Climate Change & Carbon Markets - The Essential Carbon Credit Report for Sustainability & ESG Pros

1.1 Greenhouse gases and climate change

The stability of the Earth’s climate is reliant on a delicate balance of inputs and outputs. Although there are a number of factors that affect local temperatures, the predominant component controlling globally averaged temperatures is incoming and outgoing solar radiation. In a simplistic model of the Earth system, the atmosphere and cloud cover reflects some of the incoming solar energy, but the remainder reaches the earth in wavelengths from the ultraviolet (UV) to infrared (IR) parts of the spectrum. However, it reradiates that energy mostly in the form of IR radiation back into the atmosphere. Greenhouse gases (GHGs), such as water vapour, carbon dioxide (CO2) and methane (CH4), prevent much of that radiation from escaping the earth’s atmosphere and reaching outer space. Their molecular structure is such that it absorbs IR radiation and then emits some of it back towards the earth’s surface, effectively trapping heat and creating what is known as the “greenhouse effect” (Figure 1). Many greenhouse gases have existed throughout the history of the Earth in fluctuating concentrations and have contributed to the natural variability in average temperature over that time. They play an integral role in the climate system by helping to maintain the Earth’s surface temperature at a level suitable to sustain life. However, the dramatic increase in GHG emissions since the industrial revolution has led to the “enhanced greenhouse effect,” whereby the increasing concentrations of atmospheric GHGs are disrupting the climate system.

As GHG concentrations continue to rise, more IR radiation is trapped in the Earth’s atmosphere, decreasing the total amount of outgoing radiation and changing the Earth’s energy balance. While there are certainly other influences that affect temperatures at different times in different regions, the prevailing trend in average global temperatures has been one of warming. Although some regions may benefit from climate change, most must brace for severe consequences including irregular precipitation patterns, sea-level rise and increased frequency of extreme weather events.

1.2 Effects of global climate change

Climate change is a unique environmental problem due to the long-lived nature of greenhouse gases and the geographic diffusion of their effects. Unlike conventional air pollutants, whose effects are felt locally over relatively short timescales, GHGs are diffuse and have lifetimes in the atmosphere of hundreds of years. This means that the effects of emissions are felt globally and in the aggregate, leading to a disconnect between those who emit and those who bear the consequences of emissions. Since GHGs subtly alter the composition of the global climate system, local effects will depend on the factors that drive local weather patterns. This reality about the nature of GHGs makes climate change one of the most harrowing collective action problems in history, because the costs of regulation or decreased consumption are not directly linked to the benefits of climate change mitigation. In addition, those who have contributed least to the problem—the developing world—will in general have the poorest ability to cope with the impacts of climate change.