A study by ASCOR indicates that rich countries are not on track to meet climate pledges, with no nation achieving a pathway to a 1.5°C future. Investors are pressing for greater accountability and actionable policies to manage climate risks. Legal pressures and internal political challenges further complicate the global climate landscape, necessitating urgent reforms and finance commitments.
According to a recent study by the Assessing Sovereign Climate-related Opportunities and Risks Project (ASCOR), wealthy nations are making insufficient progress in combating climate change. As sovereign debt investors closely evaluate national responses to climate-related threats, the findings reveal that not a single country is on target to maintain a 1.5°C future in line with the voluntary 2030 emissions reduction pledges. The analysis of 70 countries illustrates a lack of significant improvement from wealthier nations in their climate policies and actions.
Investors, who play a crucial role in reallocating capital, are increasingly expressing concern over the credibility of national climate strategies. Victoria Barron, Chief Sustainability Officer at GIB Asset Management, emphasized the need for “robust and tangible national climate and energy policies” to attract investment flows. There is a consensus among investors that current climate risks are not adequately reflected in market valuations. Consequently, researchers are examining what they have termed the “climate-sovereign debt doom loop” to project potential financial repercussions for countries failing to mitigate environmental risks.
The ASCOR report emerges at a time when numerous nations are facing legal challenges regarding their failure to safeguard their populations against extreme weather events. Furthermore, in light of the United States’ withdrawal from international climate agreements under the incoming administration and escalating corporate resistance within Europe against sustainability measures, the outlook appears grim.
The ASCOR initiative, established three years ago, aims to enable investors to assess how well countries are addressing climate change challenges. Notably, Costa Rica and Angola are approaching their 1.5°C targets, while concerningly, less than 20% of countries continue to approve new fossil fuel projects, and upwards of 80% lack clear commitments to phase out fossil fuel subsidies.
On the financial front, the report indicates that over 80% of affluent countries are not meeting their fair share of the annual $100 billion climate finance commitment, a figure now raised to $300 billion following the COP29 summit in Baku. However, the report highlights that 40 countries have enacted legal frameworks for climate action, and three-quarters of them have established strategies to manage physical climate risks, signaling some progress.
The article underscores the urgent need for more substantial action from wealthier nations to combat climate change, which is increasingly scrutinized by sovereign debt investors. It highlights a notable complacency among affluent countries in fulfilling their commitments to emissions reductions and climate finance obligations, despite the pressing nature of climate crises globally. The study conducted by ASCOR provides a critical analysis of current trends and indicates a disconnect between national pledges and actionable strategies, particularly concerning fossil fuel dependency and infrastructure financing.
In conclusion, the ASCOR report reveals that wealthy nations are falling short in their climate commitments, with no country on track to meet its 1.5°C goals by 2030. The need for credible national policies and financial commitments is paramount, particularly as global climate risks escalate. Legal challenges and market pressures may further compel governments to reevaluate and strengthen their climate strategies. Without substantial action, both the environmental and economic stakes will remain perilously high for nations around the world.
Original Source: www.energyconnects.com
