In March of this year, the IPCC reported that global surface temperature for the years 2011-2020 had reached an average of 1.1°C higher than pre-industrial levels. This unequivocally came as a result of human activity, principally through the emission of greenhouse gasses.
In this report, the IPCC stated it had high confidence that global warming would exceed the Paris Agreement’s 1.5°C goal sometime this century. This then proceeded to happen (temporarily) just a few months later when the World Meteorological Organization reported that July 2023 was the hottest month on record and about ~1.5°C warmer than the pre-industrial average.
The IPCC has stated that, under a likely scenario, the year 2100 would see the planet reach a median global warming of 2.8°C above pre-industrial levels (with a range of 2.1 to 3.4°C). The last time the planet experienced a similar temperature was over 3 million years ago.
3°C of warming will render the earth inhospitable for the many ecosystems that depend on it. Certain parts of the globe will experience fatal levels of temperature-humidity conditions for more than 300 days a year. Some regions will see 100% of local species exposed to life-threatening temperature conditions (with much more of the world hovering around the 5-20% range). Food chains will become increasingly insecure, with production of food like maize and fish declining by as much as 30% in certain areas.
The global water cycle will have intensified to the point where severe droughts, heatwaves, wildfires, and other extreme weather events are commonplace. ‘Once-in-100-year’ storms will occur annually and sea levels will rise by several feet. Whole communities will be wiped out, creating a mass population of climate refugees.
As highlighted by the temporary crossing of the 1.5°C threshold in July, things have only deteriorated further since the IPCC published its findings. The acceleration of the climate crisis can be visualized by a series of charts:
1/ Global air temperatures in the summer of 2023 were the hottest on record, and remain significantly above 2022 levels
Remaining gray lines show the years 1979 through 2021. Source: Climate Reanalyzer.
2/ Sea surface temperatures also broke records this summer and show a significant departure from historical trends
Remaining gray lines show the years 1981 through 2021. Source: Climate Reanalyzer.
3/ Southern hemisphere sea ice extent, the area of ice covering the Antarctic Ocean, peaked at just shy of 17 million km2 this summer (over 1 million km2 less than in 2022)
Remaining colored lines show the years 1978 through 2021. Source: Climate Reanalyzer.
4/ In the northern hemisphere, the Greenland ice sheet has experienced peak melting at an unprecedented degree and frequency this year
Source: National Snow & Ice Data Center.
5/ Due to melting ice sheets and warming sea waters, 2023 saw sea levels rise to the highest on record (~8 inches above 1880 levels)
6/ And atmospheric methane (a powerful heat-trapping gas) has continued to accelerate over the last few years, reaching 1,922 parts per billion in May 2023
Despite the progress that has been made in combating the climate crisis, it is getting worse and not better. And these charts tell us it is getting worse more rapidly than previously anticipated.
This decade will largely determine whether these alarming trends can be curbed. Limiting warming to 1.5 or 2°C and avoiding the most catastrophic effects of climate change requires urgent and deep GHG reductions across all sectors and geographies.
For investors, the IPCC predicts that private and public sector finance will need to increase 3-6x current levels in order to limit warming to 1.5 or 2°C. This funding gap is particularly prevalent in developing countries and at Series B+ stages of capital.
USV remains committed to our thesis of investing in companies and projects that provide mitigation for or adaptation to the climate crisis. We urge investors across the capital stack to join us so that we may avoid the very worst of the climate disaster, the indications of which are already making themselves known.