In a new report, Swiss Re has raised concerns about the adequacy of the commitments that have come out of the recent COP26 climate talks in Glasgow, suggesting that the pledges “do not unambiguously put the world on a sustainable carbon-reduction trajectory.”
The COP26 summit prompted new net-zero targets and agreements on coal, methane and deforestation, but Swiss re believes that more concrete action from governments and the private sector is urgently needed to mobilise systemic change and decisively advance the green transition.
Despite the new pledges adopted by 197 countries, the world is still expected to miss the Paris Agreement target of limiting global warming to 1.5°C.
Of particular note, following COP26 the US and China have pledged to boost climate cooperation, and India, which is the world’s third-largest carbon emitter, has pledged to achieve net-zero carbon emissions by 2070.
But Swiss Re points out that global emissions will still be double the level needed even when only considering targets for 2030, and the world is still on course for up to 2.4°C warming by 2100.
Additionally, the analysts reported that, among the top 10 greenhouse gas emitters, China, the US and India did not sign the pledge to transition from coal by 2050; and China, India and Russia did not join the methane pledge.
Based on all nationally determined contributions, global greenhouse gas emissions are therefore forecast to increase by about 13.7% by 2030 (relative to 2010) – instead of the 45% cut required.
What’s more, Swiss Re warns that some pledges may not materialise at all, given that many countries, including China, the US, and India, did not even meet their 2020 climate targets.
In order to cut the current more than 50 billion tons per year of greenhouse has emissions to net zero by 2050, and to net negative thereafter, Swiss Re argues that action will be required on multiple fronts at once.
This includes innovation in technology, finance, business models, citizen participation, behaviours, skills, and policy.
Analysts at Swiss Re believe that countries need a policy mix that combines pricing, such as a carbon tax, with standards on taxonomy, data and metrics, support measures including fiscal incentives or lower investment barriers, and targets.
“The complex green transition offers no silver bullet,” Swiss Re concluded. “Governments and the private sector jointly need to take a systemic approach reflecting the urgency of the issue.”
“Consumers, too, have a major role,” it added. “Our research estimates that global warming of above 2°C would result in global GDP losses of up to 14% as early as 2050 without more action. Regular roadmap disclosures can support both positive mobilisation, such as recent commitment by banks, insurers and investors with USD 130 trillion at their disposal to decarbonise investments by 2050, and existing challenges, such as greenwashing.”
