The UN Environment Programme (UNEP) details what’s needed to curb global warming and extreme weather events in its latest Emissions Gap Report, which urged countries to take swift action; otherwise, the 1.5°C target set by the Paris Agreement will become unattainable.

For 1.5°C to still happen, stringent emissions reductions are urgent. A shift away from fossil fuels to renewables would have a major impact, likewise with preserving our forests and making industrial, transport and building sectors more energy efficient.

In a separate report by the Tencent Research Institute, “AI and Sustainable Development Outlook,” we examine how AI and large language models (LLMs) can be a game changer in efforts to combat climate change. It can boost the accuracy of weather forecasts, refine climate models, improve carbon monitoring, drive sustainable finance, and transform emissions-heavy industries identified by the UNEP. Here are six ways how.

1. Improve carbon monitoring

Why it matters

We must accurately track and measure carbon emissions. Carbon monitoring reveals where emissions originate, their quantities, and their contributions to warming.

How AI helps

Through advanced data collection, AI processes massive datasets from satellites and sensors to track global CO₂ with precision. High-resolution imagery empowers pinpoint monitoring of specific sites, such as factories, power plants or highways, enabling the identification of emission sources and highlighting areas requiring immediate action

AI excels in efficient analysis. It quickly identifies trends and anomalies in emissions, such as spikes from wildfires. This ability extends to forecasting emission trends, providing invaluable insights for strategic planning. Instant alerts generated by AI also facilitate rapid responses during environmental emergencies.

2. Reduce industrial and urban emissions

Why it matters

Industries like energy, cement, and steel are critical to modern economies but are also significant sources of emissions. Urban buildings and transportation systems contribute heavily to carbon footprints. To meet climate goals, these sectors need efficient and cost-effective tools to reduce emissions.

How AI helps

AI is transforming emissions-heavy industries by making processes more efficient, cost-effective, and environmentally sustainable. It provides actionable insights to reduce environmental impact while maintaining operational excellence.

Power industry

AI enhances energy generation and distribution efficiency, reducing both emissions and costs. Accurate energy demand forecasts enable strategic use of renewable energy during peak times, helping the deployment of more renewable energy resources.

Urban buildings

AI dynamically manages heating and cooling systems to eliminate energy waste. It also aligns energy consumption with the grid’s environmental performance, shrinking buildings' carbon footprints.

Transportation

Optimized traffic signals in real time reduce congestion and vehicle emissions. AI’s predictive capabilities streamline public transit operations and minimize unnecessary trips.

3. Enhance business carbon management

Why it matters

Accurate carbon tracking is vital for transparency, strategic decision making and regulatory compliance. It underpins the effectiveness of carbon trading schemes while helping businesses meet sustainability targets, maintain their reputation, and mitigate risks of penalties.

How AI helps

AI is transforming how businesses manage emissions by delivering real-time insights and enabling data-driven strategies for sustainable decision making. It enables comprehensive emissions tracking, including direct emissions from operations and indirect emissions from energy use and supply chains. Real-time tracking lets businesses identify problem areas and correct them.

Informed strategic decision making becomes easier with the aid of AI, which leverages advanced data analysis to map a company’s carbon footprint. This clarity helps businesses set realistic sustainability goals, prioritize high-impact actions, and allocate resources effectively in a sustainability-focused economy.

4. Drive sustainable finance

Why it matters

Funds are increasingly being channeled into sustainable development projects such as renewables. AI helps financial institutions and investors make robust, science-based decisions that make sense for the business and the climate.

How AI helps

AI boosts sustainable finance by providing precise tools and transparent insights that align investments with environmental goals. By analyzing carbon footprints and predicting environmental risks, investors can make more informed decisions. AI facilitates green bond issuance, connecting companies with funding for projects that deliver tangible environmental benefits.

With advanced analytics, AI delivers objective evaluations of environmental, social, and governance (ESG) performance. Real-time updates enhance transparency, build investor trust, and showcase corporate sustainability efforts.

5. Streamline climate finance

Why it matters

Efficient financing processes are essential to fund initiatives that combat climate change. AI simplifies these capital flows, enabling broader participation in sustainable investments, including from countries heavily impacted by but often excluded from climate financing.

How AI helps

Climate-finance processes can be simplified and errors reduced by automating repetitive tasks. Financial institutions save time and resources while creating a more accessible experience for investors and borrowers alike.

Using advanced, region-specific risk models, AI delivers precise climate risk evaluations and forecasts. These insights help stakeholders allocate resources effectively, mitigate risks, and focus on high-impact investments.

AI leverages alternative data to create tailored investment opportunities for climate initiatives. This approach expands participation by making investments transparent, inclusive, and attractive — reaching stakeholders often underserved in traditional climate financing.

6. Support environmental analysis

Why it matters

Effective climate action and mitigating extreme events depends on understanding environmental impacts. AI delivers comprehensive insights by analyzing vast amounts of complex data from diverse sources to support more effective decision making.

How AI helps

By merging diverse datasets, including satellite imagery and socioeconomic data, we can create a multidimensional view of environmental conditions. This helps stakeholders understand climate change's broader impacts and prioritize areas for intervention.

AI enhances the accuracy of weather forecasts and climate-impact projections using advanced models and deep learning algorithms. This allows for better preparation for extreme weather and long-term mitigation strategies.

Policymakers and city planners can also create more effective policies and develop low-carbon cities using AI to simulate the effects of emission-reduction efforts and forecast the environmental impact of urban projects.

AI is showing broad, even transformative applications in efforts to combat climate change. By improving carbon monitoring, overhauling industries, facilitating sustainable finance, and enhancing weather forecasts, AI offers practical, scalable solutions for businesses, governments and communities. Cutting emissions takes time but we must act now to make meaningful change and safeguard our planet.