzerland
Sonntagszeitung, Juli 2015
The 2°C targetHow do we distribute the CO2 budget?
[Gt CO2/Jahr]
as usual
CO2 emissionsWe select the pathway to 2°C
[Gt CO2/Jahr]
as ususal
2010
CO2 emissionsWe select the pathway to 2°C
[Gt CO2/Jahr]
2010 2030
CO2 emissionsWe select the pathway to 2°C
as usual
Climate change and mitigationThe risks are real
Inland emissions50 mio. t CO2eq/a
International air travel (from CH)10 mio. t CO2eq/a
grey GHG emissions (import)110 mio. t CO2eq/a
grey GHG emissions (export)55 mio. t CO2eq/a
operations of CH export goods ?? (machinery only: 12 mio. t CO2eq/a)
direct investments270 mio. t CO2eq/a
portfolio investments(incl. pension funds)230 mio. t CO2eq/a
Swiss financial marketplace1’100 Mio. t CO2eq/a
If the Swiss fin. market were a country,it would rank as the 6th largest global emitter
Source: Klima-Masterplan Schweiz, Umweltallianz, https://www.wwf.ch/sites/default/files/doc-2017-09/2016-05-Studie-Klima-Masterplan-Klima-Allianz.pdf
In the last 30 yrs the fossil to global energycontribution has decreased from 88% to 83%
Global coal demand Solar Photovoltaics installed capacity [GW]
Task Force onClimate-related Financial Disclosures
https://www.fsb-tcfd.org
To promote more informed investment, credit and insurance underwriting decisions
To enable stakeholders to understand better the concentration of carbon-related assets in the financial sector and the financial system’s exposures to climate-related risks
Either we get the transition risksor the physical risks, or both
https://www.fsb-tcfd.org
Transition risks
Price on CO2 emissions Climate litigation Shifts in markets Shifts in consumer behavior Stranded assets
Physical risks
Risk of extreme weather Rise in sea level
Effect of strengthening resiliencetypically reduces risk by 40-60% by 2030
Risk today
Development
Climate change
Risk todayAdditional risk due to economic developmentAdditional risk due to climate change
Remaining risk manageable e.g. preserve transferability of risk
Remaining risk
2030
Risk reduction due to cost-effective resiliency measures
Economics of Climate Adaptation, SwissRE
