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More than 70% of critical minerals key for the net zero energy transition at risk from climate disruption: PwC 2024 Climate Risks to Nine Key Commodities Report
According to the analysis, even if global carbon emissions rapidly decrease (low emissions scenario), 87% of the world's rice production, more than 70% of cobalt and lithium production, and around 60% of the world's bauxite and iron production will be at risk by 2050.
Importantly, these risks can be managed - and 47% of CEOs say they are already focused on protecting their workforces and physical assets from climate risk.
Emma Cox , Global Climate Leader, PwC UK, said:
By 2050, even if the world sharply reduces its carbon emissions, over 70% of cobalt and lithium production could face significant, high, or extreme drought risk – up from near zero today. Less than 10% of copper production faces significant or greater drought risk today, rising to over half in a 2050 low emissions scenario and over 70% in a high emissions scenario. Cobalt, copper and lithium are integral to electronics and clean-energy technologies.
All three crops (wheat, rice, maize) face growing risks from both heat stress and drought. Taken together, these three crops account for 42% of the calories people eat. The most widespread and serious risk is to rice, around 90% of which will face significant or greater heat stress risk by 2050 in a high emissions scenario. Currently, over 75% of rice is grown in conditions of significant or greater heat risk, showing that it is not just the level of risk that matters, but also how well producers are prepared to adapt. Drought risk is also increasing sharply for key crops. Currently, around 1% of maize and wheat face significant drought risk, rising to more than 30% and 50% respectively in a 2050 high emissions scenario.
PwC research finds that vital metals face increasing amounts of risk. In particular, over 60% of the world's bauxite and iron production may face significant or greater heat stress risk by 2050, even in a low emissions scenario (up from 30-50% currently). In a high emissions scenario in 2050, 40% of the world's zinc production may face significant or greater drought risk (up from zero significant drought risk currently). Aluminium (from bauxite), iron and zinc are widely used in manufacturing, transport, and infrastructure.
Production of all nine critical commodities is also concentrated in a limited number of countries – many of which face increasing climate risks. For each resource, at least 40% - and as much as 85% - of its global supply is produced from a distinct set of no more than three countries.
Companies and CEOs are increasingly recognising the impact of climate disruption and taking action. Already, 47% of CEOs have taken proactive measures to safeguard their workforces and physical assets from climate change, according to PwC's 2024 Annual Global CEO Survey . However, more needs to be done if the global economy is to adapt to climate risk:
Will Jackson-Moore , Global Sustainability Leader, PwC UK, concludes:
PwC's report – – analysed nine commodities crucial to the global economy and their risk exposure to drought and heat stress. Risk was categorised as significant, high or extreme. Heat stress risk is categorised based on durations above Wet Bulb Globe Temperature (WBGT) limits. WBGT reflects the combined impact of temperature and humidity. Drought risk is categorised based on the percentage of time spent in severe drought over a 20-year period. Exposure of key mines and farms critical to the production of the nine commodities was assessed relative to climate-related drought and heat stress at a present-day baseline and in two future years: 2035 and 2050. For 2050, we examined how risk exposures vary depending on how effectively the world reduces its carbon emissions by comparing low vs high emission scenarios. While our approach provides a useful insight into how different commodities may become more exposed to different climate perils in the future, there are a number of limitations. These include that we do not estimate potential changes in production and we cannot predict future actions to adapt. You can read the full report, and learn more about key takeaways for climate risk adaptation on www.pwc.com
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