- Video
- Global Research
- Demographics
- Disruptive technology
- Energy transition
- Future cities
- Future consumer
- Future transport
Gamechangers: How nine themes can tackle climate change
- With climate change set to be the defining topic of this century…
- …we see a transformation in how our societies and economies are structured…
- …and nine themes playing a key role
Climate change is highly likely to be the defining topic of this century. The impact of rising global temperatures is already becoming abundantly clear after record-breaking global heat in 2023. The increased frequency and severity of extreme weather events, such as heat waves, flooding and wildfires, can have huge social and macroeconomic implications.
As climate events become more common and severe, this impact should only get bigger. But all is not lost. There are many reasons to be optimistic that the world can act in ways that reduce the risks from higher global temperatures.
Some of this involves significantly accelerating mitigation action – trying to increase the pace of emissions reductions – while some will involve adaptation: making the world more resilient in the face of climate changes. This calls for a transformation of how we consume and produce, how our societies and economies are structured, and how we live our lives.
Climate change calls for a transformation in how we consume and produce.
In Global Research, we view today’s world of disruptive, complex and rapid change through the lens of nine themes*. We think these nine themes will play a key role in how the world responds to and evolves amid climate change in the coming years.
Future cities are central to the climate challenge. With the UN projecting that nearly 70% of the global population will live in cities by 2050, these urban areas will both be a hub of innovation and low-carbon activity, central to the mitigation and adaptation response across the world.
Future transport is likely to involve a revolution in mobility, including more mass transit, urban designs that make walking and cycling more viable, and electrification of all forms of road-based transport including cars, vans and trucks.
Demographics will be impacted by the risk of much higher rates of migration. We could see some dramatic changes to demographic projections if more people are displaced by extreme weather events or higher temperatures.
The future consumer will likely be one prioritising sustainable products and practices, creating fertile ground for a greater role of re-use, second-hand products and the circular economy.
Energy transition is the most obvious theme linked to climate change mitigation as underpinning all of this will be the need for clean, reliable and low-cost energy, while ensuring energy security. While there is much work to do, there are reasons to be optimistic here, with the transition to low-carbon electricity generation in many economies arguably passing a tipping point where deployment is likely to continue to accelerate.
The transition to low-carbon electricity generation in many economies is arguably passing a tipping point.
Automation and robotics in industry could play a key role in decarbonising the economy. The efficiency of both capital and labour are likely to be transformed, with production having a far less damaging impact on the environment, climate and biodiversity.
Disruptive technologies that allow us to use less water, tackle transportation issues or create more virtual environments that lower the need for air travel could also support decarbonisation.
Digital finance will be key in terms of allowing more people access to funding in some of the most climate-vulnerable parts of the emerging world, helping to finance the mitigation and adaptation action that will drive emissions lower and increase resilience.
And when it comes to lower for longer , if de-carbonisation is mainly debt financed, it adds to the already large debt burden for many sovereigns. If the causality remains the same as the last three decades, it will likely have an impact through the debt servicing channel, weighing on future GDP and neutral rates.
The rationale to act to drive mitigation and adaptation investments is clear and HSBC’s nine themes are inextricably linked to making these investments happen. Climate change and the battle against it are set to reshape the economic landscape in the years to come.
Would you like to find out more? Click here* to listen to a special edition of the Macro Brief podcast from HSBC Global Research, in which James explores the interplay between climate change and the nine themes.
You can follow the Macro Brief on Apple and Spotify, or wherever you get your podcasts.
To learn more about HSBC Global Research, email us at askresearch@hsbc.com
*Please note that by clicking on this link you are leaving the HSBC Global Commercial Banking Website, therefore please be aware that the external site policies will differ from our website terms and conditions and privacy policy. The next site will open in a new browser window or tab.
The following analyst(s), who is(are) primarily responsible for this document, certifies(y) that the opinion(s), views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: James Pomeroy
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