Editing IPCC:AR6/SR15/TS (section)

=== Enabling Rapid and Far-Reaching Change ===

'''The speed of transitions and of technological change required to limit warming to 1.5°C above pre-industrial levels has been observed in the past within specific sectors and technologies {4.2.2.1}. But the geographical and economic scales at which the required rates of change in the energy, land, urban, infrastructure and industrial systems would need to take place are larger and have no documented historic precedent (''limited evidence, medium agreement'').''' To reduce inequality and alleviate poverty, such transformations would require more planning and stronger institutions (including inclusive markets) than observed in the past, as well as stronger coordination and disruptive innovation across actors and scales of governance. {4.3, 4.4}

'''Governance consistent with limiting warming to 1.5°C and the political economy of adaptation and mitigation can enable and acceleratesystemstransitions,behaviouralchange,innovationand technology deployment (''medium evidence, medium agreement'').''' For 1.5°C-consistent actions, an effective governance framework would include: accountable multilevel governance that includes non-state actors, such as industry, civil society and scientific institutions; coordinated sectoral and cross-sectoral policies that enable collaborative multi-stakeholder partnerships; strengthened global-to-local financial architecture that enables greater access to finance and technology; addressing climate-related trade barriers; improved climate education and greater public awareness; arrangements to enable accelerated behaviour change; strengthened climate monitoring and evaluation systems; and reciprocal international agreements that are sensitive to equity and the Sustainable Development Goals (SDGs). System transitions can be enabled by enhancing the capacities of public, private and financial institutions to accelerate climate change policy planning and implementation, along with accelerated technological innovation, deployment and upkeep. {4.4.1, 4.4.2, 4.4.3, 4.4.4}

'''Behaviour change and demand-side management can significantly reduce emissions, substantially limiting the reliance on CDR to limit warming to 1.5°C {Chapter 2, 4.4.3}.''' Political and financial stakeholders may find climate actions more cost-effective and socially acceptable if multiple factors affecting behaviour are considered, including aligning these actions with people’s core values (''medium evidence, high agreement''). Behaviour- and lifestyle-related measures and demand-side management have already led to emission reductions around the world and can enable significant future reductions (''high confidence''). Social innovation through bottom-up initiatives can result in greater participation in the governance of systems transitions and increase support for technologies, practices and policies that are part of the global response to limit warming to 1.5°C . {Chapter 2, 4.4.1, 4.4.3, Figure 4.3}

'''This rapid and far-reaching response required to keep warming below 1.5°C and enhance the capacity to adapt to climate risks would require large increases of investments in low-emission infrastructure and buildings, along with a redirection of financial flows towards low-emission investments (''robust evidence, high agreement'').''' An estimated mean annual incremental investment of around 1.5% of global gross fixed capital formation (GFCF) for the energy sector is indicated between 2016 and 2035, as well as about 2.5% of global GFCF for other development infrastructure that could also address SDG implementation. Though quality policy design and effective implementation may enhance efficiency, they cannot fully substitute for these investments. {2.5.2, 4.2.1, 4.4.5}

'''Enabling this investment requires the mobilization and better integration of a range of policy instruments''' that include the reduction of socially inefficient fossil fuel subsidy regimes and innovative price and non-price national and international policy instruments. These would need to be complemented by de-risking financial instruments and the emergence of long-term low-emission assets. These instruments would aim to reduce the demand for carbon-intensive services and shift market preferences away from fossil fuel-based technology. Evidence and theory suggest that carbon pricing alone, in the absence of sufficient transfers to compensate their unintended distributional cross-sector, cross-nation effects, cannot reach the incentive levels needed to trigger system transitions (''robust evidence, medium agreement''). But, embedded in consistent policy packages, they can help mobilize incremental resources and provide flexible mechanisms that help reduce the social and economic costs of the triggering phase of the transition (''robust evidence, medium agreement''). {4.4.3, 4.4.4, 4.4.5}

'''Increasing evidence suggests that a climate-sensitive realignment of savings and expenditure towards low-emission, climate-resilient infrastructure and services requires an evolution of global and national financial systems.''' Estimates suggest that, in addition to climate-friendly allocation of public investments, a potential redirection of 5% to 10% of the annual capital revenues <sup>[[#fn:5|5]]</sup> is necessary for limiting warming to 1.5°C {4.4.5, Table 1 in Box 4.8}. This could be facilitated by a change of incentives for private day-to-day expenditure and the redirection of savings from speculative and precautionary investments towards long-term productive low-emission assets and services. This implies the mobilization of institutional investors and mainstreaming of climate finance within financial and banking system regulation. Access by developing countries to low-risk and low-interest finance through multilateral and national development banks would have to be facilitated (''medium evidence, high agreement''). New forms of public–private partnerships may be needed with multilateral, sovereign and sub-sovereign guarantees to de-risk climate-friendly investments, support new business models for small-scale enterprises and help households with limited access to capital. Ultimately, the aim is to promote a portfolio shift towards long-term low-emission assets that would help redirect capital away from potentially stranded assets (''medium evidence, medium agreement''). {4.4.5}