Stop the effects of climate change it is of vital importance for the future of our future generations and for the guarantee of the maintenance of natural resources and biodiversity.
However, actions to curb climate change, such as reducing greenhouse gas emissions, are costly. It requires a prior budget and preparation. Is Spain economically prepared to contribute to reducing the effects of climate change?
Paris Agreement
Hundreds of countries around the world, contributors to the emissions of gases that cause climate change, have ratified the Paris Agreement. This determination by countries to stabilize global CO2 emissions implies various changes in the global financial system. These changes make governments and businesses have to adjust their budgets. What about the Spanish economy?
This is one of the questions that experts in the field of climate change try to answer. In a discussion forum held in Madrid by lto AFI business school and the French Institute for Sustainable Development and International Relations (Iddri), LLAMADA "Climate risk management and sustainable financing", They have dealt with issues of this nature.
The ratification of the Paris Agreement has meant "A before and after" in the economic implications that governments will have in the fight against climate changeAmong these implications are companies with many carbon-intensive financial assets. To do so, they must define risk maps that various sectors will face as the energy transition toward renewables progresses. That is, investors are beginning to question whether investments that are economically profitable today, based on the exploitation and extraction of fossil fuels, will be profitable in a future where renewable energy will prevail. A comprehensive analysis of the differences between climate change and global warming is essential to understand this situation.
This approach to energy transition, combating climate change, and decarbonization requires institutions and corporations to develop analyses of the potential climate risks associated with their investments. For example, they must conduct comprehensive analyses of the profitability of extracting undiscovered fossil fuels or companies that are developing their activities in areas that are more susceptible to being affected by natural disasters caused by climate change. A clear example of this vulnerability can be seen in Vanuatu, a highly vulnerable region of the world.
Reforms in the global financial system
The Financial Stability Board It is the body promoted by the G20 to reform the global financial system. Due to the changes and implications of climate change, they have been forced to place the financial implications of combating it at the center of their priorities.
To address these financial changes, a working group has been created to prepare a report that will guide countries on the financial implications of the increasing effects of climate change. This report will also address the importance of investing in green infrastructure as a key strategy, especially in the Spanish economy. Reforms in this area are crucial to adapting to a changing environment.
Reforms and guidelines will be carried out during the months from now until June so that companies and corporations can shape their changes in the financial system. The document to be presented at the G20 summit in June in Germany will be a tool that helps in advising decision-making on the risks and opportunities presented by global warming, and as well as the most convenient goals that must be chosen to carry out these analyzes.
What happens in Spain?
In Spain, awareness of climate change and global warming does not have much influence on investments. Today the Bank of Spain does not know how many assets it has associated with assets that work with coal. For this reason, there is no strategy to help develop actions if the danger thresholds are exceeded due to the effects of climate change. Nor are they aware of the vulnerability of infrastructure to the increase in natural disasters. This lack of strategy is similar to the situation in other countries, as can be seen in the article on Germany and its efforts to combat climate change.
In short, Spain is, as always, at the bottom of the list of countries. To date, it remains unaware of the potential risks that climate change poses to our economy, a problem that also affects various regions such as .
