How China and Africa Can Better Collaborate to Close Sub-Saharan Africa’s Energy Access Gap margaret.overh… Fri, 08/30/2024 - 15:10

The world is far off-track to meet its shared goal of providing affordable, reliable and sustainable energy to all people by 2030. Indeed, the number of people without electricity access increased in 2022 for the first time in a decade, rising from 675 million in 2021 to 685 million the next year. Eighty percent of people without electricity access — and 18 of the 20 countries with the biggest energy access deficits — are in sub-Saharan Africa.

Closing sub-Saharan Africa's massive energy access gap will require substantial investments; around $20 billion per year through 2030, according to the International Energy Agency's (IEA) estimate. And China could play a key role in filling that need.

China is not only Africa's largest bilateral trading partner and one of its biggest sources of foreign aid, but is also home to more than 80% of the world's renewable energy manufacturing. This makes the country uniquely well positioned to support clean energy expansion and access in sub-Saharan Africa. Indeed, it's already made strides in that direction. For example, China's government financed the construction of a utility-scale 50 megawatt (MW) solar plant in Kenya — the first of its kind in the country. Since opening in 2019, the plant has supplied an average of over 100,000 MWH of electricity annually, enough to support more than 350,000 people in 70,000 households.

While China has also supported some smaller, localized renewable energy efforts in sub-Saharan Africa, most of its investments in the region have focused on this kind of utility-scale installation. The challenge is that large, centralized projects often struggle to meet the dispersed, small-scale electricity needs of rural communities — particularly in remote areas where energy access is scarce. The mismatch between scattered electricity demand and centralized energy supply has made it difficult to increase access where it's needed most.

As China hosts the 2024 Summit of the Forum on China-Africa Cooperation (FOCAC) this September, closing electricity access gaps in sub-Saharan Africa must be top of the agenda.

About the Africa Solar Belt Program

Recently, China committed to shift its overseas renewable energy investments toward smaller-scale initiatives that prioritize social benefits. Its first major program under this new strategy — and a key initiative of the Forum on Africa-China Cooperation — is the Africa Solar Belt.

China's Shift Toward International Clean Energy Investing

China has a long history of investing in energy infrastructure overseas. Its Belt and Road Initiative has invested over $1 trillion in infrastructure in more than 150 countries. In the past, these investments have been dominated by fossil fuel projects, particularly coal power. More recently, China has committed to 'green' its investments and development efforts in developing countries. For example, it established a "South-South Climate Cooperation Fund" in 2015, which seeks to help developing countries tackle climate change by supporting 10 pilot industrial parks, 100 climate mitigation and adaptation projects, and 1,000 climate-related capacity building activities ("10-100-1,000"). In 2021, China, along with 53 African countries and the African Union Commission (AUC), adopted the Declaration on China-Africa Cooperation on Combating Climate Change, stressing China's commitments to increase clean energy investment in Africa and to end overseas investment in new coal power projects.

The Africa Solar Belt Program, which is supported by research and policy analysis from WRI, aims to provide CNY 100 million (around US$14 million) in public funds between 2024 and 2027 to supply 50,000 African households with solar home systems. It also aims to support interventions that can improve livelihoods of local populations, which could potentially include things like powering schools or healthcare with solar. China has promoted this as a shift to "small and beautiful" projects rather than its traditional utility-scale investments.

But while the Africa Solar Belt and similar programs could significantly expand electricity access and improve people's welfare in sub-Saharan Africa, fulfilling this promise will require China and Africa to work together to overcome critical implementation challenges.

Key Challenges to Implementing the Africa Solar Belt Program

China and African partners have made some early progress in implementing the program. Since its launch in 2023, China has signed bilateral memorandums of understanding (MOUs) with two African countries: the Republic of Chad and the Democratic Republic of São Tomé and Príncipe. Together, the three countries' governments have developed and adopted an implementation plan valued at 15 million CNY (around US$2.1 million), which aims to deliver 3,100 solar photovoltaic systems in São Tomé and Príncipe and 4,300 to local households in Chad by end of 2024.

However, past and ongoing energy access initiatives in the region — such as Lighting Africa, which is led by the World Bank and the International Finance Corporation, and Power Africa, a U.S.-led initiative — reveal numerous obstacles, risks and challenges. For example, financers and developers of decentralized renewable energy projects have had trouble identifying electricity demand at local, national and regional levels in Africa due to a lack of reliable data on viable opportunities. They have also found it difficult to develop sustainable and replicable business models for decentralized renewable energy projects that can attract private sector investment in the region at scale. Further, local work force in the region have faced challenges building the technical capacity needed to operate and maintain decentralized renewable energy over a multi-decade lifespan.

Solar panels cover the roof of a home in São Tomé and Príncipe, one of two African countries that have so far initiated solar power development plans with support from China under the Africa Solar Belt Program. Photo by Wirestock/iStock How China and Africa Can Work Together to Accelerate Solar Belt Implementation

China and Africa will need to work together closely to ensure China's clean energy investment is directed where it can have the most positive impact. China will host the ninth Forum on China-Africa Cooperation from Sept. 4-Sept.6, 2024 to explore areas of economic collaboration, trade and investment, as well as development cooperation with Africa's political leadership. At this summit and through other fora, it is critical that leaders from both areas explore interventions that could unlock new clean energy investments under the Africa Solar Belt Program and similar initiatives.

Here are five key steps that Chinese and African governments can take to help scale up Africa Solar Belt implementation at this year's FOCAC summit and beyond:

1) Facilitate more public and private investment in clean energy initiatives

With China's shift away from investment in overseas coal-fired power plants, funding could be redirected to further deepen the country's investment in sub-Saharan Africa's distributed renewable energy sector. This will require a transition from traditional financing arrangements that worked in the context of utility-scale energy projects to new and innovative ones that respond to the needs of distributed renewable energy space.

Strategic collaborations between Chinese and Pan-African development finance institutions, philanthropic agencies, local banks, fund managers and research institutions will be critical to closing the region's funding gap. Governments can facilitate this by developing policies and regulations to attract international investment to the region and reduce risks for investors.

2) Incubate business opportunities between China and private sector actors in sub-Saharan Africa

Distributed renewable energy is primarily needed in rural areas of sub-Saharan Africa, where local contexts, including terrain and cultural dynamics, will dictate how to successfully design and execute projects. Collaboration with local renewable energy companies is critical to implementing "small-and-beautiful" projects. Renewable energy associations from both areas — including the Chinese Renewable Energy Industries Association (CREIA) and its African counterparts, like the Kenya Renewable Energy Association (KEREA) — could play a strategic role in facilitating collaboration among their members and supporting pilot projects in selected African countries. This is already being demonstrated through the Egypt Initiative on Developing Clean Energy to Improve Electricity Access in Africa launched at COP27.

Workers install solar panels on the rooftop of a motorcycle parts market in Nnewi, Nigeria. China's new clean energy investing strategy in Africa focuses on small-scale projects located within communities, rather than large-scale centralized power plants. Photo by Ijeh Williams 3) Encourage research, data analysis and knowledge exchange

Developers and investors alike need detailed information on the location and size of potential projects, the cost of such opportunities, their potential return on investment and more. Chinese renewable energy investors, their local counterparts and other investors must collaborate with local and international institutions that can provide reliable, granular data at both national and local levels to inform energy planning and investment decisions in the region. Tools like WRI's Energy Access Explorer can help fill such gaps by pinpointing areas with viable renewable energy demand, whether for household electrification or for powering productive uses, such as agriculture and healthcare electrification. The Ministry of Health in Zambia, for example, has been using the tool to determine priority locations for electrification of healthcare facilities in the country.

4) Nurture and facilitate platforms for policy dialogues

Continuous policy dialogues at national, regional and international levels will play a crucial role in deploying distributed renewable energy throughout sub-Saharan Africa. Governments and project developers must cooperate with civil society organizations, think tanks, development banks and other partners to incorporate voices from the region into policy and regulatory discussions. Partnerships with demand-side policy makers to sensitize investors and developers on investment opportunities, as well as strengthening south-south collaboration and engagements at strategic global platforms to influence regional and international policy discourse on renewable energy investment, will be very important.

5) Facilitate capacity building and technology transfer between China and sub-Saharan Africa

Sub-Saharan Africa produces most of the critical minerals used in manufacturing renewable energy technologies globally. For example, Democratic Republic of Congo produces about 70% of the world's supply of cobalt, a mineral essential to building the lithium-ion batteries used in electric vehicles. These minerals are exported in cheap, raw form to China and other countries, while the final manufactured technologies are imported back to Africa at a much higher cost. By facilitating technology transfer to sub-Saharan Africa, China could help strengthen the region's manufacturing capacity and build local economies through job creation, while also contributing to GDP and reducing the cost of deploying renewable energy locally.

Chinese stakeholders, including policy makers, academic institutions, industrial associations and renewable energy manufacturers can help by: developing and executing training curriculum targeted at strengthening capacity of local workforces to meet the sector's growing demand; identifying requirements needed to facilitate transfer of renewable energy technology; and building and certifying local workforce capacity for renewable energy deployment, maintenance and operation.

rooftop-solar-nigeria.jpg Energy Africa Energy Energy Access climate finance renewable energy Type Project Update Exclude From Blog Feed? 0 Projects

• Energy Access and Equitable Development
• Energy Access Explorer

Authors Jing Song Benson Ireri

How the Climate Finance Puzzle Fits into the Global Financial System alicia.cypress… Fri, 08/30/2024 - 13:10

At the heart of the world’s economies is the global financial system — a set of institutions, markets and mechanisms that enable the flow of finance. But 21st century challenges, such as a global pandemic, international conflicts and especially the escalating impacts of climate change, are increasingly sending shocks through this system.

When the global financial system functions well, it provides the channels and rules that enable countries to interact with one another through trade, investment and other official transactions. In the past, it has also helped countries manage many economic, political and environmental shocks. But with pandemics, wars, debt and climate change all impacting the globe at once, questions about how to better stabilize the system are now appearing on agendas of international meetings.

The current Brazilian Presidency of the G20 includes the reform of global governance institutions as one of its three priorities, and many world leaders and thinkers are calling to reimagine the global financial system for modern times.

As UN Secretary-General António Guterres said in January 2023, "We can't build a future for our grandchildren with a system built for our grandparents."

This signals recognition that the global financial system is facing problems that require improved communication and cooperation. There’s an opportunity — and perhaps a necessity — for some of this reform to support better climate and nature outcomes.

How the global financial system relates to the climate and to the United Nations Framework Convention for Climate Change (UNFCCC), the entity tasked with coordinating the world’s response to climate change, is an ongoing debate. The economic and financial community and the climate community must tackle systemic issues together. Will they rise to the challenge?

Understanding the Role of the Global Financial System

Without the global financial system, money can’t flow between people and countries. Central banks, commercial banks, financial markets, regulatory bodies and international financial institutions essentially act as the roads, railroads or infrastructure on which financial instruments, such as money flows and resources (the vehicles), are invested or passed along.

To account for shocks in the system or respond at times of crisis, a global financial safety net (acting as airbags) was gradually created to ensure the system remains stable and predictable.

For example, if a country’s own reserves are not enough, other central banks can provide rapid liquidity, as the U.S. Federal Reserve did during the 2007-2008 financial crisis. And regional financial arrangements like the European Stability Mechanism or the Chiang Mai Initiative have been created to better pool resources. In addition, since 1944, the International Monetary Fund (IMF) provides financial capacity to stem crises occurring in member countries and prevent them from spilling over into other countries.

At the heart of the global financial system are the IMF and the World Bank Group. These two institutions are unique in that nearly all countries are represented through specific membership and governance arrangements (through various respective ministries or central banks).

When these institutions were created — at Bretton Woods 80 years ago after World War II — the global financial system wasn’t set in stone. As the post-war world took shape and new countries were established or gained independence, institutions, standard-setting bodies and other entities emerged; over time, adjustments were made to respond to new types of shocks and accommodate change. Today, climate change is frequently becoming one of those new shocks to which the financial system must be prepared to respond.

