Demand for fuel and raw materials is decimating the natural world, making extreme climate effects more likely. So, what might the world be like for people and investors as we go beyond planetary boundaries?
Read this article to understand:
- Why unsustainable resource use is testing Earth’s ability to regenerate and self-regulate
- How failing to meet Paris Agreement goals will alter zones suitable for human settlement, agriculture and fisheries
- How investing in companies whose operations, products or services can reduce nature impacts can help preserve the planet and potentially generate solid returns
It is beyond dispute that the rate at which we are using natural resources and creating waste is faster than the environment’s ability to restore and regenerate.
Without a meaningful change of direction, an acute resource squeeze and much hotter planet are likely, where the zones suitable for human habitation shift and shrink. Impacts will increase with “every increment” of global warming, according to the Intergovernmental Panel on Climate Change (IPCC). But the precise effects are difficult to anticipate, as physical processes interact in non-linear ways and social outcomes will depend on the actions taken now to transition to a more regenerative economy and how society adapts.1
So, to highlight Earth Overshoot Day – the date when human demand for ecological resources and services reaches beyond what the planet can regenerate that year – we present five charts showing what the current path could lead to. Alongside them, we have insights from our climate pillar lead and investment teams.
This article is based on recent analysis that tries to capture the scenario today and possible outcomes in a world where the average temperature is around three degrees higher. This is not an unrealistic, catastrophic projection; it reflects where current policy action is pointing.2
Nature’s resources: Using too much
The natural world delivers essential services for human survival, including clean air, water and food. But renewable resources need time to renew; if usage is faster than regeneration, the quality of the environment deteriorates. Earth Overshoot Day falls this year on August 2.
Figure 1: Earth Overshoot Day, 1971-2023
Source: Earth Overshoot, 2023.3
Testing planetary boundaries
Many human activities have already moved beyond “safe” zones, according to analysis led by the Stockholm Resilience Centre.
Figure 2: Beyond the safe operating space for humanity
- Novel entities (chemical and plastic pollution): Potentially toxic, long-lasting artificial substances (heavy metals, pesticides, detergents, radioactive materials, microplastics) introduced into ecosystems. Living, invasive species may also be harmful.
- Biogeochemical flows: The flow of nutrients needed for healthy plant growth, including nitrogen and phosphorus. Both compounds used in fertilisers can cause water pollution and excessive algal growth.
- Land-system change: Driven by the human population impacting the natural environment, mostly from converting intact natural landscapes to farmland.
- Biosphere integrity: Biodiversity loss. Boundary set at ten times the average background extinction rate, ten extinctions per million species per year. Biodiversity Intactness Index (BII): Metric showing how well biodiversity has been maintained. In well-functioning ecosystems, BII is over 90 per cent; in at risk ecosystems, BII is less than 30 per cent.
- Climate change
Source: Stockholm Resilience Centre, 2022.4
Altering the climate niche
For thousands of years, humans have lived in zones (human climate niches) where the mean annual temperature is around 13°C.5 In a business-as-usual scenario, average temperatures are expected to increase dramatically. Around one third of the world’s population could experience a mean temperature over 29°C by 2070, with extreme hot zones covering most of the tropics. In those areas, heat could be life-threatening for more than ten months each year.6 Forecasts suggest each additional degree of warming could push one billion people out of the niche, potentially forcing them to migrate, with dramatic geopolitical and social impacts.7
Figure 3: Business-as-usual: Extreme hot zones expand dramatically by 2070
Source: GLOBAÏA, 2023.8
The struggle for food on the plate
Although higher concentrations of carbon dioxide encourage plant growth, yields of many important sources of food tend to diminish at higher temperatures, compounded by shifting rainfall patterns.9 Maize yields could drop 25 to 35 per cent if temperatures increase by 3.3 degrees or more, while wheat could be less impacted. The catch potential of fisheries around the equator could also fall sharply (Figure 4).10
Figure 4: Anticipated decline in productivity at higher temperatures (per cent)
Note: Graphic adapted from The CAT Thermometer.11
Source: Aviva Investors, 2023; IPCC, 2023; iScience, 2022; Climate Action Tracker, 2022.12,13,14
Facing multiple tipping points
As we peer into the future, it is impossible to anticipate what could happen as abrupt phase changes could set off unexpected reactions. Researchers believe the world already faces several climate tipping points (self-sustaining shifts in the climate system that once started are almost impossible to stop, locking in substantial impacts like ice sheet collapse or coral reef die-off). At higher temperatures, more momentous events may follow.
Figure 5: Risks escalate above 1.5°C warming (°C)
Source: Science, September 9, 2022.15