{"id":8794,"date":"2021-02-15T08:42:35","date_gmt":"2021-02-15T07:42:35","guid":{"rendered":"https:\/\/reclaimfinance.org\/site\/?p=8794"},"modified":"2023-02-28T18:13:28","modified_gmt":"2023-02-28T17:13:28","slug":"ngfs-must-revise-climate-scenarios-drive-decarbonization-financial-sector","status":"publish","type":"post","link":"https:\/\/reclaimfinance.org\/site\/en\/2021\/02\/15\/ngfs-must-revise-climate-scenarios-drive-decarbonization-financial-sector\/","title":{"rendered":"The NGFS must revise its climate scenarios to drive decarbonization in the financial sector"},"content":{"rendered":"<p><div class=\"fusion-fullwidth fullwidth-box fusion-builder-row-1 nonhundred-percent-fullwidth non-hundred-percent-height-scrolling\" style=\"--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;\" ><div class=\"fusion-builder-row fusion-row\"><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-0 fusion_builder_column_1_1 1_1 fusion-one-full fusion-column-first fusion-column-last\" style=\"--awb-bg-size:cover;--awb-margin-bottom:0px;\"><div class=\"fusion-column-wrapper fusion-flex-column-wrapper-legacy\"><div class=\"fusion-text fusion-text-1\"><p style=\"text-align: justify;\"><span style=\"color: var(--body_typography-color); font-family: var(--body_typography-font-family); font-size: var(--body_typography-font-size); font-style: var(--body_typography-font-style,normal); letter-spacing: var(--body_typography-letter-spacing);\"><strong><span style=\"color: #8ac56b;\"><span class=\"TextRun SCXW108891364 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW108891364 BCX0\"><span class=\"TextRun SCXW259458904 BCX0\" lang=\"FR-FR\" xml:lang=\"FR-FR\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW259458904 BCX0\">February 15th 2021 &#8211; press release published with Oil Change International.<\/span><\/span><\/span><\/span><\/span><\/strong><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #8ac555;\"><b>I<\/b><strong>n a new report published today, Oil Change International (OCI) and Reclaim Finance analyze the shortcomings of the <u style=\"color: #8ac555;\"><a style=\"color: #8ac555;\" href=\"https:\/\/www.ngfs.net\/en\/publications\/ngfs-climate-scenarios\" target=\"_blank\" rel=\"noopener noreferrer\">climate scenarios published by the NGFS<\/a><\/u> and highlight the risk that they may be used to justify slow and inadequate climate action by financial actors. While the stated goal of these scenarios is to help mitigate climate-related financial risks, the report reveals that they may in fact increase them by driving financial institutions to adopt inadequate fossil fuel phase out pathways justified by a risky gamble on negative emissions technologies.<\/strong><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">At a time of a proliferation of climate pledges by financial institutions, OCI and Reclaim Finance are calling on the NGFS to review its scenarios to center robust 1.5\u00b0C trajectories that highlight the need for a managed phase out of fossil fuels and to be transparent about the risks of relying on negative emissions to reach climate objectives. <\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">In <\/span><b>\u00ab\u00a0NGFS scenarios: guiding finance towards climate ambition or climate failure?\u00a0\u00bb, <\/b><span style=\"font-weight: 400;\">OCI and Reclaim Finance analyze the scenarios published by the NGFS in June 2020. These scenarios have rapidly become influential tools in the financial community, as demonstrated by the COP26 presidency\u2019s objective to push financial institutions to use them to assess climate risks. <\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">It explains how the framing chosen by the NGFS sidelines 1.5\u00b0C scenarios and instead focuses on 2\u00b0C scenarios. The NGFS distinguishes two \u201crepresentative\u201d scenarios (1) that both aim at 2\u00b0C and brands all 1.5\u00b0C scenarios as \u201calternate\u201d. These \u201calternate\u201d scenarios are hardly made visible in the NGFS report. Therefore, despite the <\/span><span style=\"font-weight: 400;\"><u><a href=\"https:\/\/www.ipcc.ch\/sr15\/\" target=\"_blank\" rel=\"noopener noreferrer\">IPCC\u2019s warnings<\/a><\/u><\/span><span style=\"font-weight: 400;\">, the NGFS seems to downplay the difference between a 1.5 and 2\u00b0C global warming. <\/span><\/p>\n<blockquote style=\"text-align: justify;\">\n<p><span style=\"font-style: normal;\"><span style=\"background-color: var(--testimonial_bg_color); color: var(--body_typography-color); font-family: var(--body_typography-font-family); font-size: var(--body_typography-font-size); font-weight: var(--body_typography-font-weight); letter-spacing: var(--body_typography-letter-spacing);\">Romain Ioualalen, Senior Campaigner at Oil Change International<\/span><\/span><span style=\"background-color: var(--testimonial_bg_color); color: var(--body_typography-color); font-family: