Gro’s 2024 Watchlist: 3 Forces Shaping Global Climate Risk in the Year Ahead

2023 was the hottest year in history — a year marked by a record number of billion-dollar-plus climate-related disasters, including wildfires that devastated communities on Maui, and forest fires across Canada that sent smoke billowing over much of North America. 

In 2024, Gro expects global average temperatures will continue to rise, potentially triggering further growth in extreme weather events. Disaster risk — from heat waves and drought to flooding and wildfires — will vary around the world, depending on such factors as a probable transition from El Niño to La Niña later this year.

Meanwhile, government and business policymakers will continue efforts in 2024 to mitigate climate warming, especially in the EU, where new corporate sustainability and climate impact reporting requirements take effect. US regulations on climate change, however, will largely remain on hold during this presidential election year. 

You can read here about the predictions Gro made for 2023 global climate policy, and how our predictions panned out. 

Gro’s ensemble of climate models and applications — including the Gro Drought Index and Gro Climate Risk Navigator — allow users to anticipate the impact of weather events on agricultural production and business infrastructure. A recent addition to our climate ensemble is the Gro Fire Weather Index, which gauges how susceptible a location is to wildfire and forecasts future wildfire-risk conditions.

Climate risk is widely recognized as a business and financial risk. At Gro, we have the data and analytics to help financial institutions, governments, and corporate risk managers identify, address, and adapt to a warming climate and its many effects. Gro is the only platform showing the dynamic impact of climate, economic factors, and agricultural systems on each other.

Here are Gro’s forecasts for three major forces shaping global climate risk in 2024:

Climate Change Manifestations Will Have Wider Impact

Global average temperatures reached record highs in 2023, and are already exceeding those levels so far in 2024, according to Gro’s Climate Risk Navigator. Climate scientists widely expect 2024 overall will be hotter than 2023. With that will likely come a continuation, and likely increase, of last year’s record-setting number of climate-related disasters. 

• 2023 global average temperatures fell just shy of exceeding the 1.5C of average temperature rise that was the focus of the 2015 Paris Accords. While it’s uncertain when the 1.5C level will actually be breached, the World Meteorological Organization assigns a 27% chance that this will happen in 2024, and a 66% chance for it over the next five years.
• Impacts of a “greater than 1.5C” world are expected to include increased drought and wildfire risk as well as greater risk of vector-borne diseases such as malaria and dengue fever, among other effects. These impacts were detailed in the IPCC’s 2018 Special Report on Global Warming of 1.5°C.
• 2023 brought a growing number of extreme weather and climate events, a trend that is likely to continue in 2024 as global temperatures warm further. The US experienced a record number of billion-dollar-plus climate-related disasters in 2023 — 28 of them last year, versus 22 in 2022 and an average of 9 for 1980-2023. 

While wildfire risk will ebb and flow for any given location depending on short-term conditions, the longer-term risks of wildfire trend upward under several future climate change scenarios. 

• Gro’s newly launched Fire Weather Index tracks environmental conditions to gauge how susceptible a location is to wildfire; it also projects future wildfire-risk conditions based on five climate-change scenarios. Gro’s Observed Fire app shows where fires have actually broken out. 
• For example, Chile showed record high levels on the Gro Fire Weather Index for much of January — as seen in this Gro display — ahead of wildfires that turned deadly and left thousands homeless. 
• In Australia, Observed Fire activity spiked in August 2023 and remained above average into November, likely triggered in part by warmer and drier weather brought on by El Niño. Over the longer term, Fire Weather Index values for Australia are projected to rise significantly by 2050 under the IPCC SSP3-7.0, or “medium-to-high,” warming scenario, as shown in this Gro display. 

Gro’s Fire Weather Index tracks environmental conditions to gauge how susceptible a location is to wildfire; it also projects future wildfire-risk conditions based on various climate-change scenarios.

Tougher Climate Policies in the EU, Stasis in the US

Gro expects Europe in 2024 will continue to be the only major global economy to systematically pursue mandatory climate policies designed to achieve net zero emissions by midcentury. After significant legislative enactments over the past 18 months, 2024 is a year where compliance pressure is building.  

• Most large European companies in 2024 will be required to file end-of-year corporate sustainability disclosures pursuant to the EU’s new Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS). 
  • The ESRS requires a wide range of reports including risk assessment, controls, and metrics regarding greenhouse gas emissions and other pollutants, water use, and impacts to terrestrial and marine ecosystems and their biodiversity, among other details. 
• 2024 will also be the first full year that companies selling products like iron and steel, aluminum, cement, electricity, and fertilizer into the European market will be required to disclose and report “embedded carbon emissions” pursuant to the EU’s new Carbon Border Adjustment Mechanism (CBAM).  
  • The CBAM is designed to place “fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU,” where the bloc’s Emissions Trading System (ETS) prices carbon on domestic production. 2024 and 2025 are “reporting only” years, with import fees to be levied starting in 2026.
  • China, India, and some European industry groups are lobbying the EU to slow its planned CBAM implementation on concerns the program, which only covers imports, could negatively impact EU exports.

In the US, Gro expects climate policy and action in 2024 will be delayed because of the November presidential election. 

• The Democrat-Republican partisan divide on climate will likely keep the Biden Administration from issuing any major new climate-related policies or regulations until mid-November at the earliest. Biden, the presumed Democratic candidate, will continue to campaign on his success passing the Inflation Reduction Act of 2022.  
• If Donald Trump becomes the Republican candidate, he will bring with him stated commitments to accelerate fossil fuel production and to dismantle most federal climate policies and regulations.