The IMF and World Bank were created during a gathering of global leaders in 1944 at the Mount Washington Hotel in Bretton Woods, New Hampshire. Photo by travelview/iStock. What Is the Relationship between the Global Financial System and Climate Finance?

There’s no formal governance relationship between climate finance and the global financial system. But climate finance, whose principal objective is to address the impacts of climate change, must use the global financial system, which facilitates the flow of climate finance and allocates resources for climate-related activities. Whether it’s a loan made by a development bank to build a solar farm, or a hurricane-battered country seeking payment for damages through sovereign insurance, these “vehicles” travel through the global financial system.

In the context of the UNFCCC, the importance of international climate finance — which originates with one country and funds climate action in a different, developing country — was codified in the 2015 international Paris Agreement on climate change.

The Paris Agreement’s long-term finance goal is even broader and aims to align finance in all countries with global adaptation and mitigation goals. The Agreement also aims to facilitate the flow of finance to developing countries (via Articles 9.1 and 9.3).

The global financial system worked hard to make itself more resilient to unexpected shocks following the Asian Financial Crisis in the late 1990s and the 2007-2008 Global Financial Crisis. During this time, the UNFCCC, for the most part, remained outside of these discussions on managing economic and financial shocks. But conversations began to converge between the two communities, allowing for the global financial system to start integrating some climate considerations.

For example, in 2015, the Financial Stability Board (set up by the G20 in 2009 after the Global Financial Crisis) started to detail how climate could undermine financial stability through sudden megastorms, long-term droughts and the retreat of fossil-based economies. It established the Task Force on Climate-Related Financial Disclosures (TCFD) to study how climate risks impact finance (subsequently complemented by the Taskforce on Nature-related Financial Disclosures, TNFD).

Recommendations from those taskforces provide a concrete way to incorporate climate into investment decisions made within the global financial system: These disclosure regimes, which act like a streetlight system, illuminate paths of travel and point out risks or opportunities to investors along the way. Now, TCFD recommendations have been incorporated by the International Accounting Standards Board (IASB) that develops financial accounting standards, as the International Sustainability Standards Board (ISSB) builds on these standards that are becoming globally accepted.

The pressure for policymakers in the economic and financial spheres to address the challenges posed by climate change isn’t just coming from white papers, disclosure frameworks and communiqués calling for action. Business leaders, policymakers and everyday people are recognizing that financial reforms are needed to allow societies to fully address these issues as they experience more severe and frequent climate impacts — which are disrupting and devastating lives and economies at national or regional scales — and as they see the need for investments which can support just transitions towards a climate- and nature-smart world.

Rows of solar panels soak up the sun in Cape Town, South Africa. Global financial reforms can help enable countries to raise and contribute more climate-related finance for expanding clean energy and other low-carbon solutions. Photo by Connect Images/Alamy Stock Photo Why More Dialogue Must Take Place between the Climate and Finance Communities

Key stakeholders from governments, the economic and financial community, and the climate community must tackle systemic issues together, because effective solutions require the resources, perspectives and expertise of all sides. These systemic issues are characterized by three themes:

1) Climate change exacerbates development challenges.

Delaying climate action or not investing in mitigation and adaptation now will only worsen climate impacts and, in turn, jeopardize development outcomes. Many institutions include climate considerations in macroeconomic projections and analysis used for delivering policy advice, including the IMF, World Bank Group and other development banks, and country finance ministries (at the G20, the Coalition of Finance Ministers for Climate Action and the V20). This helps the global financial system ensure its “roads and infrastructure” function well.

Addressing climate-related development challenges requires investments into policies or projects such as green industrialization, decarbonization pathways and resilient infrastructure, so that sustainable development follows. However, most countries face significant barriers, ranging from lacking incentives to high debt, to making these investments now.

2) Climate change negatively impacts economic and financial stability.

There is no shortage of evidence to support the economic and financial costs of climate-related disasters. For example, the agricultural sector is regularly impacted by heatwaves and massive floods, which all too frequently result in loss of life, damage the environment that supports livelihoods, and wipe out substantial portions of national income. Fearing these climate impacts, investors and insurers are more likely to seek out safer locations with lower climate risks. This strains the global financial safety net, which must be strengthened to handle exacerbating macroeconomic and financial instability and risks due to climate change.

3) The sum of all currently available climate finance — public, private, domestic and international — is inadequate to meet Paris Agreement goals.

The Organization for Economic Cooperation and Development released data in May 2024 indicating that the $100 billion annual goal for climate finance was reached (albeit behind schedule), but that in the years ahead, climate finance needs will increase many times over. There simply isn’t enough finance flowing to support countries’ transition and adaptation needs, especially for developing countries who were not present to shape the building blocks of the global financial system.

While it has become certain through studies and experience that climate change could threaten the stability of the global financial system, and that greater flows of international climate finance are needed, it remains less clear what climate-related reforms are required from the global financial system. As mentioned above, the 2015 Paris Agreement did set out a long-term goal to “align” all financial flows with what would be needed to achieve global mitigation and adaptation targets; it did not, however, say exactly how this could be achieved. The first Global Stocktake of the Paris Agreement that concluded in 2023 revealed the need to significantly ratchet up “climate ambition,” backed by finance for developing countries. This has triggered a mounting clamor from multiple stakeholders.

Calls for Global Financial System Reform to Enhance Climate Action

From the G7/G20, to IMF and World Bank annual meetings, to the UNFCCC climate summits, debates are ongoing about the role of different actors, institutions, financing instruments and various climate funds to better understand how the global financial system and climate action interact. Some of the common calls for reform include:

1) “Multilateral development banks need to step up”

The role of multilateral development banks was called out for the first time in a decision from the 2022 UN climate summit (COP27). One example includes a call for different levels of development banks (multilateral, regional, complementing national and subnational) to support country investments and transitions to build resilient economies and channel climate finance where it is needed.

In Washington, D.C., a sign advertising annual meetings of the IMF and World Bank. Recent years have seen increasing calls for international development banks like the World Bank to play a more active role in financing and supporting climate action. Photo by Kiyoshi Tanno/iStock 2) “More and better climate finance”

Access to climate finance across sectors and countries is a recurring issue. In 2023, the Global Stocktake notably called on different actors in the global financial system to support climate action, reiterating the importance of reforms in the multilateral financial architecture with the aim to provide more and better climate finance. It recognized the need for more climate finance, especially through grants, non-debt and concessional instruments. The use of innovative finance instruments, carbon markets and new forms of taxation are also cited as ways to pursue Paris Agreement objectives, as well as the recognition of the role of the private sector, policies, regulations and enabling conditions to reach the scale of investment needed.

3) “Understand and manage risks better”

The Global Stocktake also called for a better assessment of climate-related financial risks by governments, central banks, commercial banks and institutional investors. Investors need clarity, such that financing instruments are put to their best use, and that the “streetlight system” effectively supports mitigating risks and aligning investments to the Paris Agreement goals. To provide a clear streetlight system that illuminates climate risks, the global financial system can build on the network of existing institutions, both by creating and adjusting the standards and rules in a way that integrates climate and nature and by showing how high-integrity carbon markets can provide new ways to invest. This would allow finance to better enable and support countries’ economic growth and development that is sustainable, low-carbon and resilient.

4) “Rewire the global financial system”

Further ideas have come from Barbados Prime Minister Mia Mottley, in the so-called Bridgetown initiative. This highlighted ways that development and international finance, among other structural features of the global financial system, can change to include climate and better reflect the composition of the global financial system and realities of countries today — rather than when it was created.

Driving Action on Finance: How could reforms support finance for climate-vulnerable countries?

Climate finance is crucial for climate-vulnerable countries to transition to a low-emissions, climate-resilient future. Allied for Climate Transformation by 2025 (ACT2025), a coalition that amplifies the voices of climate-vulnerable countries, released a Call to Action for COP29 that explains how ambitious reforms could boost the quality and quantity of funding for climate-vulnerable developing countries.

Other diverse coalitions of stakeholders, including countries, private and non-governmental entities, have rallied behind calls for reform. The V20 (a grouping 68 climate-vulnerable nations) launched the Accra-to-Marrakech Agenda, featuring four major suggestions for “rewiring” the global financial system to work for climate and particularly for climate-vulnerable countries. It includes suggestions on debt, carbon financing and risk management.

In particular, dealing with debt accumulation effectively and with distress in a timely manner requires institutions such as the IMF, the G20 (Common Framework), traditional and non-traditional creditors, borrowing governments and the private sector to work together towards finding solutions.

Other venues where initiatives were launched include the Summit for a New Financing Pact in Paris (June 2023), the Africa Climate Summit (September 2023), the Emergency Coalition on Debt Sustainability and Climate (October 2023), and, most recently, the African Development Bank annual meetings (June 2024). During these high-level gatherings, calls for reforming the way unsustainable debt is handled have multiplied, including in the context of international climate talks. But all stakeholders have yet to define and agree upon faster solutions.

The functions of the system are decided collectively over time by decision-makers. Any reforms need to be perceived as legitimate and owned by all stakeholders, be it borrowers, or all types of donors and finance providers working together. The inherent trust and solidarity mechanisms that legitimize the international financial system are being put to the test. Systemic elements can change to support the transition to a low-carbon and climate-resilient economy.

Several of these themes have been echoed at the margins of recent UNFCCC negotiations at COP27 in Sharm el-Sheikh and COP28 in Dubai, in an attempt to outline principles for global climate finance. These discussions highlight the connective tissue between climate and the global financial system, such as the provision of international climate finance for developing countries; the better management of climate risk; or investing into resilience while countries are debt constrained.

Ultimately, while the UNFCCC climate regime cannot singlehandedly drive changes in the global financial system, it matters that these conversations between the climate community and the economic and financial community are happening and that shared goals and effective means of achieving them are agreed.

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• Allied for Climate Transformation By 2025 (ACT2025)
• Urban Heat and Passive Cooling

Authors Valerie Laxton Preety Bhandari

Bipartisan IMPACT Act 2.0 Fills Gaps in Concrete and Asphalt Climate Legislation shannon.paton@… Tue, 08/27/2024 - 11:01

Demand for construction materials — such as cement, concrete and asphalt — is increasing as the U.S. builds and repairs infrastructure. Concrete is already the most widely used human-made resource in the world. Concrete and asphalt together account for roughly 1.7% of U.S. total greenhouse gas emissions, the equivalent of emissions from around 25 million gasoline-powered cars on the road each year.

In the last few years, the U.S. has made significant investments in decarbonizing the industrial sector — including construction materials — through the implementation of the 2022 Inflation Reduction Act (IRA) and 2021 Bipartisan Infrastructure Law (BIL). In addition, federal and state buy clean and other policies have started catalyzing markets for low-carbon products like concrete and steel. Funded by the BIL and IRA, the Industrial Demonstrations Program, which awarded key industrial sectors $6.3 billion to develop deep decarbonization technologies, is the largest federal investment in industrial decarbonization so far and highlights the scale of efforts in the U.S.

Yet more needs to be done to scale up the development and deployment of decarbonization technologies and ramp up market demand for decarbonized industrial products. The U.S. Department of Energy (DOE) estimates that 60% of the technologies needed to decarbonize the industrial sector by 2050 are not yet available and are still in the research, development and demonstration (RD&D) pipeline. And while the recent investments in decarbonization technologies are commendable, they provide only a fraction of the funding needed to meet net-zero targets. For example, low-carbon commercial scale projects currently under development will only be able to supply 5% of the demand for cement in the U.S. in the next 5 to 10 years.

Alongside increased RD&D grants, demand-side policies are a key lever for scaling low-carbon technologies. This lever, which aims to create a market for low-carbon products through policies like green procurement and advance market commitments, allows companies to derisk investing in decarbonization technologies by guaranteeing future sale of products as long as they meet certain low-emissions benchmarks.

The IMPACT Act 2.0 bill (H.R. 9136) — introduced by Max Miller (R-Ohio) and Valerie Foushee (D-N.C.) in the U.S. House of Representatives — would bolster the manufacturing of low-emissions cement, concrete and asphalt binder and mixes to propel U.S. industrial decarbonization.

