Transcript by Kensho.

Lindsey Hall: Hi. I'm Lindsey Hall, Head of Thought Leadership at S&P Global Sustainable1.

Esther Whieldon: And I'm Esther Whieldon, a senior writer on the Sustainable1 Thought Leadership team.

Lindsey Hall: Welcome to ESG Insider, a podcast hosted by S&P Global, where we explore environmental, social and governance issues that are shaping investor activity and company strategy. 

Esther Whieldon: Extreme weather events have marked the first half of 2023. There were massive floods in California. India faced its hottest February on record and Spain experienced its warmest ever temperatures this spring. And in June, a series of wildfires across Quebec, Canada blanketed Eastern North America in smoke.

Lindsey Hall: We recently brought you an episode of this podcast about how climate change is exacerbating climate hazards like the Canadian wildfires. And we explored how extreme weather events impact health, business and the economy. We'll include a link to that episode in our show notes. In today's episode, we're turning our attention from North America to Europe...

Esther Whieldon: That's right. This week, we're taking a deep dive into a prominent report published in June on the impact of climate change on Europe. The state of the Climate and Europe report was published in June 2023 by the World Meteorological Organization and the EU's Copernicus Climate Change service, which provides information about the climate in Europe and the rest of the world. We've asked our Europe-based colleague, Jennifer Laidlaw to come and explain more. Jennifer is a senior writer on the S&P Global Sustainable One thought leadership team. So Jennifer, welcome. What did you find out?

Jennifer Laidlaw: Hi Esther. Hi Lindsey. So according to the report, Europe has been warming twice as much as the global average since the 1980s. In 2022, the temperature was about 2.3 degrees above pre-industrial levels. And just to put that into context, Europe would be above the goals of the 2015 Paris agreement on climate change. That agreement aims to limit warming to well below 2 degrees Celsius measured against preindustrial levels, with signatures agreeing to strive for a 1.5-degree goal. 

I spoke to Carlo Buontempo, Director of Copernicus Climate Change Service and asked him if he had been surprised by the report's conclusions.

Carlo Buontempo: When you see this anomalous this really large value, there is a part of each one of us who reacted emotionally and this number triggers that reaction quite easily. But surprised, not entirely. 

So if you look at the projections that were made by climate scientists at the beginning of the century, for the 2020s. Well, they were not far off from what we are saying now. So an example of it is the famous heatwave in 2003. So that was probably the first big wake-up call for Europe in terms of heat wave with a number of extra days initially reported in France and then in the analysis in the various papers and research where it since then actually affecting outgrow the region expanding from Spain to Italy and other country as well. 

Well, at that time, that was really an extreme event. And at that time, scientists said, well, this is an extreme now by the 2020s, 2030s, it will be actually not that extreme anymore and possibly in the 50s, 60s would be actually a cool somewhere. And in that sense, if you look at 2022, which is now the worse record for Europe, that follow in rapid success of the previous warmer, some warmer summer and record towards 2021, this is, in a sense, for the expectations. So not entirely surprised still it is a remarkable warming. And so we need to react to it because the impact are being felt.

Jennifer Laidlaw: All right. And the fact base, it's 2.3 degrees above pre-industrial levels. I mean that's off what the goals of the Paris agreement are. I mean, should we be really scared at this point in time that we are not going to meet the goals of the Paris agreement?

Carlo Buontempo: Well, we have to make some clarity there because the Paris Agreement talks about 1.5 and 2 degrees, and this is the global mean average and it's an average that after is measured over 20 or 30 years. So it's a long-term average. So we released as a climate change service a few weeks ago, just at the beginning of June, we released a press release talking about a couple of days where the global mean temperature exceeded 1.5 specifically that famous threshold. But it was just a single day. And in order to exceed the 1.5 in the terms defined in the Paris Agreement equipment, we don't expect this to happen until the 2030s. 

