What is meant by ‘stock’ and ‘flow’?

Economists often describe climate change as a ‘stock-flow’ problem. This refers to the fact that the greenhouse effect, and in turn climate change, depends on the concentration of greenhouse gases such as carbon dioxide in the atmosphere – the ‘stock’ – while the thing humans can control as a response is the rate at which additional greenhouse gases are emitted – the ‘flow’. The total stock of atmospheric greenhouse gases depends on the difference between man-made emissions and the natural removal of greenhouse gases from the air, particularly by oceans and plant life.

Imagine a bathtub. The tub itself represents the atmosphere and the water it contains represents the stock of greenhouse gases. The taps represent man-made emissions, from burning fossil fuels for example, while a slow-draining plug represents the natural removal of greenhouse gases, by trees ­­for example. If the taps are left running and the plug can only drain the liquid away slowly, the volume of water in the tub will increase. That’s what is happening at present: humans are adding greenhouse gases to the air faster than natural processes can remove them. The result is an increasing stock of greenhouse gases and, in turn, rising temperatures.

What should be done about this problem?

To limit man-made global warming, the world needs to stop the atmospheric stock of greenhouse gases from increasing. This requires emissions to be reduced until they balance with the rate of natural removal from the atmosphere. At this point the atmospheric stock is stabilised, which is why many economists and scientists talk about targets for ‘stabilisation’.

The lower the level at which the atmospheric stock of greenhouse gases is stabilised, the greater the chance the world will have of meeting the target of the 2015 Paris Agreement of keeping temperature rise this century below 2°C above pre-industrial levels while making efforts to meet a 1.5°C target.

Another way of thinking about this, which has become prominent in recent thinking, is the concept of a ‘carbon budget’ which estimates the total emissions that are permissible under an agreed climate objective.

How is the world doing in meeting the Paris Agreement temperature target?

To meet the 2°C target, scientists stated that annual emissions should reach their highest level by 2020. While global CO2 emissions declined by 5.2% in 2020 due to the Covid-19 pandemic, they rebounded by 6% in 2021, in line with global economic recovery, to reach their highest ever level. Coal accounted for over 40% of the overall growth in global CO2 emissions in 2021. The Intergovernmental Panel on Climate Changes says that limiting warming to around 1.5°C requires global emissions to peak by 2025 at the latest and to be reduced by 43% by 2030.

There is a growing gap between commitments and actual emissions reductions, which means accelerated action is needed if the Paris Agreement temperature target is to be met. The United Nations Environment Programme’s most recent assessment of what countries are doing states that the new mitigation pledges for 2030 made in 2021 by 120 countries show some progress, but their aggregate effect on global emissions is insufficient: global warming is estimated at 2.7°C if all unconditional pledges are met, and 2.6°C if conditional pledges are also met.

This Explainer was updated in July 2022. The original version was a reproduction of the following article: Why does climate change get described as a stock-flow problem? © The Guardian, 2012, used under a Creative Commons No Derivative Works licence.

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