The bill has three main sections that establish:

• Federal Highway Administration performance-based grants of $15 million to facilitate the purchase of low-emissions concrete and asphalt goods.
• Advance Purchase Commitments authority for the Department of Transportation to coordinate state and local agencies to purchase low-emissions goods three or more years into the future.
• An interagency task force on innovation for improving durability, reducing costs, supporting continuous emissions reduction, increasing employment and workforce training.

The bill complements the bipartisan IMPACT Act introduced in the House of Representatives in March 2024 by Miller and Foushee, and parallels the Concrete and Asphalt Innovation Act (CAIA) introduced in the U.S. Senate in December 2023 by Sens. Chris Coons (D-Del.) and Thom Tillis (R-N.C.). CAIA would boost RD&D and create a first-of-a-kind program in the U.S. for government agencies to enter into contractual agreements for the future purchase of low-carbon concrete and asphalt.

Why This Legislation Is Important

IMPACT Act 2.0  would pave the way for American industries to innovate the foundational materials of our construction industry — concrete and asphalt — toward lowering emissions while strengthening our workforce and reducing costs.

This legislation, along with the IMPACT Act and the Concrete and Asphalt Innovation Act, are a legislative package that will incentivize and support both producers and consumers of low-emission, American-made construction materials while benefiting the communities in which they are produced.

The bipartisan introduction of this bill by Reps. Miller and Foushee is an important step toward  building a green, innovative and robust American industry.

impact-2-0-roadwork.jpg Climate Climate industry U.S. Climate climate policy Type Project Update Exclude From Blog Feed? 0 Projects

• U.S. Climate
• Industrial Decarbonization

Authors Ankita Gangotra Carrie Dellesky Angela Anderson

Canada Develops Legal Framework to Prioritize Net-Zero Implementation shannon.paton@… Thu, 08/22/2024 - 16:46

Canada’s national climate governance system — including its political leadership, inclusive planning and accountability mechanisms — is poised to support rapid GHG emission reductions towards its net-zero goal. Although Canada’s first LT-LEDS (2016) did not include a net-zero target, the development of this initial long-term climate strategy initiated a shift from short-term to long-term climate planning, which thereafter spurred several climate governance interventions. In 2019, the Canadian Parliament declared a national climate emergency and in 2020, during the Speech from the Throne, the government committed to legislate a goal of net-zero emissions by 2050. Later that year, a bill was introduced to advance this commitment. The same year, Canada also released its Strengthened Climate Plan, which outlines synergistic opportunities for achieving climate goals while promoting economic prosperity.

According to an interview with an analyst in Canada’s Department of Environment and Climate Change, the net zero bill was debated and amended before ultimately passing in 2021. Now law, the Canadian Net-Zero Emissions Accountability Act establishes a legally binding process for the government to set GHG emission reduction targets and communicate plans to achieve each target. The 2030 Emissions Reduction Plan (2022) was the first of such plans established under the new law and outlines a sector-by-sector path for Canada to reach its emissions reduction target of 40 to 45% below 2005 levels by 2030 and net-zero emissions by 2050. In developing the 2030 Emissions Reduction Plan, the Canadian government heard public feedback on the plan from over 30,000 Canadians.  

The plan emphasizes that pricing carbon pollution is key to achieving the 2030 target and, despite legal challenge, the country’s Greenhouse Gas Pollution Pricing Act (2018), was upheld by Canada’s Supreme court in 2021, upholding its validity. To support government accountability, the Canadian Net-Zero Emissions Accountability Act requires regular reporting on the country’s progress toward its greenhouse gas emissions targets, with the first progress report submitted in 2023, a second due in 2025 and a third in 2027. In 2025, the report must contain an assessment of progress toward the 2030 target and include the next national GHG emissions reduction target for the 2035 milestone year.

The Canadian Net-Zero Emissions Accountability Act also establishes a Net Zero Advisory Body in legislation, which will provide independent advice on the GHG emissions targets and emission reduction plans, including measures and sectoral strategies that the Government of Canada could implement. The Advisory Body is required to prepare an annual report stating its advice and the results of its engagement activities. When preparing its advice and its report, the advisory body must consider a range of factors including the best available scientific information and Indigenous knowledge. The Ministers must release a public response to the Net-Zero Advisory Body Report within 120 days after receiving it. The Canadian Net-Zero Emissions Accountability Act requires a comprehensive review five years after its coming into force. 

Ultimately, Canada’s net-zero-aligned governance mechanisms have already served to focus national planning and policymaking on driving decarbonization. In the years ahead, we can evaluate the extent to which this framework drives progress toward the near- and long-term climate targets that have been established.

 

Realizing Net-Zero Emissions: Good Practices in Countries

This case study is part of a working paper outlining a "Framework for Net-Zero Climate Action," emphasizing outcomes, enabling action areas and actions crucial for achieving net-zero emissions. It showcases real-world examples of countries implementing these strategies, offering valuable insights for others.

Read More

 

Read More Net-Zero Case Studies in this Series:

• Sweden’s Early Action to Legally Enshrine its Net-zero Target May Bolster Against Political Shifts
• Uruguay’s Wind Development Program Attracted Private Investment to Transform the Power Sector
• Singapore Mandates Corporate Climate Risk Disclosure to Mobilize Private Climate Finance
• The Kingdom of Tonga Developed its LT-LEDS Through a Consensus-Based Stakeholder Engagement Process
• Costa Rica’s Pioneering Net-zero Implementation Plan Attracts Investment, Withstands Political Changes
• Chile’s New Governance Structures Are Streamlining Net-zero Implementation
• South Africa Establishes an Inclusive Process Toward a Just Transition, with Broad Stakeholder Engagement
• A Sustained Portfolio of Policies Have Transformed Denmark’s Power Sector
• France Shapes Budget to Increase Net-zero-aligned Public Finance

net-zero-snapshots-canada.jpg Climate Canada Climate net-zero emissions long-term strategies long-term strategy related case study GHG emissions Type Project Update Exclude From Blog Feed? 0 Projects

• Long-Term Climate Strategies
• National Climate Action
• Tracking Climate Progress

Authors Cynthia Elliott Clea Schumer Rebecca Gasper Katie Ross Neelam Singh

Uruguay’s Wind Development Program Attracted Private Investment to Transform the Power Sector shannon.paton@… Thu, 08/22/2024 - 16:25

Uruguay illustrates how targeted sectoral policy —  in this case, regulatory reforms and government-funded demonstrations of renewable technologies —  can catalyze private investment and lead to transformative change. While the country’s power mix has historically been dominated by hydropower, its lack of reserves left the system highly vulnerable. A series of severe droughts in the early 2000s forced the government to rely more heavily on oil imports and electricity imports, increasing costs and carbon dioxide emissions. During particularly severe drought years, oil comprised 30%-40% of the power mix.

In 2007, the government launched the Uruguay Wind Energy Program to reduce reliance on costly fossil fuel imports using a Global Environment Facility grant of $1 million coupled with $6 million from its own budget. This program kickstarted wind development through the following measures:

• Regulatory reforms, including a competitive reverse-auction system for large-scale development and a feed-in tariff for small-scale projects. Independent power producers could feed into grid at standardized prices and the state-owned utility was required to buy all wind power generated. Higher prices were guaranteed for projects generating electricity before 2015.
• Workforce training on wind integration, including development of a demonstration wind farm and a university curriculum, which created new job opportunities in Uruguay and regionally.
• Outreach to developers and investors led by utilities to address risk perception and share knowledge.
• Stakeholder dialogues for regional cooperation, which ultimately facilitated market linkages among Uruguay, Brazil and Argentina. Uruguay began exporting excess wind power to Argentina in 2016.

As a result, wind development exceeded the government’s initial expectations, with wind energy generation near 5,000 gigawatt hours and generating about 40% of the country’s electricity. Building on its history of meaningful dialogue with labor groups, the government worked closely with unions during the closure of power plants and used measures including early retirement together with workforce training in renewable industries to manage the transition.  

More recently, the government began implementing similar policies to ramp up solar power, which now comprises 3% of the power mix. The government is also exploring ramping up offshore wind largely to produce green hydrogen as a key component of plans to meet its 2050 carbon neutrality goal.

 

Realizing Net-Zero Emissions: Good Practices in Countries

This case study is part of a working paper outlining a "Framework for Net-Zero Climate Action," emphasizing outcomes, enabling action areas and actions crucial for achieving net-zero emissions. It showcases real-world examples of countries implementing these strategies, offering valuable insights for others.

Read More

 

Read More Net-Zero Case Studies in this Series:

• Sweden’s Early Action to Legally Enshrine its Net-zero Target May Bolster Against Political Shifts
• Canada Develops Legal Framework to Prioritize Net-Zero Implementation
• Singapore Mandates Corporate Climate Risk Disclosure to Mobilize Private Climate Finance
• The Kingdom of Tonga Developed its LT-LEDS Through a Consensus-Based Stakeholder Engagement Process
• Costa Rica’s Pioneering Net-zero Implementation Plan Attracts Investment, Withstands Political Changes
• Chile’s New Governance Structures Are Streamlining Net-zero Implementation
• South Africa Establishes an Inclusive Process Toward a Just Transition, with Broad Stakeholder Engagement
• A Sustained Portfolio of Policies Have Transformed Denmark’s Power Sector
• France Shapes Budget to Increase Net-zero-aligned Public Finance

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• Long-Term Climate Strategies
• National Climate Action
• Tracking Climate Progress

Authors Cynthia Elliott Clea Schumer Rebecca Gasper Katie Ross Neelam Singh

Sweden’s Early Action to Legally Enshrine its Net-Zero Target May Bolster Against Political Shifts shannon.paton@… Thu, 08/22/2024 - 15:59

Sweden was among the first countries to adopt a net-zero target as part of its climate policy framework adopted by Parliament in 2017. Sweden’s target, as further elaborated in the country’s long-term strategy submitted to the United Nations Framework on Climate Change (UNFCCC), illustrates several good practice foundational decisions: clearly defined scope and wide sectoral coverage, covering all gases and sectors excluding international aviation and maritime transport; limitations around the use of offsets and carbon removals to no more than 15% of the target; interim targets for 2020, 2030 and 2040; and development of a robust implementation plan with sector-specific detail and modeling. The 2020 implementation plan built on existing European Union and Swedish policy instruments including the EU Emissions Trading Scheme, energy and carbon taxes, the Fossil Free Sweden  government initiative which supports industry developing sector-specific decarbonization roadmaps, and others. It then identified new sector-specific actions needed to achieve net zero.

After setting this target and developing a robust implementation plan, Sweden took a step further to enshrine the net-zero target into law through Sweden’s Climate Act, which requires the government to publish a climate action plan every four years assessing progress towards interim and longer-term targets and putting new actions into place as necessary (Figure 1). The government must also include annual climate reporting in its budget bill and ensure alignment between budgets and climate policy. Moreover, the Climate Act established an independent Climate Policy Council, comprised of scientists and policy experts external to government, to evaluate the government’s progress each year.

Figure 1

While it is still early to determine how Sweden’s foundational decisions have impacted GHG emissions, Sweden’s emissions have been on the decline since the 1990s, largely due to progressive climate policies driving reduced use of fossil fuels and improved efficiency in the power sector, as well as transport and industry. Sweden easily met its 2020 interim target, and, notably, was on track to achieve this prior to the pandemic. However, its record GHG emissions decline from 2019 to 2020 was likely due to the pandemic, as preliminary estimates indicate that emissions increased from 2020 to 2021. In 2022, emissions once again began to decline, reaching a minimum since accounting began. More time is needed to evaluate the extent to which Sweden’s net-zero implementation plan and legislation will drive continued and deep decarbonization.

Arguably, one the most important benefits of developing a strong implementation plan and legally requiring aspects of the plan is to ensure that net-zero implementation proceeds, even if political priorities shift. Stakeholders have raised questions about whether Sweden’s new government will continue Sweden’s historic progressive action on climate change after early decisions including the removal of a dedicated Ministry for Climate and Environment and a move to lower fossil fuel prices by reducing the biofuels requirement to the EU minimum. The next Climate Action Plan —which was published by the country’s new government in December 2023 — has been criticized for deprioritizing near-term action. It will be important to monitor the long-term durability of the climate policy framework that has been built in light of these shifting priorities in the years to come.