So I think it's useful to use this threshold because these provide a benchmark, provide a point of reference and so guide our discussion and around climate change and the global disclosure on climate chain. But at the same time, I think we need to keep this in mind. So Europe is warming faster. We have over 2 degrees of warming since pre-industrial level, but this is different from a global average and it's different from the average as defined in the Paris Agreement.

Jennifer Laidlaw: All right. And why is particularly Europe warming faster than the rest of the world?

Carlo Buontempo: That's a very good question, and it's a question that we have been asked by many and for which we don't necessarily have a full answer. 

So the globe is warming up. And by the nature of it, there would be some regions that go faster and some regions that go a bit slower. So there is that element of sampling, if you want, that needs to be factoring as well. 

But if you look at the physical driver, there are a few that may play a role. One is the loss of sea ice. So Sea Ice is important within the domain we consider for Europe. So there is a significant fraction of the European arctic involved in our domain. And this region, as we know, is one of the fastest worming regions in the world. 

So in the statement, we said that Europe is the fastest working continent, but had we included also the Arctic as such but had we included the Artic it would have been on top of the list because the Arctic is really very fast warming. So the loss of sea ice and this warning of the Arctic may well level. 

Another reason for the warming of the continent is the loss of snow and is not only over the sea, but also over land. So Europe has lost very much a great volume of ice in the glaciers, and when you look at the units, if you are not in the field, you may be surprised, because we're talking about hundreds of kilometer cube of eyes that are being lost specifically, almost 1,000 kilometer cube of ice between the time I was at university and now over the last 30 years. So both the sea ice and the glaciers and the snow cover. 

Those are all elements of the climate system that provide some sort of a feedback. So you remove a surface like sea ice or snow that reflects most of the incoming radiation. And by removing of it, you have to expose the bare soil or the ocean that are dara and absorb most of these radiation so exacerbating the world at the local level. So this is also a player. Europe has significant mountain regions, the Alps, the Pernis and in Scandinavia. So many glaciers having melt may have contributed. 

Another the driver of this warning may have to do with the increased aridity over the continent. That's something we have seen in a quite dramatic way over the summer of '22, the heat wave, the drought, the carpet extended also beyond the traditional drought-prone regions of Southern Europe and extending into France, Poland, Germany and the like. And there is this general tendency towards a dryer condition of the surface. 

And again, the water plays an important role in regulating the temperature and removing the water from the surface produces a faster response to the heat. So that's another cost, not unique of Europe, but I think it's probably a combination of this factor. 

Another factor that -- and I stop here, I don't want to make the list too long, but another factor that can quite possibly have played a role over Europe. And this is peculiar of Europe at some extent of North America is the potential impact of air quality legislation. So over the last few decades, the air quality legislation has reduced pollution and in particular, has reduced the amount of particular matter and aerosol in the year. So in some respect, as may atmosphere more transparent, so allowing more radiation to come in. And this may well have played a role in Europe warm faster somehow, while the -- on the other hand of the planet in East Asia, Southern Asia, where some of these legislations are only coming in now. So we're pollution still prevalent, maybe some of the warming has been shielded by this pollution. So a combination of factor.

Jennifer Laidlaw: Carlo went on to explain which European countries might feel the effects of climate change more than others.

Carlo Buontempo: You see regions where you can imagine the Alpine region, where the winters are changing dramatically. And so this has a repercussion on the tourism, has repercussion the ecosystem on fresh water supply and agriculture and so you have other regions where teams is more felt through extreme high temperature and many places in Southern Europe falling that category. We have seen in recent years, New York Extreme temperature at European level being reached in Sicily in Southern Spain. 

And so you can imagine the impact this may have. F rst of all, in terms of health, human health, extreme heat and heat stress but also the repercussion this may have on forest fire. On some aspects, Southern Europe is more at risk. But even if you look back at 2022, we have seen forest fire in regions that are not those that you expect. 

