Reaching net zero is a vital landmark and hitting our goal by 2050 will help the world stave off the worst effects of climate change. However, it will not be easy – requiring great collaboration and even greater funding.
According to our latest study, Just in Time, emerging markets need USD94.8tn to reach net zero by 2050, underlining the importance of governments, and banks, in developed markets fulfilling the financing pledges made during COP26.
However, as well as focusing our efforts on meeting climate goals that aim to limit future carbon emissions, adapting to climate change will play a key role in safeguarding the planet.
What is adaptation?
Adaptation has many different definitions, with bodies such as the US Global Change Research Program and the Intergovernmental Panel on Climate Change creating subtly different variants. However, at its heart, climate change adaptation is about taking the necessary steps to cope with our new environmental reality.
For example, following a heatwave in Ahmedabad, India that killed more than 1,300 people, the Ahmedabad Municipal Corporation, working closely with a team of public health and policy experts, created an action plan designed to save lives.
The plan, the first of its kind in the region, is renewed annually and includes an early warning system and recommendations for high risk groups such as communities that live in slums, along with outdoor workers. After the plan was implemented in 2013 fewer than 20 people died in the next major heatwave in the region in 2015.
What is the difference between adaptation and mitigation?
While adaptation focuses on adjusting to climate change, mitigation is about reducing the impact of climate change. In practice, that means taking the physical steps necessary to curb carbon emissions.
Projects to implement the use of cleaner transport, such as electric vehicles and railways, and switching to renewable energy are examples of mitigation in action. In 2021, we led on a major green financing deal for a new 200km high-speed railway line in Türkiye, linking the cities of Bandirma and Osmaneli in the North, passing through Bursa and Yenişehir.
Adaptation, mitigation and a just transition
While adaptation and mitigation aren’t one and the same, it is important that we embrace both if we are to protect the world against climate change.
Care must be taken to ensure that our transition to net zero is one that is just and our objectives are met without depriving emerging markets of their opportunity to grow and prosper.
However, while adaptation and mitigation are both necessary, mitigation is especially important in the short term. Immediate action to address the root causes of climate change is crucial and, as a bank, that involves continuing to help fund projects with this very cause.
The task will not be easy which is why we all need to act with much greater urgency and in the spirit of collaboration.