 

Realizing Net-Zero Emissions: Good Practices in Countries

This case study is part of a working paper outlining a "Framework for Net-Zero Climate Action," emphasizing outcomes, enabling action areas and actions crucial for achieving net-zero emissions. It showcases real-world examples of countries implementing these strategies, offering valuable insights for others.

Read More

 

Read More Net-Zero Case Studies in this Series:

• Uruguay’s Wind Development Program Attracted Private Investment to Transform the Power Sector
• Canada Develops Legal Framework to Prioritize Net-Zero Implementation
• Singapore Mandates Corporate Climate Risk Disclosure to Mobilize Private Climate Finance
• The Kingdom of Tonga Developed its LT-LEDS Through a Consensus-Based Stakeholder Engagement Process
• Costa Rica’s Pioneering Net-zero Implementation Plan Attracts Investment, Withstands Political Changes
• Chile’s New Governance Structures Are Streamlining Net-zero Implementation
• South Africa Establishes an Inclusive Process Toward a Just Transition, with Broad Stakeholder Engagement
• A Sustained Portfolio of Policies Have Transformed Denmark’s Power Sector
• France Shapes Budget to Increase Net-zero-aligned Public Finance

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• Long-Term Climate Strategies
• National Climate Action
• Tracking Climate Progress

Authors Cynthia Elliott Clea Schumer Rebecca Gasper Katie Ross Neelam Singh

The Kingdom of Tonga Developed its LT-LEDS Through a Consensus-Based Stakeholder Engagement Process shannon.paton@… Thu, 08/22/2024 - 14:17

Tonga’s long-term strategy puts forward a common vision of a low-emission, resilient and autonomous future reached through an extensive stakeholder engagement process supported by technical analysis. The strategy describes sectoral pathways and identifies policy actions consistent with near-term NDC commitments as well as sustainable development and gender equality goals. Tonga’s approach to its long-term strategy development illustrates how strategic participatory stakeholder processes can be used to build implementation plans for a resilient, equitable low carbon transition.

With support from Relative Creative, Climateworks and Global Green Growth Institute, the Government of Tonga developed a stakeholder engagement plan based on dialogue and consensus. Local facilitators helped identify and assemble a cross-sectoral stakeholder group representing government, industry and civil society, while a series of workshops were held to: sketch future visions; iterate and identify needed actions; and converge on a shared vision, sector pathways and priority actions. After each workshop, a report was sent back to the group for feedback, allowing issues to be identified for discussion in following workshops. The final strategy was then validated with the steering committee and stakeholder group to ensure it truly reflected the consensus reached through the dialogues. With limited access to reliable emissions data, the workshops used a qualitative process of divergent thinking (open-ended, creative) to develop possible visions and a convergent process (analytical, strategic) to refine them. Dialogues were conducted mostly in Tongan with local facilitators and incorporated culturally relevant metaphors and locally applicable contexts. Local facilitators helped identify and assemble a cross-sectoral stakeholder group representing government, industry and civil society, while a series of workshops were held to: sketch future visions; iterate and identify needed actions; and converge on a shared vision, sector pathways and priority actions. After each workshop, a report was sent back to the group for feedback, allowing issues to be identified for discussion in following workshops. The final strategy was then validated with the steering committee and stakeholder group to ensure it truly reflected the consensus reached through the dialogues. With limited access to reliable emissions data, the workshops used a qualitative process of divergent thinking (open-ended, creative) to develop possible visions and a convergent process (analytical, strategic) to refine them. Dialogues were conducted mostly in Tongan with local facilitators and incorporated culturally relevant metaphors and locally applicable contexts.

The stakeholder process undertaken here is a model that the Tongan government now considers the gold standard to be used in other policy development. It is also one from which other countries planning for net-zero implementation can learn.

 

Realizing Net-Zero Emissions: Good Practices in Countries

This case study is part of a working paper outlining a "Framework for Net-Zero Climate Action," emphasizing outcomes, enabling action areas and actions crucial for achieving net-zero emissions. It showcases real-world examples of countries implementing these strategies, offering valuable insights for others.

Read More

 

Read More Net-Zero Case Studies in this Series:

• Sweden’s Early Action to Legally Enshrine its Net-zero Target May Bolster Against Political Shifts
• Uruguay’s Wind Development Program Attracted Private Investment to Transform the Power Sector
• Canada Develops Legal Framework to Prioritize Net-Zero Implementation
• Singapore Mandates Corporate Climate Risk Disclosure to Mobilize Private Climate Finance
• Costa Rica’s Pioneering Net-zero Implementation Plan Attracts Investment, Withstands Political Changes
• Chile’s New Governance Structures Are Streamlining Net-zero Implementation
• South Africa Establishes an Inclusive Process Toward a Just Transition, with Broad Stakeholder Engagement
• A Sustained Portfolio of Policies Have Transformed Denmark’s Power Sector
• France Shapes Budget to Increase Net-zero-aligned Public Finance

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• Long-Term Climate Strategies
• National Climate Action
• Tracking Climate Progress

Authors Cynthia Elliott Clea Schumer Rebecca Gasper Katie Ross Neelam Singh

Singapore Mandates Corporate Climate Risk Disclosure to Mobilize Private Climate Finance shannon.paton@… Thu, 08/22/2024 - 13:11

In Singapore, the government recognizes climate change as an existential threat and has established innovative measures for progressing toward the country’s 2050 net-zero target. This case study explores means by which Singapore has mandated corporate climate risk disclosures to drive net-zero-aligned finance and investment decisions. By requiring companies to measure and disclose the climate-related risks to which their businesses are subject, Singapore is working to ensure that businesses, including listed financial institutions, are making decisions that propel – rather than hinder – progress toward a net-zero economy.

In 2016, in view of international advancements in sustainability reporting and the many benefits that sustainability reporting brings to both investors and issuers, Singapore’s national stock exchange, the Singapore Exchange (SGX), introduced requirements for every issuer listed in the Exchange to issue an annual sustainability report for financial years beginning in 2017 according to an interview with the Monetary Authority of Singapore (MAS)The reports are to include five primary components on a ‘comply or explain’ basis:

• An overview of environmental, social and governance (ESG) factors across the business and value chain related to the business’ product or service
• Policies and practices companies are already undertaking, and performance in the context of previously disclosed targets
• Future sustainability targets
• A sustainability reporting framework
• A board statement that affirms that the company has considered sustainability issues as part of its strategic formulation, determined the material ESG factors, and overseen the management and monitoring of these factors

Following a public consultation in 2021 on proposed enhancements to its sustainability reporting regime which received broad support from stakeholder groups, SGX introduced a phased approach to mandatory climate-related disclosures (CRD) based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Industries identified by the TCFD as most affected by climate change and the transition to a lower carbon-economy were prioritized to provide mandatory climate-related disclosures progressively from FY2023.

As part of the Government’s efforts to help companies strengthen capabilities in sustainability, Singapore also announced in February 2024 that it will introduce mandatory CRD aligned with the International Sustainability Standards Board (ISSB) standards in a phased approach. This is in line with the recommendations from the Sustainability Reporting Advisory Committee (SRAC), after a public consultation exercise in 2023. This phased approach will be implemented as follows:

• From FY2025, all listed issuers in Singapore will be required to report and file annual CRD using requirements aligned with the ISSB standards. SGX is currently consulting on amendments to its listing rules to implement these requirements. Listed issuers will be required to disclose their Scope 3 GHG emissions from FY2026.
• From FY2027, large non-listed companies (defined as those with annual revenue of at least $1 billion and total assets of at least $500 million) will be required to do the same, apart from disclosures of Scope 3 GHG emissions. Singapore’s Accounting Corporate and Regulatory Authority will consult on the necessary legislative amendments to implement this in due course and review the experience of listed issuers and large non-listed companies before introducing reporting requirements for other companies.

For financial institutions, in 2020, MAS consulted on and issued guidelines on environmental risk management for asset managers, banks and insurers to enhance these financial institutions’ environmental risk management practices. Environmental risk is increasingly recognized as a key global risk, with climate change at the forefront of these concerns. These risks not only give rise to reputational concerns but also bear a financial impact on such institutions and the assets they manage on behalf of their customers.

The guidelines are a call to action for financial institutions to enhance their resilience to and management of environmental risks by through the integration of environmental risk considerations into asset managers’, banks’, and insurers’ financing and investment decisions, and supporting a gradual and smooth transition towards an environmentally sustainable economy through channeling capital through their green financing and investment activities.  Critically, the guidelines were co-created with representatives from the banking, insurance and asset management sectors.

According to the guidelines, which came out in 2022, disclosures must be made in accordance with internationally recognized frameworks, such as the TCFD recommendations. MAS expects financial institutions’  approaches for managing and disclosing environmental risk to mature as methodologies for assessing, monitoring and reporting this risk evolve. As a result, MAS will update the guidelines it has issued as appropriate to reflect the evolving nature and maturity of risk management practices.

Ultimately, Singapore’s climate risk disclosures push companies, investors, banks insurers, and others to rigorously assess the climate-related risks they face. In so doing, financial actors across the economy can more accurately identify and manage the real risks they face from climate impacts, ideally steering them away from decisions likely to maintain an orderly transition to net zero. In the years ahead, it will be critical to monitor how Singapore’s mandatory climate risk disclosure framework has driven companies, investors and others across the economy to plan for and mitigate climate-induced threats and pivot to seizing the many opportunities a green transition brings.

 

Realizing Net-Zero Emissions: Good Practices in Countries

This case study is part of a working paper outlining a "Framework for Net-Zero Climate Action," emphasizing outcomes, enabling action areas and actions crucial for achieving net-zero emissions. It showcases real-world examples of countries implementing these strategies, offering valuable insights for others.

Read More

 

Read More Net-Zero Case Studies in this Series:

• Sweden’s Early Action to Legally Enshrine its Net-zero Target May Bolster Against Political Shifts
• Uruguay’s Wind Development Program Attracted Private Investment to Transform the Power Sector
• Canada Develops Legal Framework to Prioritize Net-Zero Implementation
• The Kingdom of Tonga Developed its LT-LEDS Through a Consensus-Based Stakeholder Engagement Process
• Costa Rica’s Pioneering Net-zero Implementation Plan Attracts Investment, Withstands Political Changes
• Chile’s New Governance Structures Are Streamlining Net-zero Implementation
• South Africa Establishes an Inclusive Process Toward a Just Transition, with Broad Stakeholder Engagement
• A Sustained Portfolio of Policies Have Transformed Denmark’s Power Sector
• France Shapes Budget to Increase Net-zero-aligned Public Finance

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• Long-Term Climate Strategies
• National Climate Action
• Tracking Climate Progress

Empowering Residents Helped Buenos Aires Transform Rodrigo Bueno Into a Climate-Resilient Community shannon.paton@… Thu, 08/15/2024 - 15:30

On the eastern edge of Buenos Aires, residents of the Rodrigo Bueno neighborhood take a break from pick-up soccer games and stretch out on grassy knolls. Further down the road, a kitchen buzzes with locals testing new recipes to feature at the neighborhood food hall. New housing blocks, featuring solar heating, frame older homes and border the shared civic space. But the people who lived in Rodrigo Bueno did not always enjoy this gentle cadence of life.

Rodrigo Bueno emerged in the early 1980s as a villa of informal, self-built homes on precarious reclaimed river land. The neighborhood did not have access to basic services such as clean water, sewers or electricity, or to schools, healthcare and other government services. As is often the case with informal settlements, Rodrigo Bueno was exposed to more significant climatic risks due to its high density and lack of ventilation, and in this case, dangerous proximity to a flood-prone canal.

Residents enjoy pick-up games of soccer on a newly constructed football pitch in Rodrigo Bueno. Photo by WRI.

