4 things you need to know about the IPCC AR6 Synthesis report

This week, the Intergovernmental Panel on Climate Change (IPCC) released its AR6 synthesis report, the culmination of years of research and discussions by the world’s leading climate scientists. The message is clear: we need immediate action to avert a climate catastrophe. Global reliance on fossil fuels has left us with a narrow window of opportunity to reduce emissions, build resilient societies, and avert catastrophic climate change. We need ambitious policies that facilitate a smooth and rapid transition, credible decarbonisation efforts to reduce emissions across the economy, and, above all, the money to make it happen.

It’s a big agenda, but it’s a vital agenda. As we look to meet the challenges laid out in the IPCC Synthesis report, here are four things you need to know.

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1.??We are already living in the era of impacts.

All around the world, we are seeing the increasing impacts of climate change. Floods, heat waves, and wildfires are only a few of the ever-increasing effects of our consumption of fossil fuels, causing substantial damage and, in some cases, irreversible losses. These effects are particularly devastating for the world’s most vulnerable regions, where droughts and floods are 15 times more likely to kill people. The science is clear — to secure a livable future we need immediate fossil fuel phaseout. ?Delaying action any further will increase the cost of transition, with risks of stranded assets, escalating costs, and increased losses and damages. The world’s economies need to get capital flowing quickly to the places that need it most, and work together to build more resilient societies. Climate Bonds is developing a resilience taxonomy, to provide guidance for policymakers and investors as they adapt our world to the already present climate impacts.

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2.??The world needs a rapid, credible transition to mitigate climate change and build a more resilient future.

To limit warming to 1.5°C, the world needs coordinated action with adaptation and mitigation integrated into all financial decisions to drastically reduce global reliance on fossil fuels and decarbonise high-emitting sectors. Climate Bonds is leading the way on defining credible transitions to support rapid, ambitious, and practical efforts to decarbonise all sectors of the economy. This transition will require system-wide change across the entire economy. Heavy industries like steel and cement will need to make immediate emissions cuts, while regulators will need to establish sustainable policies in sectors like buildings and agriculture. This global transition needs to be ambitious, credible, and above all, rapid.

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3.??We need smart policies that direct capital to deliver this rapid transition.

We have a window of opportunity to secure a future that our children will want to live in — but that window is closing rapidly. Without urgent and effective mitigation, climate change threatens the lives and livelihoods of everyone on the planet now and in the future. To grasp this window of opportunity, we need policymakers to enact sustainable finance policies across all sectors, to ensure finance flows to deliver system-wide rapid transition. While current global policies aren’t sufficient to limit global warming to 1.5°C, policymakers have the opportunity to effect real change though smart, effective policies which address both climate and social development priorities in all areas of decision making. By integrating climate actions with macroeconomic policies through economy-wide packages, policymakers can ensure a smooth rapid transition. In addition, a rapid transition is a cheaper transition. Taking immediate action will open up significant investment and development opportunities. The upcoming Climate Bonds 101 Sustainable Finance Policies for 1.5°C paper outlines the variety of policies that can be implemented across the globe.

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4.??The window of opportunity is still open.

The IPCC report makes it clear that there are mitigation options which could, if implemented sufficiently rapidly, halve global emissions by 2030 and keep the world on a 1.5°C pathway. The growth of renewables and development of decarbonization technologies for even the hard-to-abate sectors provide a tremendous opportunity for growth and investment and demonstrate that there is a path forward for the planet. The funds are there: investors are eager to finance credible efforts to fight the climate crisis. However, there are barriers to redirecting capital to climate action in many parts of the world. Sustainable finance policy can overcome these barriers and enable largescale capital flows to deliver a global transition, build resilient societies, and avert catastrophic climate change. Now, it’s up to all of us to get us there. The window is still open — but we have to run.

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An expanding opportunity for sustainable finance

Climate Bonds is continuing to expand the ways investors, industry leaders, and policymakers can address the growing climate crisis. Climate Bonds Standard Version 4 will soon be available, expanding the leading global certification scheme for sustainable finance and enabling certification of entities, as well as use of proceeds bonds. Climate Bonds is also preparing to release "101 Sustainable Finance Policies for 1.5°C" to provide policymakers with actionable guidance for policies that will facilitate a rapid and credible transition to a net zero future.