How can we limit global warming to 1.5°C?

A satellite photo of the Earth featuring Australia

ISF’s previous work on Sectoral Pathways to Net Zero Emissions for The Net-Zero Asset Owner Alliance (NZAOA) has emphasised the urgency and importance for rapid action towards decarbonisation. Preventing the world’s temperature from increasing past 1.5ºC requires timely climate action by key stakeholders such as policy-makers, industry sectors and financiers alike.

On 10 August 2021, the Intergovernmental Panel on Climate Change (IPCC) published the first part (of three) of the new comprehensive Assessment Report 6 about climate. The UN Secretary-General António Guterres described the report as a "code red for humanity.”

This ISF project will lead to decarbonisation pathways based on the new IPCC carbon budget to remain under 1.5˚C for Australia and builds on more than three years of research financed by the Leonardo DiCaprio Foundation, Rockefeller Foundation and the European Climate Foundation between 2018 and 2021.

Applied to all main industry sectors, this research will present Australia’s most detailed emission reduction targets for the finance industry to implement the Paris Climate Agreement.

Which financial sectors has ISF identified?

The 12 main industry and service sectors analysed are: aluminium, chemical, cement, steel and textile and leather industry, power and gas utilities, agriculture, forestry, the aviation and shipping industry, road transport, and real estate and buildings.

Associate Professor Sven Teske, who led the research at ISF said, “It is crucial to have a science-based carbon budget for specific industries to implement climate targets for all parts of these industries.”

Past research and models will be expanded to reflect the requirements of the Australian financial markets. Work designs such as UTS One Earth Climate Model (OECM) will be used as a benchmark and guidance for investment portfolio decision-making and engaging with various stakeholders. Emission paths for each special industry classifications are to be captured in one consistent model consistent with the Net Zero ambition.

The project has been released in line with the COP26 negotiations, sending a strong signal as to the commitment towards Net Zero targets. The NZAOA is supporting the further development of the OECM and applying the latest ISF findings and data for the investor groups they target.

Recommendations for 1.5°C

For policy-makers, industry and financial actors, there are several next steps stemming from the new ISF research to successfully implement the Paris Climate Agreement. It’s recommended no further investment be made in new oil, coal and gas projects and ensure coal is completely phased out by 2030 in OECD countries. By 2030, there must also be a manufacturing stop of oil fuelled internal combustion engines for passenger cars.

Governments have the role of providing detailed transition plans to Net Zero and companies are inclined to disclose climate mitigation strategies, including their targets and investments in renewable energies and climate solutions. Financial players are to implement investment, lending and underwriting portfolio decarbonisation targets in line with 1.5˚C no/low overshoot.

More information

The first phase of the research from 2017 to 2019 has been financed by the Leonardo DiCaprio Foundation. Since 2019, the OECM has been further developed toward no/low overshoot sectorial pathways for 12 industry sectors. This research has been supported and financed in parts by the UN-convened Net-Zero Asset Owner Alliance, the Rockefeller Foundation and the European Climate Foundation (ECF).

Responsibility for the information and views set out in this research lie with the authors. None of the founders can be held responsible for any use which may be made of the information contained or expressed therein.

The One Earth Climate Model (OECM) has been developed under the leadership of the Institute for Sustainable Futures (ISF) at the University of Technology (UTS) in order to develop 1.5˚C compatible climate and energy pathways for countries, regions or globally. A number of climate modelling organisations including the Energy Transition Commission, Potsdam Institute for Climate Impact Research, Science Based Targets Initiative, Rocky Mountain Institute (RMI), CRREM (Carbon Risk Real Estate Monitor) and WWF have been invited to peer-review the OECM-derived net-zero pathways. The research for the buildings pathway is based on research from the Central European University and DBH InnoHub/Budapest.

Initial work by the University of Technology Sydney and the University of Melbourne, Australia, as well as the German Aerospace Centre (DLR) has led to publishing the first joint One Earth Climate Model (OECM) in February 2019 as an open access book with Springer Nature.

Read the ISF news article

How to limit global warming to 1.5°C: guidance for sectors

RESEARCH OUTPUTS

Achieving the Paris Climate Agreement Goals Part 2: Science-based Target Setting for the Finance industry – Net-Zero Sectoral 1.5˚C Pathways for Real Economy Sectors (2022) (Open Access book download)

A) Limit global warming to 1.5°C - Sectoral pathways and Key Performance Indicators: Aluminium, Chemical, Cement, Steel, Textile & Leather industry, Power Utilities, Gas Utilities, Agriculture, Forestry, the Aviation and Shipping industry, Road Transport, and the Real Estate & Building industry (2022) (Report)

B) 1.5 °C pathways for the Global Industry Classification (GICS) sectors chemicals, aluminium, and steel (2022) (journal article)

C) One Earth Climate Model—Integrated Energy Assessment Model to Develop Industry-Specific 1.5 °C Pathways with High Technical Resolution for the Finance Sector (2022) (journal article)

D) OECM data results: