The Intergovernmental Panel on Climate Change (IPCC) has issued a stern warning to the world about the dangers of exceeding the 2°C global warming limit. Future scenarios, which present a choice of options for governments, financial organizations, and other decision-making institutions, are used to investigate the repercussions of climate change risks. The IPCC's Fifth Assessment Report (AR5) proposed a new approach to scenario development, referred to as Representative Concentration Pathways (RCPs) because they cover a wide variety of possible radiative forcing scenarios.
Radiative forcing, measured in watts per square meter (W/m2), is the increased heat that the lower atmosphere will retain as a result of increasing Greenhouse Gases (GHGs).
The complexity of humanity’s possible future emissions has been reduced to just four representative pathways:
Potential impact of higher temperature on the environment and humans
Storms, heat waves, floods, and droughts are all worsening as a result of climate change crisis. Warmer temperatures create an atmosphere that can collect, hold, and release more water, causing weather patterns to shift in a way that makes wet places grow wetter and dry areas get drier.
Humans, on the other hand, are susceptible to heatstroke and dehydration, as well as cardiovascular, pulmonary, and cerebrovascular illness, when exposed to excessive heat. People living in northern latitudes are less prepared to deal with intense heat, which makes them more vulnerable.
With the governments’ transition plans in place to ensure physical, energy, and food security, banks must also provide credit facilities to ensure financial security of their institutions and the financial system as a whole. This can be achieved by banks with a regime governed by:
Banks must use the RCPs when creating economic scenarios to quantify climate change risks associated with investments in order to provide sustainable funding.
GreenCap's Risk as a Service (RaaS) technology assists banks in determining their potential to create smart, climate-based scenarios, allowing them to incorporate climate risk into their present framework and policies.
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