var(--body_typography-font-family); font-size: var(--body_typography-font-size); letter-spacing: var(--body_typography-letter-spacing);\"><span style=\"font-style: normal;\">, explains<\/span>: <\/span><span style=\"background-color: var(--testimonial_bg_color); color: var(--body_typography-color); font-family: var(--body_typography-font-family); font-size: var(--body_typography-font-size); letter-spacing: var(--body_typography-letter-spacing);\">\u201c<em>At a time when central banks and financial regulators are finally starting to realize they have a responsibility to tackle the climate crisis, the efforts of the NGFS are commendable. However, if not reviewed, its scenarios could do more harm than good. The only safe way to tackle the climate crisis, and thus to preserve financial stability, is to limit warming to 1.5\u00b0C through a rapid and managed phase out of fossil fuels<\/em>.<\/span><\/p>\n<\/blockquote>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The report reveals that all the scenarios highlighted by the NGFS rely on high levels of carbon dioxide removal (CDR), technologies that are unproven at scale and raise significant sustainability and human rights concerns (2). Even the scenarios branded as \u201climited CDR\u201d entail CDR levels that exceed the mitigation potential estimated in current scientific studies. The risks and potential real-world implications of such a degree of reliance on negative emissions are not made explicit. <\/span><span style=\"font-weight: 400;\">The report finally stresses how the previously mentioned framing and reliance on CDR create a pro fossil fuel bias in NGFS scenarios. <\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">In the NGFS \u201cmarker\u201d scenario (3), oil and gas production would respectively be 36 and 23% lower than in a \u201cbusiness as usual\u201d scenario and coal would still be burned after 2050. In one of the few NGFS scenarios that aims for a rapid, 1.5\u00b0C transition (4), oil and gas use would be 73% and 78% lower than in a \u201cbusiness as usual\u201d scenario and coal would be phased out by 2040. <\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">While recent research has shown the need to reduce global fossil fuel production by <\/span><span style=\"font-weight: 400;\"><u><a href=\"https:\/\/productiongap.org\/\" target=\"_blank\" rel=\"noopener noreferrer\">6% each year<\/a><\/u><\/span><span style=\"font-weight: 400;\"> from 2020 to 2030 to limit global warming to 1.5\u00b0C, the NGFS \u201cmarker\u201d scenario also allows for continued high levels of investments in fossil fuel extraction. In this scenario, cumulative investment in fossil fuels from 2016 to 2050 only shrinks by 24% compared to \u201cbusiness as usual\u201d, while it drops by 53% in the \u201cfast transition\u201d 1.5\u00b0C scenario. These differences show that the choice of scenarios to highlight in the report leads to very different conclusions as to the viability of new fossil fuel extraction projects. <\/span><\/p>\n<blockquote style=\"text-align: justify;\">\n<p><span style=\"font-style: normal;\"><span style=\"background-color: var(--testimonial_bg_color); color: var(--body_typography-color); font-family: var(--body_typography-font-family); font-size: var(--body_typography-font-size); font-weight: var(--body_typography-font-weight); letter-spacing: var(--body_typography-letter-spacing);\">Paul Schreiber, Campaigner at Reclaim Finance, <\/span><span style=\"background-color: var(--testimonial_bg_color); color: var(--body_typography-color); font-family: var(--body_typography-font-family); font-size: var(--body_typography-font-size); letter-spacing: var(--body_typography-letter-spacing);\">said<\/span><\/span><b style=\"background-color: var(--testimonial_bg_color); color: var(--body_typography-color); font-family: var(--body_typography-font-family); font-size: var(--body_typography-font-size); letter-spacing: var(--body_typography-letter-spacing);\">:<\/b> <span style=\"background-color: var(--testimonial_bg_color); color: var(--body_typography-color); font-family: var(--body_typography-font-family); font-size: var(--body_typography-font-size); letter-spacing: var(--body_typography-letter-spacing);\">\u201c<em>Carbon dioxide removal might be in fashion, but the truth is that we do not know how much it can contribute to mitigating climate change and that doubts remain around its sustainability. So why do NGFS scenarios consider CDR levels that exceed all scientific estimates? One of the scenarios would even require dedicating between one fourth and half of arable land to trap carbon! By betting on unicorns like carbon dioxide removal, NGFS scenarios suggest that a marginal reduction of fossil fuel production is sufficient and even allow for hundreds of billions to be invested in their extraction. As fossil fuel assets concentrate climate risks and NGFS scenarios will play a vital role in mitigating these risks, it is both shocking and disconcerting for the NGFS to disregard the imperative to phase-out fossil fuels<\/em>.