In January 2024, the Copernicus Climate Change Service, which is the European Union’s (“EU”) climate change monitoring organization, published the Global Climate Highlights 2023 report. According to the report, 2023 was recorded to be the hottest year in the past 100,000 years. Global temperature rose by about 1.5°C for more than half of 2023 compared to that of the pre-industrial period (1850-1900s). The main cause of the rise in global temperature appears to be the greenhouse gas (“GHG”) emitted from industrial activities and our daily lives.
Such rise has caused unprecedented heat waves, heavy rains, and forest fires, threatening global productivity and food prices. In particular, abnormal weather conditions have ruined harvests, causing grain prices to soar, which in turn reduced exports from major agricultural countries that have temporarily banned exports to secure their own supplies. According to the researchers at the University of Delaware that analyzed the papers published between 2012 and 2022, the worldwide GDP loss from climate change in 2022 is estimated to be approximately KRW 1,940 trillion.
Global health is also on alert. According to a study published in an international journal “Nature” in April 2022, climate change is expected to cause more frequent shifts in the habitats of mammals, resulting in 123,000 new contacts among different species and 4,600 additional pathogen sharing cases by 2070. In other words, as the Earth’s temperature rises, more animal species will experience new contacts with other species, which will likely cause one additional pathogen sharing case every three to four days. This means that the incidence of zoonosis caused by sharing of viruses between animals and humans could also increase. According to a paper published by a US biotechnology company called Ginko Bioworks in November 2023, an analysis of the outbreaks of four zoonotic viruses (e.g., Ebola and COVID-19) between 1963 and 2019 showed that the number of outbreaks increased by 5% and the number of deaths increased by 9% every year. Further, the number of deaths in 2050 is expected to be about 12 times that of 2020.
This is why experts in various fields across the world ranked “extreme weather events” as the “greatest threat to mankind in 2024” in the “Global Risks Report 2024,” which was published in January 2024 along with the Davos Forum. In addition, the gap in the rankings compared to the second place (i.e., “fake news from AI”) and third place (i.e., “social and political conflicts”) was not insignificant.
Korea is perceived to be in a more dire situation. In August 2023, a research team from the University of Chicago Graduate School of Business analyzed the carbon emissions of approximately 15,000 listed companies worldwide and found that the carbon damages cost (i.e., social cost to treat 1 ton of GHG, which is USD 190/ton) accounts for 44% of a company’s operating profit on average. Moreover, Korea has the largest proportion of carbon damage cost to operating profit.
Thus, this Climate Insight will examine notable issues for 2024 based on the trends from 2023 in responding to climate change as well as considerations for companies to reduce carbon emissions in good faith.