For more than 10 years, the city tried to evict residents and remove their homes. But residents found ways to delay and block eviction, demonstrating a high degree of self-organization and self-efficacy. Meanwhile, creeping climate change sent floods lapping at their doors with poorly built homes risking collapse into the canal.

But in 2016, a new city administration dropped the legal battles over eviction and adopted a new strategy to address Rodrigo Bueno’s challenges, one that included collaboration and shared decision-making with the residents. The results would prove transformative.

A Collaborative Approach to Housing Improvements

The overall goals of the Rodrigo Bueno neighborhood upgrade project were multi-faceted and included an integrated approach that changed the focus from the government imposing changes to an inclusive process concentrated on housing integration, urban connectivity and socio-economic opportunities.

Changes to the neighborhood came from the work of Buenos Aires’ Housing Institute, which appointed a “Territorial Team” comprised of social workers, anthropologists and architects who spent time in Rodrigo Bueno meeting directly with residents every day. The team got to know every resident and learn their personal stories, whether it was celebrating new jobs and birthdays, listening to the struggles of immigrants starting a new life, or of children having difficulty getting to school. This slow, consistent and ongoing engagement over 8 years has fostered a strong sense of trust, enabling the neighbors and the Housing Institute to co-create neighborhood amenities and policies tailored to residents’ needs.

Catalina Chiavassa (center), a member of the Housing Institute’s Territorial Team, helps residents advocate for their needs, such as a health center and access to vaccinations. Photo by WRI.

One of the first changes came in 2017, when the Territorial Team played a crucial role in shaping and passing a new law that formally recognized Rodrigo Bueno residents' land and home ownership. Historically, residents of informal villas do not legally own the land where they’ve built their homes, living in constant fear of eviction and cutting them out of many municipal services and job opportunities.

Neighbors often watched over each other’s homes, but this precarity can have long-term economic and social consequences. “Initially, you had to sneak in and out [to work],” says Pedro Antonio Candia, a resident of 19 years. “Someone had to stay at home, or else someone might intrude. We would take turns, or a neighbor would watch the house.”

Following the new law, a series of physical changes began. A new street system was installed. Residents received home addresses and could receive mail and register for city services. Businesses could appear on maps. Emergency services could reach residents.

On this new street grid, 611 new energy-efficient, multi-family housing units, with solar-powered water heating systems, were constructed and offered to residents. Mortgage prices for new homes were determined by income, and the value of residents’ old self-built homes was discounted from the total cost.

Critically, residents had the option of staying in their own homes if they were not in immediate danger of collapse. Existing homes received structural, aesthetic and infrastructure upgrades. The choice to move or stay ensures that residents maintain autonomy and control throughout the neighborhood integration process. Those whose homes were too close to the canal edge were given the choice to swap with another resident who elected to move into a new building.

Creating Jobs Through Resilience and Sustainability

Resilience and environmental protection were also key elements to improving the Rodrigo Bueno community. In 2022, the Housing Institute began remediation work of the canal that forms one of the borders of the neighborhood.

So far, the canal has been cleaned up, a stormwater control system has been installed and a retaining wall was built to reduce flooding. When it’s completed, a “coastal edge” will support a promenade behind it, offering more public space to residents.

As seen from above, the Rodrigo Bueno neighborhood's historic area lies on the left, bordered by the fortified canal edge. Newer buildings are seen on the right, adjacent to the Costanera Sur wetland reserve. Photo by WRI.

The Housing Institute also led various skills and training workshops for residents, including a three-month workshop on gardening and agriculture, which led to the creation of the La Vivera Organica plant nursery in 2019. Setup by 14 local women, the nursery cultivates native species found at the adjacent Costanera Sur wetland reserve and serves as a source of fresh local produce.

As COVID-19 lockdowns began, La Vivera Organica provided fresh local food to the community and donated produce to the most vulnerable residents. The business has helped the neighborhood connect with the broader city as well. In 2021, a gastronomic patio was opened to serve both residents and visitors to the ecological preserve and the Hilton Buenos Aires committed to purchasing 100% of its organic produce from La Vivera.

Elizabeth Cuenca, a resident of Rodrigo Bueno and commercial manager at La Vivera, believes the new relationship between city government and residents has been instrumental to the success of the housing project. “With the neighbors’ participation as a priority, the results were better,” she says. “The [Housing Institute] knows what people need, but we knew exactly what we needed here.”

Upward Mobility and a Return to Roots

The Housing Institute’s gradual, participatory and holistic approach to improving the neighborhood is a critical lesson for many cities around the world. There are an estimated 1.2 billion urban dwellers who lack access to secure and affordable housing.

Linking social, economic and housing interventions is a combination that the Housing Institute is employing across other informal settlements in Buenos Aires, benefiting more than 70,000 residents. Each neighborhood has its own nuances and priorities, such as schools, healthcare centers or green spaces.

The Blanca Brizuela Duarte prepares and sells her native dishes from Paraguay at the “Gastronomic Patio,” an outdoor food hall in an ecological preserve. Photo by WRI

For Rodrigo Bueno, the results have gone beyond just material benefits. Blanca Brizuela Duarte, a resident since 1998 and owner of a stand in the neighborhood food hall, takes pride in sharing her traditional dishes from Paraguay. “This was part of the project, us being cooks who struggle to maintain our grandmothers’ old recipes,” she says. “I have customers from the neighborhood and from everywhere else – from the city, from San Telmo, from La Boca – they come to try our dishes, and they leave happily. That’s what this food court is about: It’s about love, about love for what we have.”

The 2023-2024 WRI Ross Center Prize for Cities celebrates projects and initiatives building momentum for climate-ready communities. From five finalists, one grand prize winner will be announced Sept. 25.

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• WRI Ross Center Prize for Cities

Authors Jen Shin Anna Kustar

RELEASE: World Resources Institute Welcomes Clara Barby to Global Board of Directors casey.skeens@wri.org Thu, 08/15/2024 - 12:00

WASHINGTON (August 15, 2024) — World Resources Institute (WRI) is pleased to announce that Clara Barby has joined its Global Board of Directors. Barby is Senior Partner at Just Climate, a climate-led investing firm, and a leader in private sector climate finance and sustainability standards.

“We are delighted to welcome Clara to our Global Board,” said Ani Dasgupta, President & CEO, WRI. “Clara has a wealth of experience developing standards and navigating capital markets across several of WRI’s geographies – including Colombia, Kenya, India, Southeast Asia and Brazil. Her deep professional interest in getting private capital flowing to the Global South is already a key part of WRI’s strategy. She will be an excellent partner in WRI’s efforts to enable broader system change in the global financial architecture."

Barby was previously Chief Executive of the Impact Management Project (IMP) and led a project with the International Financial Reporting Standards (IFRS) Foundation to establish the International Sustainability Standards Board (ISSB). The ISSB’s sustainability disclosure standards bring consistency and transparency to global capital markets, providing companies with an incentive to embrace sustainable business models.  She also previously led the sustainable and impact strategies for Bridges Fund Management and worked for Acumen’s Capital Markets team, investing in India and East Africa.

Alongside her current role at Just Climate, Barby serves on expert advisory groups for the Transition Finance Market Review, the Transition Plan Taskforce, the ISSB, and the Impact Investing Institute.

“I’m looking forward to working across WRI’s network to help finance and scale the investments needed to reduce carbon emissions, protect nature and improve people’s lives,” said Barby. “By convening diverse groups of stakeholders and lowering structural barriers for sustainable investments, we can help the capital markets enable the achievement of development objectives and contribute to equitable change for communities worldwide.”

Clara holds an MBA from the Institut Européen d'Administration des Affaires (INSEAD) as well as a bachelor’s degree in Greats from the University of Oxford. She was awarded a Commander of the British Empire (CBE) for services to International Sustainability Standards in the 2023 King’s New Year Honors List. She is based in the United Kingdom. 

About World Resources Institute
    
WRI is a trusted partner for change. Using research-based approaches, we work globally and in focus countries to meet people’s essential needs; to protect and restore nature; and to stabilize the climate and build resilient communities. We aim to fundamentally transform the way the world produces and uses food and energy and designs its cities to create a better future for all.  Founded in 1982, WRI has nearly 2,000 staff around the world, with country offices in Brazil, China, Colombia, India, Indonesia, Mexico and the United States and regional offices in Africa and Europe. More information at www.wri.org or on Twitter @WorldResources. 

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What 2024’s Historic Elections Could Mean for the Climate alicia.cypress… Wed, 08/14/2024 - 16:06 .main-content blockquote p { font-size: 1.5rem; }

This is the biggest year in modern history for elections around the globe. Citizens of at least 64 countries — collectively home to about half of the world’s population — have, or will, cast votes for national leaders in 2024. The implications of these elections for the climate and our shared future cannot be overstated.

In late July, the world experienced its hottest day ever recorded, after more than a year of consecutive monthly record-high temperatures. Relentless regional heatwaves, devastating wildfires and dire water shortages abound. The world’s most vulnerable people and communities, most of whom bear the least responsibility for climate change, are feeling its impacts most acutely.

4 Climate Stories That Define 2024

In a rapidly changing world with new events unfolding daily, global elections are shaping this year's biggest climate stories. Learn more:

Global leaders will play a critical role in addressing these interconnected crises and ensuring a livable future for everyone. In the latter half of this pivotal decade for climate action, the world needs leaders who will work to rapidly slash greenhouse gas emissions, shift their economies away from fossil fuels, protect and restore their lands, and invest in building communities’ resilience to climate shocks.

With some key races already decided, and as the main issue framing WRI’s 2024 Stories to Watch (the biggest issues of the year impacting people, climate and nature), here’s what WRI country and policy experts are saying about the world’s most consequential elections for climate so far:

Indonesia

Indonesia boasts some of the world’s most abundant natural resources, the management of which is inextricably tied to the archipelagic country’s presidential policies. Following its February election, former army general and current defense minister Prabowo Subianto is set to assume office on October 20. The widely-held expectation is that his administration — which includes the current president’s son, Gibran Rakabuming Raka, as vice president-elect — will continue to advance the previous administration’s policies, although whether the new administration will also continue outgoing President Joko Widodo’s climate commitments, remains to be seen.

Prabowo Subianto, Indonesia's defense minister, speaks at a campaign event. After winning the February 2024 election, the former army general will become Indonesia's next president on October 20.  Photo by SOPA Images Limited / Alamy Stock Photo.

“Economic development will still be the priority for the next five years, and there are wide opportunities for the country supported by businesses and other non-state actors to strengthen climate resilient, low carbon, and socially inclusive development,” says Arief Wijaya, managing director of WRI Indonesia.

The president-elect has already promised to secure national food sovereignty through the country’s food estate program, which will be expanded to more than 40 million hectares of degraded lands and forests in the country. This strategy will help reduce the pressure solely on Indonesia’s forests and encourage a mosaic landscape approach to restoration.

As the world’s leading exporter of palm oil, Indonesia plans to expand its production as part of a larger focus on biofuels. But to do so, it should encourage a sustainable palm oil certification.

"... there are wide opportunities for the country supported by businesses and other non-state actors to strengthen climate resilient, low carbon, and socially inclusive development."

— Arief Wijaya, WRI Indonesia

Lastly, as the incoming administration looks toward energy sovereignty, it hopes to expand mining of its vast resources of nickel, a critical mineral for electric vehicle batteries and other clean technologies. To reduce environmental impacts, the incoming administration will need to follow the existing plan created by Indonesia’s Ministry of Planning.

Because Indonesia’s incoming parliament will be a coalition of different political parties, the opposition will relatively lack the ability to challenge any potentially harmful policies. “The hope is to have the role of civil society organizations and non-state actors, including private sectors, to be more prominent for checks and balances of the government policies for the next administration,” Wijaya explains.

India

In India, more than 640 million citizens made their way to the polls amid scorching heat between April and June, marking the largest election the world has ever seen. Though climate change was not always highlighted as an electoral issue in the candidates’ campaigns, major party manifestoes included chapters on climate and addressed concerns about rural livelihoods and water, which are often exacerbated by climate extremes.

