Climate policies ‘often out of sync’ with 2030 targets: FTSE Russell
Russell Marino Soh
ALTHOUGH the past year has seen some enhancements to the G20 countries’ climate policies, inconsistencies remain between these policies and many countries’ long-term targets, according to FTSE Russell.
The global index provider said in a report on Monday (Nov 14) that many emerging economies’ nationally-determined contributions (NDCs) for 2030 actually imply “significantly lower ambitions than their current policies are on track to deliver”.
Parties to the Paris Agreement are required to set out climate action plans in the form of NDCs, setting out a plan to cut emissions and adapt to the impacts of climate change.
Russia was highlighted as having a 0.6 degrees Celsius discrepancy between its policies and 2030 NDC, while Turkey had a gap of 0.3 deg C.
Conversely, the policies of many advanced economies are “significantly off track” against their 2030 NDCs, said FTSE Russell. Canada’s 2030 NDC, for instance, is aligned to a 3 deg C trajectory, which is lower than the 4 deg C trajectory that its current policies are tracking toward.
FTSE Russell also flagged an “ambition gap” between the 2030 NDCs and 2050 net zero targets, with the former being “notably weaker” than the latter. It found that just seven of the G20 countries’ 2030 NDCs are aligned to the 2 deg C limit set out in the Paris Agreement.
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Chief executive Arne Staal said that “whilst countries’ current climate policies are gradually aligning with their 2030 commitments, they currently still imply a 2.7 deg C level of warming on average, well short of the ambition needed to reach the goals of the Paris Agreement by 2050”.
The report also pointed to losses from natural disasters, which have risen by 5 per cent annually over the last 30 years. It noted that risks arising from climate change are on the rise, with the G20 countries set to face a set of diverse and highly-regionalised hazards.
Russia and Canada, for example, are set to see “rapid deterioration” of ecosystems and infrastructure as they experience the largest projected temperature shifts. Livelihoods in drier regions are also at risk, as water availability and crop yields are negatively affected by climate change, while forest fires become more frequent.
“Asset valuations and investors need to adapt both analytical tools and investment strategies to respond to these challenges,” said Staal.
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