Why Saving the Climate Requires a Tough Taxonomy: QuickTake

Floods, droughts and food shortages are just some of the effects of climate change, while exploitation and corruption drive social injustice around the world. Governments tackling these issues are realizing that to solve them, they need first to define and measure them. Some are turning to so-called taxonomies that establish which economic practices and products are harmful to the planet and which aren’t. The idea is that the price of goods and services must reflect the human and environmental cost of both production and disposal, which in turn would spur much needed change. But designing a code is fiendishly difficult. For instance, in August 2022, it was reported that a taxonomy focused on social questions had been shelved indefinitely by the European Commission, the executive arm of the European Union.

They’re essentially systems for organizing information, and form the basis of codes for sustainable corporate conduct and investing. Those that already exist focus mostly on environmental risks, and are based on research by scientists backed by the United Nations. When the 2015 Paris climate accord was struck, its roughly 200 signatories acknowledged that action must be taken. The average global temperature is already 1.1 degree Celsius (2 degrees Fahrenheit) higher than it was before the industrial revolution. Scientists say the limit is 1.5 degrees Celsius, beyond which lies climate catastrophe. Taxonomies provide a detailed guide for which activities jeopardize climate goals and which support them.