At a campaign rally before the elections, Prime Minister Narenda Modi waves to the crowd. The ruling Bharatiya Janata Party secured a third term in conjunction with two other parties. Photo by ZUMA Press Inc / Alamy Stock Photo.

On June 4, the ruling Bharatiya Janata Party secured a third term in conjunction with other parties, including regional leaders from Bihar and Andhra Pradesh — states that are highly vulnerable to floods and cyclones, respectively. This could mean that the national agenda might possibly see more mainstreaming of regional needs for climate resilience and a “just transition,” that ensures workers and communities aren’t left behind as the country moves toward a low-carbon future.

The country’s recent elections may not have significant climate implications on the international stage and there are likely to be a continuation of the country’s climate commitments aimed at expanding renewable energy to reach net-zero emissions by 2070.

South Africa

Thirty years after South Africa’s first free and fair elections, voters this May sent the country into a coalition-led government called the Government of National Unity (GNU). The African National Congress (ANC), the dominant political party in the country since Nelson Mandela became president in 1994, dropped its share of votes from 58% in 2019 to a little over 40% in 2024.

Increasing levels of unemployment, poverty and inequality, in addition to corruption at all levels of government and persistent electricity shortages and mismanagement, have been among the reasons cited for the drop in confidence in the ANC.

Following a deal to create the Government of National Unity, South Africa’s President Cyril Ramaphosa will serve a second term. Photo by Xinhua / Alamy Stock Photo.

After brokering a deal to create the GNU, which currently encompasses 10 political parties, President Cyril Ramaphosa will serve a second term. Ramaphosa has historically been a strong proponent of climate action and, specifically, a just transition. For example, he advocated for South Africa’s entrance into a Just Energy Transition Partnership in 2021, through which the U.S., EU and other countries have committed billions to support an equitable transition from coal reliance to clean energy in the country.

This climate ambition is expected to continue through Ramaphosa’s second term, including with Ramaphosa signing the long-awaited Climate Change Bill, providing the first legal basis in the country for acting on climate change. However, implementing costly and complex climate solutions could prove more challenging amid South Africa’s social and economic atmosphere.

Mexico

Mexico City made headlines in early 2024 amid speculation that the city’s taps could run dry in mere months. Fortunately, this “Day Zero” didn’t come to pass. But it highlighted Mexico’s wider water crisis: As of May, more than two-thirds of the country was experiencing moderate to severe drought. And water shortages are just one of the many growing threats facing Mexico as climate change intensifies.

"Both the cabinet announcements and the work priorities outlined by the president-elect send a positive signal regarding the importance that the climate and environmental agenda will have in the new administration."

— Avelina Ruiz, WRI México

But the country’s next administration could be uniquely positioned to address these challenges. President-elect Claudia Sheinbaum, who won on June 2 in a surprise landslide, is not only the country’s first female president, but has a PhD in Environmental Engineering with a strong track record of impact. As Mexico City’s mayor, Sheinbaum worked to expand public transit and deploy one of the world’s largest solar plants. As one of the authors of the preeminent international report on climate change, she’s helped raise awareness about the urgency of the issue and drive action on the global stage.

Avelina Ruiz, climate change manager at WRI México, highlighted the appointment of Alicia Bárcena as secretary of Environment and Natural Resources, who has an extensive track record in promoting the sustainable development agenda in Mexico and at the regional level as executive secretary of the Economic Commission for Latin America and the Caribbean. “Both the cabinet announcements and the work priorities outlined by the president-elect send a positive signal regarding the importance that the climate and environmental agenda will have in the new administration,” Ruiz said. 

Claudia Sheinbaum was elected Mexico’s president in June 2024. Photo by Luis E Salgado / Alamy.

After taking office on October 1, Sheinbaum will likely continue her efforts to expand mass transit and public mobility, alongside working to bolster food security through sustainable agriculture, conserve biodiversity and improve water management. She also campaigned on boosting renewable energy investment and promoting rapid decarbonization — although the current administration under President Andrés Manuel López Obrador, with whom Sheinbaum is closely aligned, has been criticized for backing domestic oil production and continuing the country’s economic reliance on oil production.

The country is expected to resume its role of international leadership by submitting its 2025 national climate commitment that will showcase how Mexico will achieve a just, resilient and low-emission economy.

European Union

Voters across 27 countries in Europe headed to the polls in June to participate in the European Parliament elections, which take place every five years. The center-right European People’s Party held onto its position as the biggest parliamentary group, but it will need to collaborate with the Social-Democratic Party (the second biggest group), the economic-liberal Renew party and left-wing Green group to achieve a centrist majority. The right-wing protest vote, for which immigration is a central issue, made notable gains, forming a new parliamentary group — called Patriots for Europe — that now constitutes the third largest group in the European Parliament.

The European Union’s goal of reducing carbon emissions by 90% from 1990 levels by 2040 remains a priority for the Commission, but Stientje van Veldhoven of WRI Europe, says the Commission will have to navigate a challenging political situation in several individual countries.

Ursula von der Leyen won a second mandate as European Commission president and, together with European Council President António Costa and Kaja Kallas leading foreign affairs, will chart the block’s next course on climate and sustainable development.   

“These three will have to make sure that they address some of the main concerns that the European voters have voiced, which center around the cost of living, defense and competitiveness,” says Stientje van Veldhoven, vice president and regional director for WRI Europe.

Van Veldhoven also notes that, concerningly, climate did not rank among those top three issue areas. Although, she says, while it's less visible, Green Deal proposals do fall under the banner of “industrial competitiveness.” These include a continued focus on energy transition, electricity grids and minerals.

Ursula von der Leyen, who won a second mandate as European Commission president for the European Union, speaks at a press conference in Brussels, Belgium. Photo by Xinhua / Alamy Stock Photo.

The EU must also shift its agricultural policies to help protect landscapes and adapt food production to a changing climate, but this stands to be contentious, as farmers throughout Europe have taken to the streets in recent years to protest environmental legislation. Efforts on nature restoration could face similar challenges.

The EU’s goal of reducing carbon emissions by 90% from 1990 levels by 2040 remains a priority for the Commission, but van Veldhoven says she expects the Commission will have to navigate a challenging political situation in several individual countries.

United Kingdom

In a landslide early-July victory, the United Kingdom’s Labour Party, led by Prime Minister Keir Starmer, won the country’s general election, marking the first shift in party rule since 2010. The change has brought with it a significant majority in the UK Parliament that supports climate action. “I think there's a real sense of excitement that the new government will be a strong force on climate, development and nature, both in terms of domestic implementation and also on the global stage,” says Edward Davey, head of WRI Europe’s UK office. He adds, however, that the country first needs to make meaningful progress at home in order to successfully resume a leadership position at the international level.

In a landslide, UK's Labour Party, led by Prime Minister Keir Starmer, won the elections in July. It was the first party shift in the UK since 2010. Photo by Alan Keith Beastall / Alamy Stock Photo.

That’s now a real possibility, given the range of climate policy priorities the Labour Party outlined in its manifesto and which it has already begun to deliver. Among them, the UK aims to achieve net-zero carbon emissions by 2050, a goal that will require planning system reform and a renewed focus on the just transition.

"I think there's a real sense of excitement that the new government will be a strong force on climate, development and nature, both in terms of domestic implementation and also on the global stage."

— Edward Davey, WRI Europe UK

Other significant climate priorities include a new 8.3 billion pound ($10.6 billion) institution to invest in leading energy technologies and support local energy production; the creation of a new national energy system operator; decisions about the future of nuclear power, carbon capture and storage and hydrogen; and new commitments on fresh water, sustainable land use, and biodiversity protection. In its first days in power, Labour already showed its commitment to advancing climate action by ending the previous administration’s block on onshore wind development.

Davey concludes that we will likely see action that centers on “making fast progress on net-zero implementation at home, coupled with a renewed focus on diplomacy and partnership with other countries. How strong that international leadership proves to be will also depend on whether the UK joins and drives high ambition climate alliances, as well as the pace and nature of its return to the UN’s goal for developed countries to spend 0.7% of their gross national income on international climate, nature and development finance.

France

After a second round of voting in France’s Parliamentary elections in early July, no one group won an absolute majority. A loose coalition of left-wing and environmental parties, the New Popular Front (NFP), won the largest number of seats in the National Assembly by a slim margin. President Emmanuel Macron’s centrist party and the far-right party led by Marine Le Pen came in close behind.

French election posters displayed in Moyaux, France. While no one party won an absolute majority in France’s recent parliamentary elections, the New Popular Front won the largest number seats in the National Assembly by a slim margin. Photo by Julian Eales / Alamy. 

Climate change was not at the forefront of these elections, overshadowed by issues like retirement and immigration policy. The country’s main green party saw its share of votes fall from 13% to just 5%, while it’s far-right party — which has opposed phasing down fossil fuels and other climate actions — saw its share rise to more than 30%.

NFP, which won the largest share of Parliamentary seats, specifically references the threat of climate change in its manifesto. It also promotes increasing renewable energy and expanding domestic production of clean technologies, among other climate-related priorities. Macron, who was first elected in 2017, has yet to appoint a new prime minister whose task will be to deal with the fragmented parliament (an unusual situation for France but common in other European Countries). At the moment of writing, the future figurehead of France’s political leadership, and the country’s trajectory on climate action, remain uncertain. 

Looking Ahead

With a few more months left in the year, many elections that will impact how the world responds to climate change are still to take place — including in the United States, the world’s second-largest source of greenhouse gas emissions and a central player in driving levels of climate finance.

To chart a more resilient future around the globe, it will be imperative for leaders and governments elected in 2024 to work together to raise their collective ambition — and climate finance to support that — at international settings like the UN’s 29th annual climate conference (COP29) in November. And they must work to rapidly accelerate action on the ground, starting by submitting stronger national climate commitments when they come due in early 2025.

The decisions and actions leaders take today — and public pressure and support for these — will impact the planet’s trajectory for generations to come.

As part of WRI’s Stories to Watch, WRI climate, country and policy experts have been following the 2024 elections and their potential impact on climate policies throughout the year. WRI expert contributors to this article include: Varun Agarwal, Edward Davey, Mani Bhushan Jha, Katie Ross, Avelina Ruiz, Stientje van Veldhoven, Tjokorda Nirarta "Koni" Samadhi, David Waskow and Arief Wijaya. This article was written by WRI editors Nicole Greenfield and Maggie Overholt.

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Banks Have Committed to Net Zero, but Aren’t on Track to Reach It margaret.overh… Wed, 08/14/2024 - 00:01

Building a sustainable future, in which people and nature thrive and climate change is held in check, is possible. The rewards will be vast, but getting there will require massive investments.

The International Energy Agency (IEA) estimates that the world needs to invest about $4 trillion annually by 2030 for clean energy alone. Add to this the cost of restructuring transportation, food systems, industry, shipping and much more. All must transform, and quickly, to slash greenhouse gas emissions this decade.

Banks will play a key role in this transition. To finance the shift toward sustainable business models and practices, companies will often rely on banks' lending and financial services. Recognizing this, banks are increasingly committing to support their clients and the broader low-carbon transition by aligning their financial flows with reaching "net-zero emissions" by 2050.

However, while the number of banks with net-zero commitments has grown, a closer look reveals that they are not on track to achieve their goals.

WRI built an online tracker to analyze how a sample of 25 banks, comprised of some of the largest banks by total assets and smaller firms playing a prominent role on net zero, are progressing on implementing their commitments. We found that, not only are banks off-track to meet net-zero targets, but many of their pledges are less ambitious than they seem at face value.

We also found that banks want to and can improve — if they follow leading practices in the industry.

Why Do Banks' Net-zero Commitments Matter?

Banks themselves don't produce a lot of direct greenhouse gas (GHG) emissions. But they do wield the power of financing. By prioritizing lending toward climate solutions and phasing out harmful financing, such as for fossil fuel expansion and businesses driving deforestation, banks can play a critical role in reducing emissions in just about every sector of the economy.

This is particularly true when it comes to financing green solutions. The world needs to rapidly raise capital for things like renewable energy, clean transportation, low-carbon buildings and more, and banks have a special capability to generate credit "out of thin air" thanks to their public backing. There are constraints on how much money banks can create, but they have enormous potential lending capacity which doesn't hinge on previously saved private capital.

