Rising climate costs will challenge countries and businesses in 2023

Dec 14 (Reuters) – In a year marked by even more climate-related floods, hurricanes and droughts, governments and businesses have been forced to take a closer look at financial risks and their exposure to responsibility.

Nowhere was this more evident than at the UN climate conference in Egypt, where countries reached a historic agreement to establish a fund to help poor countries meet the costs of climate-related disasters. climate.

However, the COP27 talks in Egypt did little to address the cause of these disasters – ever-increasing levels of greenhouse gases in the atmosphere.

This kind of slow progress in tackling climate change has made vulnerable countries determined to get the so-called loss and damage fund approved – after another year of extreme weather conditions disasters, including record heat waves from the United States to China, the collapse of glaciers in India and Europe, and endless drought pushing millions into starvation in East Africa.

Insurers were feeling the pain, as the year delivered three of the costliest disasters of the decade – ‘dystopian’ floods that caused $40 billion in damage to Pakistana series of deadly summer heat waves that collectively caused more than $10 billion in losses for Europe, and Hurricane Ian that swept through Florida and South Carolina at a cost of $100 billion, according to the risk modeling company RMS.

The loss and damage fund has also been a diplomatic blow to poor countries, after decades of American and European resistance over fears it could expose them to legal liability for their historical emissions. But the countries agreed that the fund would tap into existing financial institutions rather than wealthy countries, which would ease those accountability issues – for now.

WHY IS IT IMPORTANT

As watchdog groups have called on companies not to disclose how climate change could threaten them financially, investors have faced growing pressure both to go too far to address climate risks and not to go far enough.

“It’s the Wild West in terms of what companies should be doing. And there are some who are greenwashing, yes,” said Katharine Hayhoe, Canadian climatologist and chief scientist at the Nature Conservancy. But some who make a sincere effort “get pushed away by the culture of purity, people say anything but perfection isn’t worth it.”

Even Hayhoe and others warning of the dangers of climate change have not escaped censorship, some activists lying in to fly at conferences or eat meat.

At some point people started throwing soup and paint and sticking to things.

A view shows the site of a deadly collapse of parts of a mountain glacier in the Italian Alps amid record temperatures, on the ridge of Marmolada, Italy July 5, 2022. REUTERS/Guglielmo Mangiapane/File Photo

“I understand,” Hayhoe said. “It’s a psychological reaction to the real fear that people feel when they start to understand the extent of this problem.”

Others have sought to take their grievances to court. To date, there are 2,176 climate-related lawsuits pending around the world, including 654 filed in US courts, according to Columbia University’s Sabin Center for Climate Change Law.

And scientists and economists are still making progress in accurately calculating the possible contribution of a country’s activity to climate change – and to specific disasters. This line of argument, called “climate attribution science,” has made its way into more courtrooms.

“So far, it’s been a battle of pundits on paper,” Sabin Center executive director Michael Burger said. “What we haven’t seen yet is a real trial” featuring evidence of a certain percentage of bond being awarded to a company or country polluting the climate.

But it’s only a matter of time, experts say.

WHAT DOES THIS MEAN FOR 2023?

With the New Year, expect more public anxiety as climate change continues to escalate – and more concern among businesses and governments about liability and risk.

Businesses and investors will face pressure to make their supply chains and operations climate-resilient.

Courtrooms will see more climate cases filed, he said – focused both on challenging national governments to increase their climate policy ambitions and on holding companies accountable for their emissions or emissions. deceptive practices.

At the end of the year, the countries will meet again at the next UN climate summit, COP28, in Dubai. And they will be under further pressure to see emissions halved by 2030 and net zero by 2050 – the only way to keep global warming below 1.5 degrees Celsius.

“A growing number of power players are coming to terms with the fact that we can’t keep sticking our heads in the sand,” Burger said.

Explore it Reuters news roundup that dominated the year and the outlook for 2023.

Reporting by Katy Daigle; Editing by Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.

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