WORLD ENVIRONMENT DAY. Four atom bombs per sec, dropped on Earth

‘Like four atomic bombs being dropped on earth every second’ is how Prof Hans Joachim Schellnhuber describes the mauling the earth is taking from man-made greenhouse gases. Four bombs every second works out to 125 million every year.

Prof Schellnhuber, Director of the Potsdam Institute for Climate Impact Research, Potsdam, Germany, who has also served as an advisor to Chancellor Angela Merkel, explains, that is the quantum of incoming solar radiation getting absorbed by the earth, instead of being reflected back, due to the blanket of greenhouse gases in the atmosphere.

Why, then, are we all not burnt to ashes already? The answer is, all the heat is being soaked up by the oceans. Oceans are becoming warmer, and are expanding and rising, with the resultant catastrophic consequences, such as heat waves and deficient monsoons that India is seeing right now. The earth is heating up. Unless the warming is limited to 2 degrees Celsius above temperatures that prevailed in the ‘pre-industrialisation’ levels, mankind is in for big trouble.

But, to contain emissions to limit global warming calls for concerted action by 197 nations. And anybody who thinks it is easy is already under heat effect.

Come November, all the countries will gather in Paris to hammer out a legally binding agreement to make a unified effort possible and unlike the previous meeting in Copenhagen in 2009, there are hopes for a positive outcome.

Leave aside the environmental problems, the lesser-realised challenges are those that businesses would face, not merely in terms of disaster management. Coal and oil companies will find funding costlier.

A ‘keep it in the ground’ campaign is underway, which wants coal companies to stop mining. For meeting the 2 degree target, about 80 per cent of the world’s reserves of coal and oil will need to remain in the ground. Investment and pension funds are under pressure to divest their holdings in these companies. A few days ago, Norway decided its sovereign fund would divest from all coal-related investments - about $ 10 billion. Insurance company, AXA, has decided it would pull out $556 million out of coal investments.

Such campaigns are gaining momentum and sooner than later, companies like Coal India, ONGC, NPTC and BHEL will have to grapple with rising finance costs. The repercussions will be felt by thermal power producers and ultimately, the customers.

But climate change is an opportunity as well. The United Nations Framework Convention on Climate Change has estimated $90 trillion would need to be invested in green energy infrastructure over the next 15 years. Christiana Figueres, the Executive Secretary of the UNFCCC says climate change is “nothing less than a mega development of the world.” She says it would “create jobs, giving economic growth and financial stability like we have never seen.”

The funds divested from polluting industries will flow into cleantech and renewable energy. For example, AXA said it would invest €3 billion into renewable energy by 2020.

In 2014, global investments into renewable energy grew 17 per cent to $270 billion, but within that, renewable energy investments in developing countries amounted to $ 131 billion, up 36 per cent over the previous year. This is less than required, but for renewable energy to take off, it needs to be cheaper than coal.

To make that happen, the London School of Economics recently announced a programme, under which it would call upon governments to pool in 0.02 per cent of their GDP to create a $ 150 billion fund that would invest $ 15 billion a year in research into renewables.

Last month, the IMF estimated the global energy subsidies at $ 5.3 trillion and there is a loud call to remove the subsidies-which again would make coal costlier and renewable energy cheaper.

Businesses are therefore, at a fork in the road and the choice they make, will determine their fate.