Solar panels cover the roof of a large shopping mall in San Fernando, Philippines. Banks can leverage their extensive lending power to support investments in clean energy and other low-carbon technologies needed to meet the world's climate goals. Photo by MDV Edwards/iStock

In addition, banks can help companies access capital markets and raise debt and equity from investors who are increasingly focused on sustainability. And large commercial banks have relationships with companies across all sectors and industries, allowing them to influence clients across entire value chains to align with net zero. They can advise and push their clients on setting climate transition plans that will shift their business models and reduce carbon emissions.

Pressure on banks to fulfill this potential and drive positive social change is mounting. A broad range of stakeholders, including policymakers, shareholders and civil society, have called on banks to enable the net-zero transition and allocate capital in ways that benefit people, nature and the climate. But while major banks have committed to do so, their policies on the whole are not as strong as they need to be.

Where Do Banks' Current Commitments Fall Short?

To be effective, banks' net-zero commitments need to have both breadth and depth, covering a range of topics in detail. Alongside emissions reduction targets, they need to holistically integrate climate action into a bank's business model — from incentivizing senior leadership to pursue action on net zero, to leveraging influence with corporate clients and public policy. They must also account for broader societal and environmental impacts, such as nature-related risks, reducing deforestation, and protecting workers and communities who depend on carbon-intensive industries or are disproportionately affected by climate change (known as a "just transition").

Building on WRI's Green Targets Tool, our new Net Zero Tracker looks at 17 different indicators for a comprehensive view of banks' current climate commitments. Overall, our analysis showed that while banks have taken a range of approaches to net zero, many leave out key elements that should be part of an effective strategy.

At the same time, the devil is in the details. Rather than taking banks' headline numbers or announcements at face value, it's important to look "under the hood" to assess the true quality of policies and actions. Key details, such as the timeline of fossil fuel phaseout policies and whether capital markets activities are included in them, need to be addressed for a commitment to be considered high quality and credible.

Consider coal. According to the IEA, unabated coal power needs to be phased out in advanced economies by 2030 and globally by 2040. Banks can enable this by engaging with power companies and supporting their transition away from coal, including by financing its managed phaseout. Additionally, by withholding lending and capital market access, banks can increase funding costs and contribute to the early retirement of coal power plants.

Most banks in our sample have committed to a timeline to phase out coal financing, reflecting public policy goals. A few are moving faster than the IEA's timeline, having already divested or targeting global phaseout by as early as 2025. But despite this progress, the majority still omit certain forms of financing (such as corporate finance and advisory services) from their coal phaseout policies, or they set their revenue thresholds too high. As a result, many companies and activities which profit from coal aren't affected.

Our tracker aims to provide enough detail and examples of leading practices for stakeholders, including banks themselves, to assess progress on implementation and push for greater quality in net-zero commitments. 

Here are three key takeaways:

1) Despite Progress, Many Banks Have No or Weak Targets in High-emitting Sectors

Greenhouse gas emissions are mostly driven by energy, industry, agriculture, transportation and buildings. Decarbonizing these high-emitting sectors will be essential to curbing climate change and must be a fundamental component of banks' net-zero commitments.

Many banks started with general, vague commitments, but have now set specific emissions reduction targets for critical sectors. Most of these target oil and gas and power, and a few leading banks include additional carbon-intensive sectors like automotive, aviation, cement, steel and real estate. 

Still, most banks have not yet set targets for the majority of these "hard-to-abate" sectors.

Where banks do include them, targets are often set on a "physical emissions intensity" basis. That means they measure emissions to a unit of physical output such as tons of CO2 emitted per megawatt-hour. These can be useful when comparing banks' progress against broader industry benchmarks for decarbonization. "Absolute emissions targets," which aim to reduce the total amount of emissions by a specified amount, are more common for the oil and gas sector. Each method has benefits and limitations, so banks should disclose emissions on both an absolute and physical intensity basis to provide a fuller picture of how real-world emissions are being reduced.

A few banks have chosen less credible approaches. For example, "economic emissions intensity" targets calculate emissions per dollar of financing and are more susceptible to market volatility than physical or absolute emissions targets. Some banks have opted to set targets for asset classes or based on a portfolio alignment score.

2) Banks' Existing Targets Are Not Aligned with Limiting Warming to 1.5 Degrees C

We tracked the "portfolio emissions" banks reported from their activities in six key sectors — oil and gas, power, automotive, aviation, cement and steel — between 2019 and 2022, as well as their 2030 emissions reduction targets. Then we compared their progress to emissions-reduction pathways which would limit global warming to 1.5 degrees C (2.7 degrees F), the threshold scientists say is necessary to avoid the worst effects of climate change. (Pathways were calculated by the Transition Pathway Initiative based on the IEA's Net Zero Scenario.)

We found that, for most sectors, banks on average have not aligned their emissions reduction efforts to 1.5-degrees-C pathways and do not expect to do so by 2030. In other words, banks do not even plan to reduce their emissions as much as necessary — not to speak of actual implementation or follow-through.

In the auto sector, for example, banks' reported portfolio emissions in 2022 were on average 28% higher than where they should have been to align with reaching 1.5 degrees C. By 2030, they are projected to be 3 times as large as the benchmark.

Banks often provide little explanation on how they plan to address these emissions gaps and achieve net zero on time. What they must avoid is pursuing "paper decarbonization," where emissions are reduced only "on paper" through portfolio reshuffling or market volatility without tangible, real-world decarbonization efforts. Rather, banks must balance the shift in their lending allocation with their engagement efforts to continually support their clients in transforming their business practices.

One key challenge banks point out is the need for public policies that can enable decarbonization in high-emitting sectors, including the development of zero-carbon solutions. It can sometimes be forgotten, but major technological innovations have historically been heavily reliant on public policy and support. Some public sector support is already available for innovative zero-emissions technologies like advanced geothermal and hydrogen, financed through initiatives like the U.S. Department of Energy's Loan Programs Office. But more is needed.

On the part of banks, it is inconsistent to ask for climate-friendly public policies while at the same time supporting trade associations that oppose them — which some banks, particularly in the U.S., have done. We found that banks have started reviewing the alignment of their trade groups with net zero, but more work is needed to ensure full alignment.

3) Banks' Green Financing Isn't Enough, Either

Massive investments will be required to replace the current environmentally destructive economy and build a new sustainable one. For the energy sector alone, the IEA projects that investments in clean energy and fossil fuels need to reach a 10-to-1 ratio by 2030.

As part of their net-zero commitments, banks have made headlines for committing to mobilize billions to trillions of dollars towards green and social goals. We find that clean energy has been the largest category of green finance, with banks providing or facilitating finance toward, for example, renewable energy (such as solar and wind), clean transportation (such as auto loans for electric vehicles) and energy efficiency (such as green buildings).

But despite their headline-grabbing goals and reported progress, the banks we analyzed have averaged a 1.3-to-1 ratio of green to fossil fuel finance since they began reporting their green finance numbers. Other studies have found similarly low ratios. This scale is still far below the 10-to-1 ratio needed.

Making such comparisons can be challenging due to the nature of the data; our model may overestimate the proportion of green finance, as we use banks' own reported green finance numbers. These are shared on a voluntary basis, can be inconsistent, and generally include more financial instruments and mechanisms than what is calculated for fossil fuel finance (which banks are still reluctant to provide disclosures on). But, even under this overstated scenario, it is clear that green finance is not growing at the pace and scale needed to reach net zero.

A higher-level question also emerges: Is banks' green finance driving competition and creating more favorable lending conditions? Studies have shown that higher levels of banking competition can result in larger credit volume, lower interest rates for borrowers, and looser underwriting standards and lending terms — all of which could help speed the scale-up of green solutions. However, recent research suggests banks' commitments haven't translated to lower interest rates for green companies.

Based on these findings, it is unclear whether banks' green finance targets have been fully integrated into their lending and business development activities, including in the incentive structures for relationship managers and investment bankers. We found that about 70% of analyzed banks have introduced relevant sustainable finance metrics in the compensation packages of senior leadership, but similar incentives are needed throughout the organization to effect change.

Banks Want to Improve and Can Learn from One Another

When we talk with banks and their sustainability teams, two of their most common questions are: "What are our peers doing?" and "Are our practices ahead of or behind our competitors?" These questions demonstrate banks' willingness to keep improving and show how competitive pressure can fuel progress.

Peer pressure encouraging a "race to the top" is more important now than ever. Backlash from special interests and political forces in the United States that oppose sustainability efforts has led some banks to retreat, at least publicly, from some of their climate commitments. Further walk-backs could damage the rising ambition seen over the last few years and stall the progress needed to achieve a low-carbon, sustainable future.

Banks need to reverse course and double down on their net-zero commitments — not only to meet their own climate goals, but also to profit from the new business opportunities tied to the climate transition. Leaning into sustainable finance can also help protect banks against growing climate-related financial risks.

As our tracker shows in detail, banks have taken different approaches to align their businesses with net zero. Some have developed pioneering methods that all banks can adopt to improve their own business models and the banking industry as a whole. As our collective understanding of the needs for net zero continues to evolve, so, too, will these leading practices.

Banks cannot single-handedly align our economies to net zero. But on what they can do, they must give their all.

Explore Banks' Net-zero Commitments

WRI's Financial Institutions Net Zero Tracker provides an in-depth, interactive look at 25 banks' climate commitments, highlighting which ones are leading the way — and lagging behind. View a summary of each bank's performance below or explore the full tracker here.

 

This article reflects the independent views of the authors. The Financial Institutions Net Zero tracker was partially funded by a grant from Bank of America.

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The Latest Data Confirms: Forest Fires Are Getting Worse sarah.parsons@… Tue, 08/13/2024 - 07:00

The latest data on forest fires confirms what we've long feared: Forest fires are becoming more widespread, burning at least twice as much tree cover today as they did two decades ago.

Using data from researchers at the University of Maryland, recently updated to cover the years 2001 to 2023, we calculated that the area burned by forest fires increased by about 5.4% per year over that time period. Forest fires now result in nearly 6 million more hectares of tree cover loss per year than they did in 2001 — an area roughly the size of Croatia.

Fire is also making up a larger share of global tree cover loss compared to other drivers like mining and forestry. While fires only accounted for about 20% of all tree cover loss in 2001, they now account for roughly 33%.

This increase in fire activity has been starkly visible in recent years. Record-setting forest fires are becoming the norm, with 2020, 2021 and 2023 marking the fourth, third and first worst years for global forest fires, respectively.

Nearly 12 million hectares — an area roughly the size of Nicaragua — burned in 2023, topping the previous record by about 24%. Extreme wildfires in Canada accounted for about two thirds (65%) of the fire-driven tree cover loss last year and more than one-quarter (27%) of all tree cover loss globally.

How Do We Measure Tree Cover Loss From Fires?

Researchers at the University of Maryland used Landsat satellite imagery to map the area of tree cover lost to stand-replacing forest fires (fires that kill all or most of the living overstory in a forest) annually from 2001 to 2023. While loss from stand-replacing fires is not always permanent, they can cause long-term changes to forest structure and soil chemistry, making them different from lower intensity understory fires that provide ecological benefits for many forests. The latest data provides a long-term view of these types of fires over the last 23 years at a higher resolution than other global burned area data sets. It also helps researchers distinguish the impact of tree cover loss from fires and loss from other drivers like agriculture and forestry. Learn more about the data on Global Forest Watch.

Climate Change Is Making Fires Worse

Climate change is one of the major drivers behind increasing fire activity. Extreme heat waves are already 5 times more likely today than they were 150 years ago and are expected to become even more frequent as the planet continues to warm. Hotter temperatures dry out the landscape and help create the perfect environment for larger, more frequent forest fires.

When forests burn, they release carbon that is stored in the trunks, branches and leaves of trees, as well as carbon stored underground in the soil. As forest fires become larger and happen more often, they emit more carbon, further exacerbating climate change and contributing to more fires as part of a "fire-climate feedback loop."

