The final report of the IPCC’s sixth assessment cycle shows we have the tools, but not much time, to keep the global goal of limiting warming to 1.5°C within reach

The end of the IPCC’s sixth assessment cycle marks a crossroads for global climate ambition. It’s likely the last assessment cycle before decisions to limit global warming will have been made.

In bringing together findings from the cycle’s six reports, the IPCC’s AR6 Synthesis Report lays out, in no uncertain terms, that decisions and actions to keep to the global goal of limiting warming to 1.5 degrees Celsius must be made imminently. 

The ‘rapidly closing window of opportunity’ identified by the IPCC continues to narrow as global emissions in 2021 rebounded to near parity with 2019 levels, and global energy-related emissions reached record highs in 2022. 

According to the Synthesis Report, if the annual CO₂ emissions between 2020–2030 stay, on average, at 2019 levels, the remaining carbon budget to remain below 1.5°C of warming is likely to be spent by 2030. 

The report shows that, as of 2020, climate policy settings and 2030 targets, expressed through nationally determined contributions (NDC), imply temperature rises far in excess of 2°C. 

This underscores the urgency with which governments, in lockstep with the private sector, must act. 

But the IPCC’s findings also demonstrate that we have, at our disposal, the tools to change course. 

There are mitigation options available now that can reduce global greenhouse gas (GHG) emissions by at least 50 per cent by 2030 at a cost of US$100 per ton CO₂e or less. Options costing less than US$20 per ton CO₂e constitute more than half of this potential. 

Since 2010, solar and wind costs have decreased worldwide and remain the most cost-effective option for new power generation across a majority of nations, despite recent global economic and energy market turbulence. 

Equally, headway has been made globally in decoupling GDP growth from emissions as energy intensity fell by around two per cent per year across the last decade. These declines, however, have been comparably minor to those required to stay under 2°C.  

So while tools and technology are there – and the urgency to act now is even more evident – the policies and decisions to drive swift, large-scale change are still needed. 

Here, then, are some of the key aspects of the IPCC summary for policymakers for Australia and Southeast Asia.

Southeast Asia

The IPCC finds that the slow uptake of low-emission technology is due, in part, to limited finance.

It says that, broadly, climate finance ‘falls short of the levels needed to limit warming to below 2°C or to 1.5°C across all sectors and regions’. 

Capital costs are far higher in Southeast Asian nations than they are in industrialised nations. 

The International Energy Agency (IEA) estimates the cost of capital for a solar PV plant in 2021 in key emerging economies was between two and three times higher than in advanced economies. 

A recent analysis by the Oxford Sustainable Finance Group finds that private renewable electric utilities in ASEAN face average debt capital costs approximately 38 per cent higher than fossil fuel or mixed utilities  – and far in excess of comparable renewable utilities in industrialised economies.  

Southeast Asia is one of only a few regions where such a stark disparity exists.

The provision of concessional loans and de-risking support are important contributors to accelerating Southeast Asia’s energy transition. 

At the same time, it’s important Southeast Asian countries provide an enabling environment to attract private sector investment. 

This could start with a clear long-term power sector development plan and market mechanisms that would ensure investors’ confidence in the market.

The IPCC report also recognises the potential synergies between mitigation action and sustainable development. 

Six among 11 Southeast Asian countries are still classified by the World Bank as ‘low income’ and ‘lower income’ (with gross national income per capita less than $4,045). 

Synergies between climate mitigation and other sustainable development goals are, therefore, very important for the region. 

According to IEA, three-quarters of Southeast Asia’s increase in energy demand to 2030 relies on fossil fuels, leading to a near 35 per cent increase in CO₂ emissions. 

According to the World Health Organisation, air pollution in the region is among the highest in the world. There is a strong link between increased renewable energy use, improved home energy efficiency, electric vehicle uptake and air pollution reduction. 
Additionally, our experience from the Southeast Asia Framework for Ocean Action in Mitigation (SEAFOAM) demonstrates that coastal blue carbon management helps sequester carbon and creates co-benefits, such as reducing poverty and engaging indigenous communities to create more robust climate change solutions.

Australia

The IPCC report further underlined how much it is in countries’ collective interest to pursue strong global action – through domestic action and through climate finance, trade and diplomacy. 

Of developed countries, Australia is one of the most vulnerable to human-induced climate change because the climate already tends towards extremes.

The IPCC’s findings that the world is already suffering from climate change will not be news to Australian communities who have suffered over the last few years from droughts, floods, heatwaves and bushfires. 

Australia’s climate ambition and implementation are gaining traction, but more is still needed. 

There is now bipartisan agreement to reach net zero emissions by or before 2050 nationally and across all states and territories. Australia has substantive policy at the federal level, including a stronger 2030 target, reforms to the Safeguard Mechanism as well as new funding through various initiatives. 

However, Australia does not yet have a comprehensive approach that looks at all sectors of the economy. 

The IPCC report says even more emphatically than before that the time for stronger, faster action is now. 

Otherwise, Australia and the world will miss the window to avoid the worst impacts of climate change.

Yet Australia is widely regarded as a country that can benefit strongly from a global net zero economy because of its renewable energy and mineral resources. 

The economic benefits can be enormous if actively managed with action by government, industry and the finance sector. 

Climateworks analysis across many economic sectors is in line with the IPCC finding that a wealth of effective, low-cost options are already available to reduce emissions. Working jointly with industry participants, we have identified net zero pathways in line with 1.5°C for mineral resource supply chains.

However, the finding from the IPCC report that requires most change from Australia is to address the risks to the economy from fossil fuel use and production. 

Australia remains an economy heavily dependent on fossil fuels – domestically and for exports. It is one of the world’s largest exporters of thermal and metallurgical coal and gas. 

This IPCC report shows that the time for these exports is over; emissions from existing fossil fuel infrastructure would take the world beyond the 1.5°C limit. 

As the UN Secretary-General put it: ‘now is the time to accelerate the energy transition to a renewable energy future. Fossil fuels are a dead end.’ 

Australia has the building blocks to set in place this transformation.

Collective action

It is not only within borders that policymakers must act to pull in the right direction but also between.

Disparities in cumulative emissions between countries continue to widen, while most emerging economies face higher costs of capital related to energy transition. 

COP27 did little to demonstrate forthcoming solutions to drive the scale of mitigation action required or ameliorate the unequal distribution of costs. 

However, international cooperation will be central to galvanising the consensus required to sharply reverse GHG emissions in line with 1.5°C, which according to the IPCC entails a 43 per cent reduction on 2019 levels by 2030, 60 per cent by 2035, and 69 per cent by 2040. 

This IPCC report is something of a ‘how to’ guide for policy-makers charting a path forward through this critical decade. 

Their role in accelerating emissions reductions and ensuring shared climate safety cannot be overstated.

Read more about our work in Southeast Asia and Australia.

Read more about our work on energy transitions in the region.

Read more about pathways to net zero for industrial supply chains.