The Network for Greening the Financial System (NGFS) is gambling with the planet’s future by relying on yet-to-be-invented carbon capture and storage (CCS) technology deployed at scale in order to justify continued fossil fuel investment, finds a new analysis of the NGFS’ climate scenarios for central banks and financial supervisors. The study, recently released by think tank and campaigning group Reclaim Finance, used a range of indicators from the NGFS Climate Scenario Database to show that the NGFS 1.5C scenarios are not aligned with the Paris Agreement and are not sustainable.
Both of the NGFS’ low-emissions climate scenarios rely heavily on the removal of vast amounts of carbon dioxide from the planet’s atmosphere to balance the scientifically-determined carbon budgets necessary to stay within the 1.5C target of the Paris Agreement, the study finds. This is unrealistic and represents an enormous and high-risk gamble with the fate of the planet, the authors say, calling for the NGFS to acknowledge the need for a rapid reduction of fossil fuel production, with an immediate end to investment in new fossil fuel projects.
The assumptions behind the NGFS 1.5°C scenarios could push us far beyond this critical threshold, Reclaim Finance campaigner Paul Schreiber said in a blog post introducing the study. “Put simply, these scenarios rely too heavily on carbon capture and storage and permit ongoing investments in fossil fuels, a recipe for climate chaos and stranded assets,” Schreiber said. “The NGFS needs to get with the times, listen to climate science and the International Energy Agency and endorse an end to new fossil fuel projects and investments.”
The report also criticises the NGFS for relying on unsustainable biomass for energy generation in its 1.5C scenarios, and for failing to acknowledge the limitations of scenario analysis and the integrated assessment models (IAMs) behind it.
In order to provide a credible and low risk pathway forward, the NGFS needs to follow the International Energy Agency and acknowledge the need to end investment in new fossil fuels, the report concludes, calling for fossil fuel investment and CCS to be removed from its 1.5°C scenarios. It also calls for the NGFS to stop branding higher carbon drawdown scenarios as “orderly” or less risky and to adopt a precautionary and sustainable approach to biomass use.
The NGFS released its first set of scenarios in June 2020 along with a guide to climate scenario analysis for central banks and supervisors. It updated these scenarios last month and launched a dedicated scenario analysis portal to assist central banks and financial supervisors in conducting climate-related risk analysis.
This page was last updated September 15, 2021
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