Climate change: 'Unprecedented' economic transformation now needed

• Economic shift needed to cut global emissions, U.N. says
• Finance and tech available to enable the transformation
• Infrastructure must change now, environment report warns

LONDON - At the U.N. COP26 climate summit last year, nations agreed to make more ambitious plans to cut greenhouse gas emissions and boost efforts to prevent the worst impacts of climate change.

But a year on, only 24 countries out of more than 190 have presented new or updated pledges ahead of COP27 in Egypt next month.

Even these revised plans fall well short of the cuts to planet-heating emissions needed by 2030, according to a U.N. Environment Programme (UNEP) report released on Thursday.

UNEP said an "unprecedented" transformation of the global economy is needed to achieve the 2015 Paris climate agreement target of limiting global warming to well below 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial times.

"We've barely scratched the surface of climate action, and you could argue that we've procrastinated this year away," Inger Andersen, UNEP's executive director, said on Thursday at the Thomson Reuters Foundation's annual Trust Conference.

"It is a dismal picture," she said.

Current climate policies are projected to result in global warming of 2.8 degrees Celsius (5 degrees Fahrenheit) this century, or around 2.5 degrees C if the updated climate pledges are implemented, the report said.

The report said "systemic" changes are needed - from the buildings people live in to the food and energy they consume - to achieve a "rapid" shift towards greener economies.

U.N. chief Antonio Guterres told the BBC in an interview this week that the world "will be doomed" if countries keep putting climate change "on the back burner".

Even if countries fulfill their current climate commitments, global greenhouse gas emissions will rise by 10.6% by 2030 compared to 2010 levels, according to a separate U.N. report on Wednesday.

The U.N. Intergovernmental Panel on Climate Change said a 43% reduction in emissions by 2030 is needed to limit warming to 1.5 degrees C above pre-industrial temperatures.

Despite how far behind countries are from cutting emissions to the extent that is required, people should not conclude that all is lost, said Anne Olhoff, a co-author of the separate UNEP report released Thursday.

"The important thing to note here is that we still have time, and we do have the technologies ... so that we can achieve the Paris agreement target," said Olhoff, senior advisor at Danish green think tank Concito.

She said that instead of focusing on the "doomsday" scenarios, more time should be spent considering the potential benefits of green policies such as breathing cleaner air or paying lower energy bills once renewable power systems are in place.

"If I look at a net zero emission future, it actually looks much brighter than the current reality in many ways," Olhoff said in an interview.

'Systemic' change

To achieve the unprecedented emissions cuts and economic transformation required, investments of $4-$6 trillion a year will be needed, in everything from renewable electricity to zero-carbon transport, the report said.

"It's a huge number, but if you put it in perspective of total investments it's actually not that big," Olhoff said.

The investment needed is equal to around 1.5-2% of total financial assets managed, according to UNEP. To shift the money, the report said, reforms are needed, such as putting a price on carbon and making climate risks clearer in decision making.

It said that the global electricity supply is the most advanced sector in shifting to net zero as the costs of renewables fall, but emissions in other parts of the global economy will be more difficult to cut.

Cement and steel are large emitters and less carbon-intensive alternatives will need to be developed, for example, along with reducing demand for building materials through more recycling.

Another shift which may be harder to achieve is changing what people consume, especially food, according to the report.

The global food system is responsible for one third of emissions, and the report said these emissions are projected to almost double by 2050 with current practices as populations and demand for meat and dairy products grow.

Some of the most significant changes needed, such as a drop in meat consumption to lower agricultural emissions, require changes in people's lifestyles, UNEP said.

Olhoff said there are some "positive signs" that diets are changing, but nowhere near the scale needed.

People will be more encouraged to make these changes if the can clearly see financial savings and health benefits, particularly in richer countries where the carbon footprint of food consumed and food waste are a huge priority.

Urgent action

Recognising the multiple crises facing governments - from energy prices to the cost of living - the report calls on them to accelerate decarbonisation instead of allowing the myriad challenges to "divert attention" from climate action.

Olhoff said the "massive implications" of climate change - including growing disasters and financial losses - are more apparent than they were even a few years ago, making it clearer for policymakers that they need to act.

The report emphasised how huge shifts in infrastructure investment are needed now so that carbon emissions are not locked in for decades.

Many buildings last 80 years on average, for example, while coal-fired power plants run for 45 years, it said, meaning investments in in fossil-fuel-heavy infrastructure now will have long lasting consequences for economies and the climate.

"It's about reducing emissions as quickly as possible now, of course, but it's also about getting the foundation for the transformations needed after 2030 in place," Olhoff said.

She said there is a long time lag between when a decision is made and a policy is implemented to when emissions are reduced.

"So it has to be set in motion now," she said.

(Reporting by Jack Graham; Editing by Kieran Guilbert and Laurie Goering.)