It's in not only the 40 degrees temperature accidents in the U.K., but also forest fire in the U.K. in Western France or in Belgium, in a region where you don't expect for aspire to be such a problem. And still fresh in our memory a few years back when Sweden calls for international help to limit the forest fire and the Greek had to provide their planes in support of Sweden. 

So I think Climate Change is posing a challenge that is very much a global challenge and at European level affect different country, different ways and pose challenges that are new challenges in some respects. So we are very much in an uncharted territory.

We are seeing at the moment what's happening in the North Atlantic, where a very significant parts of ocean top water as a temperature has never had in recent history. We see it with this extreme of temperature was mentioning, we see with the drought and the loss of the ice from the glaciers. 

So each country has its own specific element, but we are really moving into a territory that is new. And in that sense it becomes very important, in my opinion, to use the collective intelligence and information we have about the climate. 

So while this is a massive challenge for humanity, for our society, I don't think we are completely unprepared. We do have our understanding of the climate system. We do have data that describes the climate system and we use -- we can use this information better than we are at the moment to adapt and to prepare for what is coming.

Jennifer Laidlaw: The idea of uncharted territory that Carlo mentioned was something I also heard from Petteri Taalas, who is Secretary General of the World Meteorological Organization. He explained to me how some aspects of climate change have become irreversible. 

You'll hear him talk about the IPCC. -- that's the UN's Intergovernmental Panel on Climate Change. It published a report in March warning that the world needs to act fast to reduce emissions. You'll hear Petteri mention that, too.

Petteri Taalas: So without the impact of climate change, we wouldn't have seen these extremes, for example, in Europe, 10 European countries we're hitting the all-time high in temperatures because of this heat wave. And this is very much thanks to the impact of climate change. 

For example, in U.K. that they broke the all-time high of 40 C last summer during the heat wave, which was hitting most parts of the Central Europe. So this negative trend in weather patterns, including temperatures will continue independent of our success in climate mitigation efforts. And if we are successful in climate mitigation, we could phase out this negative trend in 2060s. 

But there's no return back, to back to so-called good old climate, which we used to have during the last century. Unfortunately, we have already lost the melting of glaciers game and sea-level rise game and the recent IPCC report was demonstrating that the melting of glaciers, especially Greenland and Antarctic Glacier as would continue even for the coming thousands of years. And this sea level rise is an area where we have big uncertainties. 

The conservative estimate is that we would see something like 0.5 meter to 1 meter this century for sea level rise. But if the melting takes place in speedier then than we estimated before. There's even a risk of 10 meters levers by 2,300, so which will be fairly dramatic for many parts of the world. 

So we have plenty of big cities like New York where we are you today is very susceptible to sea level rise. We already saw this with hurricane Sandy when the Southern Manhattan was varied and with 10 meters average leverage, it will be, of course, a major disaster in New York, but also many European cities, many big cities in Asia, Africa, Latin America and of course, island states and low-lying countries like Bangladesh or Netherlands would be really in trouble.

Lindsey Hall: Now Jennifer, Petteri mentioned climate change mitigation would help limit some of the impacts of climate change. Did you explain how that might work?

Jennifer Laidlaw: So I asked him what steps when needed to slow down the pace of global warming.

Petteri Taalas: So the biggest emissions are coming from energy production where we have to have to start using more solar and wind energy, and also nuclear energy. And then we have to get rid of gasoline in ground transportation and start using more electric vehicles, Hydrogen is coming on the market. And then we also have tackle ome industries like cement production and steel production where very big emissions are happening. 

And also in, for example, steel production, we have no means to be -- to produce steel without emitting carbon dioxide to the atmosphere. So these kind of, those 3 sectors are the most important ones. 

And in our everyday diet, we could eat less cow meat, which is causing these methane emissions and also rising consumption is causing methane emissions. And actually, we could be successful in climate mitigation by changing our everyday lives only a little. So the -- we just had fairly dramatic changes in our everyday life because of the COVID compared to climate mitigation needs that there are only minor things needed in our, minor changes in our everyday life, needed to be successful in climate mitigation.

