By Lynn Tan
CNN • Updated 17th January 2018
The sector with the biggest weight in the UN Framework Convention on Climate Change now takes key steps toward reducing greenhouse gas emissions by at least 25% below 1990 levels.
The Paris Agreement entered into force on November 4, 2016, which led to countries agreeing to a “intended nationally determined contribution” to combat climate change of limiting global warming to “well below” 2 degrees Celsius, and pursuing efforts to limit it to 1.5C.
The insurance industry has become the biggest carbon trader. The global reinsurance market is one of the fastest growing and the insurance sector has become the biggest carbon trader.
As one of the 10 business sectors with the greatest impact on climate change, the travel and tourism industry will continue to play a crucial role in the fight against climate change.
The report outlines the steps the industry needs to take to help speed up climate action. Below is an overview of these recommendations by priority industries.
The percentage of the industry’s emissions from buildings and property cover remains surprisingly low, at 5%, but this gap is not likely to be closed any time soon. In the transport sector, emissions from road transport and aviation have climbed from around 1% of the industry’s total emissions to nearly 2% of total emissions within five years.
Instead, the industry should focus on taking effective actions to reduce emissions from major sources, such as intercity bus transport, aviation and power generation, where low single-digit percentages of total emissions still exist. The insurance industry is committed to meeting all compliance requirements outlined by the Paris Agreement, but it is unclear whether the insurance industry will be able to achieve its stated objective of reaching 25% below 1990 levels of carbon emissions by 2025.
The global reinsurance market is one of the fastest growing and the insurance sector has become the biggest carbon trader.
Leisure and Recreation
One of the largest sectors in the travel and tourism industry is leisure and recreation, comprising hotels, airlines, tour operators, and amusement parks, meeting and events and culture and heritage. It is estimated that the leisure and recreation sector accounts for an estimated 4% of global emissions of carbon dioxide equivalent (CO2e). There are signs that tourism is increasingly a driver of other related industries and thus contributes to greenhouse gas emissions.
More sustainable tourism strategies, especially at the national level, are required to capture the full benefits of tourism, instead of compromising them to stimulate economic growth.
Globally, carbon has become a major concern for banks. The ownership structure of many banks has an aviation-focused portfolio while emissions from the banking sector represent only around 5% of global emissions. However, this is changing as part of the industry’s broader move to become more environmentally responsible. Banks can help low-carbon sectors invest in renewable energy and green infrastructure, and they can lead the way on sustainability in the industry.
Food and Beverage
Only 6% of global food and beverage sector emissions are likely to be reduced through transportation. To fully deliver the benefits of sustainable tourism and agriculture, it is essential that the majority of agricultural emissions are in commercial, residential, retail and industrial areas. The industry can take effective actions to reduce emissions from production and handling practices, especially where there are high building and transport emissions of equivalent size.
A study by the Institute for Business and Environment analysis concluded that building construction emissions are the largest single source of greenhouse gas emissions in the US (2.2% of global emissions). For example, cement emissions represent 11% of building-related CO2e emissions.
The amount of C02e emissions from the construction industry has grown by 50% since 1990 and the industry is now one of the largest sectors in the UNFCCC. Furthermore, low-emission building construction strategies will be the only way to reduce emissions sufficiently.
Taxis and Drivers
The rising popularity of taxi apps has pushed down the number of emissions from taxi vehicles, but the sector still accounts for nearly 2% of global CO2e emissions. It is estimated that the industry emitted 1.7% of global CO2e in 2016. To meet all the obligations laid out by the Paris Agreement, it is essential that the industry drastically reduce its emissions from taxi fleets.
China, Australia and the UK
As countries lead the charge to combat climate change, they have been keen to promote themselves as forward-thinking countries that share the vision of the United Nations Framework Convention on Climate Change (UNFCCC). However, only a few countries have made major emissions reductions of around 25% below 1990 levels.