The IPCC AR6: consequences for municipalities

ABSTRACT

This report looks at the consequences of the recent IPCC synthesis for municipal authorities in their longer-term planning. Although the main focus is Sweden, the report should be relevant to municipalities in other countries. It suggests that given the warming already locked in, as well as the lack of measures in place, municipalities should prepare for weather pattern instability as well as to be ready for fast changes in political will. The report suggests following the advice of strategist Igor Ansoff to set up capabilities to deal with a turbulent operating environment. This includes capability to monitor the situation, work with a range of scenarios and to ensure the organisation is agile enough to deal with unexpected changes, be they physical, social or political. The report suggests municipalities address three basic strategic questions covering global inaction, energy transition and food provision. It proposes a holistic approach analysing each measure to address climate instability on several dimensions to avoid, among other things, adaptation putting unfair pressure on the poorest.

This report is available to download in a Swedish version (.pdf).

IPCCs Rapport AR6.
Strategiska konsekvenser för kommunförvaltningar
Ladda ned pdf.

The IPCC report

The synthesis report from the IPCC landed on people’s screens on 20 March 2023 with a 36-page summary for policy makers and a shorter set of main headlines.

For any municipality – especially a municipality that aspires to be part of a circular economy, it can be a daunting task to take in the breadth and depth of the report, reconcile it with what is happening at global and national level and draw conclusions about where to develop municipal policy.

This report tries to offer some help along the way by identifying the questions to ask when forming a strategy to deal with the consequences.

The Paris agreement and NDC

According to the Paris agreement, each country has its own NDC – Nationally Determined Contribution. To this, Sweden has committed to net zero by 2045.

Million tonnes CO2 project changes to 2045

The graph above attempts to conceptualise the basic plan for Sweden: to continue to use the forest for biofuel whilst de-fossilising transport and reducing other emissions to the level of forest CO2 accumulation. Note that the CO2 uptake from Swedish forests is around 160 million tonnes per year, but some 110-120 of this goes into short-term products and biofuel. Just now, the plan is not to reach net-zero via forest conservation.

In actual numbers, the diagram below shows the scale of the ambition.

Firstly, what does the report actually say that affects operations in the municipality?

Three major conclusions from the report should inform municipal climate strategy.(The relevant statements in the AR6 headlines are included in brackets.)

The current measures in place will not take us below 1.5° of warming, the outer limit of safety for weather pattern destabilisation, rather unless there are new measures in place this warming will happen.(A:3,A:4)
Fossil fuels are the main source of the extra carbon in the atmosphere and they are close to warming the planet to an extent that the relatively stable weather patterns we have experienced for the last 10,000 years plus are at risk.(B:5)
Food production is a major risk. Even if weather patterns in one country have improved food production, the food system is global and shortage in one area will affect the food system as a whole as well as causing inflation from rising costs.(B:2,C:1)

Consequences for Municipalities

Before we go into detail discussion of the main headings above, we need to discuss general strategy. Strategy must be crafted to fit the situation and the world around. A strategy is formulated to answer the question: given the situation, what do we need to do more/less of and start/stop doing?

1)The current measures in place will not take us below 1.5° of warming: The strategic consequences (A:3, A:4)

It’s perhaps an understatement to say, despite the obvious progress since the IPCC began, that political will to adapt in a timely way to climate warnings has been lacking, and still is. Judging by the installed base of greenhouse gas (GHG) – emitting infrastructure, without radical changes the threshold for weather pattern stability will be breached.

As weather patterns destabilize, the results become much more unpredictable and the speed of changes become faster. Igor Ansoff, often called the father of strategic management, described this situation as reaching turbulence. A short recording of him presenting it is here.

Ansoff suggests that an organisation that needs to adapt to turbulence should develop the capability to assess, monitor and respond rapidly to changes as well as the capability to deal with an increasing number of novel challenges. Indeed, in the business world this is nothing new. New technology has changed business environments overnight and companies have been forced into dealing with the unknown. As we draw closer to climate tipping points even local authorities will be meeting turbulence challenges. (Link to a website dedicated to his work.)

The diagram above comes from Ansoff’s book. The organisation should first assess the level of turbulence in their operating environment, as well as their expected future operating environment.

Complete a strategic gap analysis

Ansoff introduced the concept of “strategic gap analysis”. He believed that turbulence creates a strategic gap between an organisation’s current and desired future state, and that organisations must bridge this gap by adapting their strategies. High turbulence needs a proactive approach, not waiting for external changes to happen, but instead, anticipate and prepare for them in advance.

Organisations should be willing to adjust their strategies in response to changing conditions and should have contingency plans in place to deal with unexpected events.

Scan for changes

This means continuously scanning for changes and trends that could impact operations. Municipalities should gather data, conduct analysis, and develop scenarios to help them anticipate potential disruptions and identify opportunities arising from the changed situation.

Operations that aim for high efficiency are particularly vulnerable to increases in turbulence. For example, just in time is particularly efficient, but when supply chains get affected, the organisation’s ability to deliver are hampered. As turbulence increases, the focus should turn from efficiency to resilience.

Develop scenarios and synergy

To be prepared when changes are discovered, organisations need to develop scenarios. These help anticipate potential disruptions and identify opportunities for synergy. Ansoff recommended that companies focus on building synergy across different parts of their organization. He believed that organisations could leverage their strengths and capabilities to create value and mitigate turbulence in the environment.