Jennifer Laidlaw: The state of the climate in Europe report also explained how demand for renewable energy like wind and solar is on the rise. So I ask Petteri what impact that might have on climate change in Europe.

Petteri Taalas: So we have to replace our fossil energy production systems with renewable energy with nuclear and also hydropower and also means to save energy are most welcome to be successful in climate decarbonziation. 

But the good news in Europe is -- and also what's happening in the United States at the moment is that more and more in is produced by using wind and solar energy, which are the most profitable ones also for the investors. And we are using less and less fossil fuels. 

And this should happen worldwide, and it's also happening worldwide, also in, for example, African countries, they are investing a lot in solar and wind energy. And also China has invested a lot, and the challenge is to get rid of coal-fired energy production and replace it more renewable energy, but also in countries like China and India, there's a need to build nuclear power plants because the energy demand is so high.

Jennifer Laidlaw: I was interested in Petteri's comments by nuclear energy because I had read in the report that Extreme heat was one of the biggest causes of outages at nuclear plants in Western Europe. How would we deal with that in a changing climate, I asked him.

Petteri Taalas: That's a good question. And actually, it's hitting 3 sectors of energy production. Of course, hydropower production is in danger if we are going to have less water in rivers, which is likely to happen in some parts of the world. 

And then also this classical fossil fuel-based power plants need cooling power and once we have less water in rivers and the water is warmer, it's a challenge for the cooling power and same is true for the nuclear power plants. This is also true for nuclear power plants, which rely on river water, we have to ensure that there's enough cooling water for those power plants. And of course, those which are located in the coastal areas, so in the lake side, it's a different story. But we have to also look at the climate scenarios. So from that perspective, whether it makes sense to build more power plants by the rivers, especially what's going to happen in the future when it comes to availability of the cooling water.

Esther Whieldon: We've heard about the extreme weather Europe is phasing and the steps we can take to address global warming. So Jennifer, did you get any sense from the report about what we can expect in near term in Europe in terms of the climate?

Jennifer Laidlaw: Yes I did actually. Here's Carlo again with the details.

Carlo Buontempo: Well, the beauty of climate and weather is the fact that we don't know exactly what will happen. And so we need to work on it so much. But there are some big forcing big layers that whose behavior we can somehow predict and which will have an impact on, big drivers. 

But if you look at the seasonal predictions of what the balance of probability with respect to some of the key variable of climate over the next few months, we know that -- or the prediction seems to indicate there is a higher-than-usual probability of having a wetter than usual summer over Southern Europe, and there is not too much of a signal over Central and Northern Europe, so difficult to say. 

So in terms of temperature its somewhat easier because we cannot really predict what's happened from year to year in the seasonal prediction, but we do know that there is a clear tendency towards warmer summers. So we don't know whether this summer will be yet another record, it's too early to say. But on average, the average temperature of the summer of the next 5 years, let's say, would be very likely higher than the average temperature over the last decades. So in that sense, if you were a gambler, I will probably suggest you to bet on the warming summer because you have higher chance to get it right.

Lindsey Hall: The report headline figures are somewhat alarming, but I was struck also by the fact that it suggests solutions to tackle climate change.

Jennifer Laidlaw: Yes. Carlos says we do have an understanding of the climate system and we can improve the data we already have to help us prepare.

Esther Whieldon: Thanks, Jennifer, for talking with us today about the report and helping us understand some of the key issues Europe is facing in terms of climate change.

Jennifer Laidlaw: You're very welcome.

Lindsey Hall: Thanks so much for listening to this episode of ESG Insider and a special thanks to our producer, Kyle Cangialosi. Please be sure to subscribe to our podcast and sign up for our weekly newsletter, ESG Insider. See you next time.

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