\u00a0\u00bb<\/span><\/p>\n<\/blockquote>\n<p style=\"text-align: justify;\"><b>Based on the conclusions from this report, Oil Change International and Reclaim Finance call on the NGFS to review its scenarios to position a 1.5\u00b0C scenario, with a precautionary approach to carbon dioxide removal, as the central scenario.<\/b><span style=\"font-weight: 400;\"> It should make transparent the assumptions behind all its scenarios, notably when it comes to CDR. It should also highlight the need for central banks and financial regulators to adopt concrete, rapid measures to eliminate their support to the fossil fuels sector.<\/span><\/p>\n<p style=\"text-align: justify;\"><u>Press contacts<\/u>:<\/p>\n<p style=\"text-align: justify;\">Romain Ioualalen, Senior Campaigner, Oil Change International | romain@priceofoil.org | +33 6 59 10 42 31<\/p>\n<p style=\"text-align: justify;\">Paul Schreiber, Campaigner, Reclaim Finance | paul@reclaimfinance.org |<\/p>\n<p style=\"text-align: justify;\">Angus Satow, Press Officer, Reclaim Finance | angus@reclaimfinance.org | +44 7847754046<\/p>\n<\/div><div class=\"fusion-clearfix\"><\/div><\/div><\/div><\/div><\/div><div class=\"fusion-fullwidth fullwidth-box fusion-builder-row-2 nonhundred-percent-fullwidth non-hundred-percent-height-scrolling\" style=\"--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;\" ><div class=\"fusion-builder-row fusion-row\"><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-1 fusion_builder_column_1_1 1_1 fusion-one-full fusion-column-first fusion-column-last\" style=\"--awb-padding-top:10px;--awb-padding-right:10px;--awb-padding-left:2px;--awb-overflow:hidden;--awb-bg-size:cover;--awb-border-color:#ffffff;--awb-border-top:1px;--awb-border-right:1px;--awb-border-bottom:1px;--awb-border-left:1px;--awb-border-style:solid;--awb-border-radius:10px 10px 10px 10px;\"><div class=\"fusion-column-wrapper fusion-column-has-shadow fusion-flex-column-wrapper-legacy\"><div class=\"fusion-text fusion-text-2\"><p><b><u>Notes:<\/u><\/b><\/p>\n<p><b><u><a href=\"https:\/\/reclaimfinance.org\/site\/wp-content\/uploads\/2021\/02\/NGFS-scenarios-final.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">Report: The Oil Change International \/ Reclaim Finance report NGFS scenarios: guiding finance towards climate ambition or climate failure?<br \/>\n<\/a><\/u><\/b><\/p>\n<p>(1) The NGFS report considers scenarios in two dimensions. First, whether the 2\u00b0C climate target is met or not. Second, how the transition takes place. Scenarios where targets are met further divide into:<\/p>\n<p>Orderly scenarios, which assume optimal climate action starts immediately and becomes gradually stronger over time. Orderly scenarios are assumed to entail relatively low physical and transition risks.<\/p>\n<p>Disorderly scenarios, which assume either climate action is delayed until 2030 and abrupt emissions cuts are enacted thereafter or climate action is disruptive and generates strong transition risks.<\/p>\n<p>The NGFS paper chooses to center two marker scenarios that are meant to be \u201crepresentative\u201d of orderly and disorderly pathways.<\/p>\n<p>(2) The report provides details on the limits of carbon capture (CDR and BECCS). Additional information can be found in a <u><a href=\"https:\/\/www.greenpeace.org.uk\/wp-content\/uploads\/2021\/01\/Net-Expectations-Greenpeace-CDR-briefing.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">paper<\/a><\/u> by Greenpeace.<\/p>\n<p>(3) This is the \u201cGCAM Immediate 2\u00b0C with CDR\u201d, called \u201cRepresentative Orderly\u201d by the NGFS and denominated \u201cmarker scenario\u201d in this report.<\/p>\n<p>(4) This is the \u201cREMIND Immediate 1.5\u00b0C with limited CDR\u201d, called \u201cAlternate Disorderly\u201d by the NGFS and denominated \u201cfastest transition\u201d scenario in this report.<\/p>\n<\/div><div class=\"fusion-clearfix\"><\/div><\/div><\/div><\/div><\/div><div class=\"fusion-fullwidth fullwidth-box fusion-builder-row-3 nonhundred-percent-fullwidth non-hundred-percent-height-scrolling\" style=\"--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;\" ><\/div><\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":28,"featured_media":2422,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[226,228],"tags":[320,549],"acteurs_financiers":[],"thematique":[2504,2423,2506],"webinar_type":[],"programme":[],"class_list":["post-8794","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-press-release","category-secondary-en","tag-ngfs-en","tag-paris-agreement","thematique-finance-en","thematique-fossil-fuels","thematique-sustainable-finance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The NGFS must revise its climate scenarios to drive 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