There is a gap between the warnings given by science and the inertia in the political system as well as in transitioning the operation of societies. This calls for maximum agility from municipal authorities and indeed local politicians: to monitor changes, to be prepared to deal with the worst effects of climate change whilst being prepared to introduce rapid transition as soon as the political situation changes.

Question one: Given that current measures are insufficient to stop warming, the political climate and the relatively small size of a municipality, how can the municipality create the capability to monitor and deal with the effects of changes in weather patterns and changes in opinion?

2) Fossil fuels are the main source of the extra carbon in the atmosphere: the strategic consequences for the municipality. (B:5)

Diagram: Sweden’s sources and uses of energy: statistics from Naturvårdsverket, SCB, diagram, the author.

Transport

In Sweden, the main use of crude oil and petroleum is in transport, sixty three percent is for private cars. Coal and coke are used in manufacturing and housing, the latter mainly for heating.

Two of the main drivers of demand for private car mobility are the absence of proximity to work and basic services as well as the absence of more environmental and efficient alternatives.

Question two: Given that the largest use of fossil fuel in transport is the private car, how can municipalities adapt planning strategies to reduce mobility demand and offer environmental and more efficient alternatives?

Housing

Even though Swedish buildings have traditionally been well-insulated, the stock is still driving energy use. Modern insulation techniques offer even higher levels of efficiency. With the risk of energy prices soaring, itself crippling the economy, municipalities need to explore strategies to bring energy use in heating down.

Question 2B: Given that buildings still use fossil fuels for heating, and that energy price shocks can damage the economy, what strategies can the municipality adopt to accelerate insulation and energy-positive buildings?

Manufacturing

Great strides have been made in using renewable energy in manufacturing. However, manufacturing still uses large amounts of energy in general, and especially the steel industry uses large amounts of coal and coke. Product life drives demand for manufacturing, and one strategy to reduce manufacturing would be to increase product life.

Question 2C: Given that the longer the lifetime of a product, the fewer fossil fuels needed in manufacture, which strategies can municipalities adopt to stimulate product longevity?

3) Food production risks: consequences for strategy.(B:2,C:1)

IPCC warns that disrupted weather patterns threaten food production and could cause food shortages. Even if weather patterns in one country improve food production, the food system is global and shortage in one area will affect the food system as a whole. Perhaps even in the best case, that food production is only mildly affected, we can expect food prices to rise bringing challenges to the economy.

Food provision is a category of commodities all of its own. Being a basic human need, food shortages immediately drive inflation and hit the poorest. Without adequate food, a society cannot find the energy to respond to other challenges.

Increase in turbulence puts pressure on the municipality to monitor the food situation carefully, especially the effects of changing weather patterns, and to develop scenarios and increase preparedness for shortages.

Question three: Given that food shortages are likely as a result of global warming, and that global warming will not likely be halted, what strategies can the municipality adopt to ensure a greater resilience in food provision?

Inequality

In most societies, when rapid changes happen and in cases where the economy shrinks, the poorest are the first to suffer and suffer disproportionately compared to the better-off. The political consequences of dealing with the effects of climate destabilisation could be vast.

In the strategic gap analysis, it would be helpful to add an equality dimension.

One such gap analysis to start with would be to assess the current capability for dealing with the consequences of weather pattern disruption.

Diagram: Strategic gap analysis, the size of the arrow indicates the size of the gap. (Illustration only.)

For each dimension of strategic preparedness the municipal organisation identifies, municipalities should identify scenarios for each dimension and which data to collect to monitor for changes that would trigger a need for an early response.

The first dimension, NDC, and system transition are especially sensitive to political ambition.

Dealing with the scale of challenges from weather pattern disruption

A municipality’s built capital, its investment in infrastructure, drives its carbon emissions for many years into the future. For instance, organisations that have invested in internal combustion vehicles expect them to last for several years. Heating plants powered by oil have a much longer life-time. Even district heating plants that run on wood drive deforestation and reduce carbon uptake. The investment required to bring a society to net zero is therefore formidable.

Developing an organisation’s capability to deal with turbulence is however, at least initially, less of a challenge as monitoring data, creating scenarios and identifying organisational capability require little capital investment.

Given the size of investment involved, it would be prudent, at least as a desk exercise, to attempt to identify the largest carbon-emitting infrastructures both within the municipal organisation and within the geographic area. Some will be low hanging fruit, others will require major changes, and there might not even be technical solutions available.

Question four: Given the largest greenhouse gas driving infrastructure installed in the municipality: what is its lifetime, can it be modified or does it need replacing? What is the potential investment required to reduce its footprint?

The circular municipality

In Sweden at least, the government has identified the circular economy as being a strategy to defossilize and mitigate future resource shortages. A circular municipality would prioritise implementation of circularity for those aspects for the economy that provide basic services, entail large amounts of material, often of low value, used frequently. The table below illustrates how the analysis might work: identifying circular flows (to-from-and back) and identifying the infrastructure (and investment) needed to create a circularity.

Summary

The IPCC report gives a high level of probability to countries lagging behind on greenhouse gas emission reductions and warn that planetary warming will create unstable weather patterns as a result. The instability will damage economies and threaten lives. Given that political will is universally lacking to make the changes necessary to reduce greenhouse gases in time, municipalities should frame their long-term strategies and organise to be able to better meet the increased turbulence in the environment. This includes identifying the strategic gaps they face, working out how to monitor the speed and size of changes occurring, attempting to foresee possible scenarios, infrastructure investment, as well as building an organisation that is sufficiently flexible and agile to respond.