IPCC Climate Report: An Urgent Call to Action
How Carbon Credits Play A Role in Meeting the Climate Change Crisis
The most recent Intergovernmental Panel on Climate Change (IPCC) report tightened the timeline to address global climate change by twelve years. The report has a clear message — unless there are significant steps taken before 2030, climate change will adversely affect the global economy, politics and quality of life. The public is looking to business leaders to respond to climate change and corporations can play a significant role in reducing greenhouse emissions by participating in the carbon credit markets.
The IPCC had previously calculated that the “point of no return” (a 1.5° Celsius increase in global temperatures) for earth would not arrive until after 2040. The latest report, released on October 8, advanced that date to as early as 2030.
Here are some recent data points that bolster the analysis behind that advanced deadline:
- Nine of the ten warmest years on record have been since 2000
- Every decade since 1970 has been warmer than the previous one
- There have been increased numbers of major storms (hurricanes, typhoons, tornados, flooding etc.). These result in higher insurance claims and premiums.
- Arctic and Antarctic ice has been melting at ever quicker rates. Miami is already experiencing regular flooding as a result of rising sea levels.
- Droughts are occurring in many regions. NY Times columnist and author Thomas Friedman attributes the rise of ISIS to a drought in Syria. California has had record numbers of wildfires that have increased in intensity and size over the past decade.
If the atmosphere warms up to 1.5 degrees Celsius (2.7 degrees Fahrenheit) by 2030, the IPCC report predicts irrevocable damage could occur, including severe food shortages, coastal inundations and the displacement of tens of millions of people. If the planet keeps warming to 2 degrees Celsius (3.6 degrees Fahrenheit), the effects could include devastating floods and droughts and the permanent loss of the world’s coral reefs.1 Clearly, there are major political, social and economic impacts from these changes and this must be of direct concern to the business community.
Investopedia defines a carbon credit as a “ permit or certificate allowing the holder to emit carbon dioxide or other greenhouse gases. The credit limits the emission to a mass equal to one ton of carbon dioxide. The issuance of carbon credits aims to reduce the emission of greenhouse gases into the atmosphere.”2 With the credits, companies have the flexibility to adjust their emission levels in the near term while planning for cleaner technologies in longer term. The carbon credit markets also allow companies to pair up with companies or projects that can use the credits for environmental remediation in other regions.
Globally, the World Bank estimates the size of the carbon market in 2017 at $33 billion, up 50% from the previous year. Online markets have developed over the past decade to allow investors to buy or sell credits on a global scale. Most recently, companies like Veridium Labs, have integrated blockchain technology to improve the security and transparency of carbon credit transactions.
The public realizes that climate change is real and expects corporate leaders to be part of the solution. The Environmental Defense Fund adds this note of urgency: “This year’s annual Edelman Trust Barometer found that 84% expect CEOs to inform conversations and policy debates on one or more issues, while 64% thought that CEOs should take the lead on change rather than waiting for government to impose it… Corporate CEOs have the clout and credibility to lead the charge for climate action while our federal government lags behind — America is hungry for passionate business leaders who want to drive innovation while safeguarding our planet.”
For those passionate business leaders committed to changing the course of climate change, carbon credits offer a secure and reliable way to make a tangible difference.