This feedback loop, combined with the expansion of human activities into forested areas, is driving much of the increase in fire activity we see today. As climate-fueled forest fires burn larger areas, they will affect more people and impact the global economy.

Here's a look at some of the places most impacted by increasing forest fires, based on the latest data:

Mounting Temperatures Are Fueling More Severe Fires in Boreal Forests

The large majority — roughly 70% — of all fire-related tree cover loss between 2001 and 2023 occurred in boreal regions. Though fire is a natural part of how boreal forests function ecologically, fire-related tree cover loss in these areas increased by a rate of about 138,000 hectares (around 3.6%) per year over the last 23 years. That's about half the total global increase between 2001 and 2023.

Climate change is the main cause of increasing fire activity in boreal forests. Northern high-latitude regions are warming at a faster rate than the rest of the planet, which contributes to longer fire seasons, greater fire frequency and severity and larger burned areas.

In 2021, for example, Russia saw 5.4 million hectares of fire-related tree cover loss, the most recorded for that country in the last 23 years. This was due in part to prolonged heatwaves that would have been practically impossible without human-induced climate change.

In 2023, record-breaking wildfires in Canada burned almost 7.8 million hectares of tree cover, or about 6 times the country's annual average for 2001-2022. As forests burned, they released nearly 3 billion tons of carbon dioxide into the atmosphere — roughly equivalent to the amount of carbon that India (the world's third largest emitter) generated from fossil fuel use in 2022. These extreme wildfires caused billions of dollars in property damage, displaced thousands of people from their homes, and spewed air pollution that traveled as far as Europe and China. They were largely fueled by warmer-than-average temperatures and drought conditions, with some parts of the country experiencing temperatures up to 10 degrees C (18 degrees F) above normal.

This trend is worrying for several reasons. Boreal forests store 30%-40% of all terrestrial carbon globally, making them one of the largest carbon storehouses on the planet. Most carbon in boreal forests is stored underground in the soil, including in permafrost, and has historically been protected from the infrequent and lower severity fires that occur naturally. But changes in climate and fire activity are melting permafrost and making soil carbon more vulnerable to burning.

In addition, fires that are more frequent and more severe than normal can drastically alter the structure of forests in boreal regions. Boreal forests have long been dominated by coniferous tree species like black spruce, but frequent fires can reduce the resilience of black spruce and other conifers and effectively eliminate them from the landscape, allowing deciduous trees to take their place. Such changes could have wide-ranging impacts on biodiversity, soil dynamics, fire behavior, carbon sequestration and cultural traditions. In some extreme cases, when fires are especially severe or frequent, trees may fail to regrow at all.

These shifting forest dynamics could eventually turn boreal forests from a carbon sink (an area that absorbs more carbon than it emits) into a source of carbon emissions. In fact, recent research shows that boreal forests are already losing their ability to store carbon.

Firefighters put out the remains of a blaze in Alberta, Canada in July 2024. Canada's 2023 wildfire season burned 6 times more forest than the previous 20 years, on average, and summer 2024 indicated the start of another intense fire season. Xinhua/Alamy Stock Photo Agricultural Expansion and Forest Degradation Are Stoking Fires in Tropical Forests

In contrast to boreal forests, stand-replacing fires are not a usual part of the ecological cycle in tropical forests. Yet fires are increasing in this region as well. Over the last 23 years, fire-related tree cover loss in the tropics increased at a rate of about 41,500 hectares (around 9%) per year and accounted for roughly 15% of the total global increase in tree cover loss from fires between 2001 and 2023.

Though fires are responsible for less than 10% of all tree cover loss in the tropics, more common drivers like commodity-driven deforestation and shifting agriculture make tropical forests less resilient and more susceptible to fires. Deforestation and forest degradation associated with agricultural expansion lead to higher temperatures and dried out vegetation, creating more fuel and allowing fires to spread faster.

El Niño and Tropical Forest Fires

In addition to climate and land-use changes, wildfire risk in the tropics is further fueled by El Niño events. These natural climate cycles recur every 2-7 years, causing high temperatures and below-average rainfall in certain parts of the world. During the 2015-2016 El Niño season, tree cover loss due to fires increased 10-fold in the tropical rainforests of Southeast Asia and Latin America. The strongest El Niño event since 2015-2016 emerged in June 2023 and officially ended in May 2024.

In addition, it is relatively common in tropical regions to use fires to clear land for new pasture or agricultural fields after trees have been felled and left to dry. This tree cover loss is not attributed to fires in our analysis because the trees have already been cut down. However, during periods of drought, intentional fires can accidentally escape newly cleared fields and spread into surrounding forests. As a result, almost all fires that occur in the tropics are started by people, rather than sparked by natural ignition sources like lightning strikes. And they are exacerbated by warmer and drier conditions, which can cause fires to rage out of control.

In Bolivia, for example, agricultural expansion and droughts have led to a significant increase in the amount of fire-related tree cover loss over the last two decades. This increase in fire activity is threatening some of the world's most iconic and protected places, such as Noel Kempff Mercado National Park, a UNESCO World Heritage Site that is home to thousands of species and is one of the largest intact parks in the Amazon.

Similar to boreal forests, increasing tree cover loss due to fires in the tropics is causing higher carbon emissions. Previous studies found that in some years, forest fires accounted for more than half of all carbon emissions in the Brazilian Amazon. This suggests the Amazon basin may be nearing or already at a tipping point for turning into a net carbon source.

Heatwaves and Shifting Population Patterns Are Increasing Fire Risk in Temperate and Subtropical Forests

Historically, fires in temperate and subtropical forests have burned less area than boreal and tropical forests: Combined, they accounted for 15% of all fire-related tree cover loss between 2001 and 2023. But the data shows that fires are increasing in these regions as well, by about 34,300 hectares (roughly 5.3%) per year. While temperate and subtropical areas tend to contain a larger proportion of managed forests — which can house fewer species and store less carbon than natural ones — fires in these regions still pose significant risks for people and nature.

As with boreal forests, climate change is the primary driver behind the increasing fire activity in temperate and subtropical forests. For example, heatwaves and summer droughts play a dominant role in driving fire activity across the Mediterranean basin. In 2022, record-breaking heat and drought in Spain resulted in more than 70,000 hectares of tree cover burned, the largest amount since 2001.

A large wildfire blazes near Barcelona, Spain in 2022. The country saw extreme fire activity that year, fueled in part by record-breaking heat and drought conditions. Photo by Antonio Macias/iStock

Land-use changes and shifting populations are also compounding the impacts of climate change in these regions. In Greece, a combination of heatwaves, drought, and large plantations of highly flammable non-native species (like Eucalyptus) created ideal conditions for extreme wildfires in 2021 and 2023. In Europe more broadly, the abandonment of agricultural land in recent years has been followed by excessive vegetation growth that has increased fire risk.

In the United States, natural lands are rapidly being converted into "wildland-urban interfaces," or places where homes and other manmade structures intermingle with trees and vegetation. This increases the risk of fire ignitions, damage and loss of life. In 2022, wildfires in the U.S. burned nearly 1 million hectares of tree cover and caused roughly $3.3 billion in damages. One of the largest fires that year, California's Mosquito Fire, burned thousands of hectares of forest in and near areas classified as wildland-urban interfaces, destroying 78 structures in nearby communities.

Both the annual cost and number of deaths from wildfires in the United States have increased over the past four decades. As human activities continue to warm the planet and reshape the landscape, deadly, multi-billion-dollar disasters like these will likely become more common in the U.S., Europe and elsewhere.

How Do We Reduce Forest Fires?

The causes of increasing forest fires are complex and vary by geography. Much has been written about how to manage wildfires and mitigate fire risk, but there is no silver bullet solution.

Climate change clearly plays an important role in driving more frequent and intense fires, especially in boreal forests. As such, there is no solution for bringing fire activity back down to historical levels without drastically reducing greenhouse gas emissions and breaking the fire-climate feedback loop. Mitigating the worst impacts of climate change is still possible, but it will require rapid and significant transformations across all systems.

In addition to climate change, human activity in and around forests makes them more susceptible to wildfires and plays a role in driving higher levels of fire-related tree cover loss in the tropics and elsewhere. Improving forest resilience by ending deforestation and forest degradation is key to preventing future fires. So is limiting nearby burning that can easily escape into forests, particularly during periods of drought. Incorporating wildfire risk mitigation into forest management strategies in fire-prone regions would help protect forest carbon and create jobs and support rural communities at the same time.

While data alone cannot solve this issue, the recent data on fire-driven tree cover loss on Global Forest Watch, along with other fire monitoring data, can help us track fire activity in both the long term and in near-real-time to identify trends and develop targeted responses.

 

This article was originally published in 2022. It was last updated in August 2024 to reflect the latest data on global tree cover loss. 

forest_fire_borneo.jpg Forests deforestation fires agriculture Climate climate science Type Finding Exclude From Blog Feed? 0 Authors James MacCarthy Jessica Richter Sasha Tyukavina Mikaela Weisse Nancy Harris

World Forest ID Receives Mulago Award ciara.regan@wri.org Thu, 08/08/2024 - 17:54

A project co-created by WRI in 2017 has been recognized with a prestigious Mulago Award in light of its invaluable contribution to forest legality.

Jade Saunders, executive director of World Forest ID (WFID), is the recipient of the Mulago Foundation’s Henry Arnhold Fellowship, which recognizes individuals with groundbreaking ideas and the leadership capabilities to implement them effectively.

World Forest ID was created by WRI, the Royal Botanic Gardens-Kew, USFS-International Programs and others, bringing together expertise in science, traceability and forestry to create a new approach to species and origin verification for forest risk commodities, including timber. Initially a consortium, WFID became an independent non-profit organization in 2021 with staff and partners working in 48 countries.

WFID creates comprehensive reference data and unique origin models to enable traceable and transparent forest-connected supply chains. It made global headlines in June 2024 for its role in helping authorities seize hundreds of tons of Russian and Belarussian timber that had entered the European market illegally, in violation of EU sanctions.

Saunders has served as executive director at WFID since 2022. Under her leadership, organizational funding has more than doubled as a result of rapid donor diversification and a growing range of dynamic and quantifiable real-world impacts. She has worked on forest governance, trade and environmental crime for over 20 years, most notably as an associate fellow of the Environment and Society Programme at Chatham House. Saunders also held policy analyst roles at the European Forest Institute and Forest Trends.

In reference to the Mulago Award, Saunders said, “Traceability is so often seen as a technical endeavor, something that happens behind closed doors, in proprietary systems — rather than a concept that, if delivered through objective science, at the landscape scale, and for the common good, has the power to transform entrenched inequalities in the global commodity system.”

“WRI and the other organizations that came together to found World Forest ID understood that opaque and unaccountable supply chains hurt foresters and farmers as much as they hurt responsible consumers and investors, and that recent innovations in science, tech and data meant that a landscape scale approach was suddenly viable,” Saunders added.

WRI continues to collaborate with WFID on several projects, including building scientific testing capacity in Indonesia and supporting key partnerships with governments such as Norway and the United States. WFID is also a founding member of the Nature Crime Alliance.

Dr. Charles (Chip) Barber, director for Natural Resources Governance and Policy at WRI, as well as a member of the WIFD board, said, “Seeing WFID go from strength to strength since its inception in 2017 is extremely rewarding, and is testament to WRI’s vision in supporting scientific solutions to nature crime, including illegal timber trafficking. Jade has been a key driver in this success, and we are delighted that she has been recognized by the Mulago Foundation.”

Previous WRI awardees of the Mulago Award include former Global Forest Watch Deputy Director Rachael Petersen (2016), former Global Forests Program Director Nigel Sizer (2019) and current Global Director for Food, Land and Water Crystal Davis (2016).

logging.jpg Forests Forests Forest Legality illegal logging Type Project Update Exclude From Blog Feed? 0 Authors Luke Foddy

Can Clean Hydrogen Fuel a Clean Energy Future? alicia.cypress… Tue, 08/06/2024 - 15:00

As pressure to find alternatives to climate-harming fossil fuels increase, hydrogen is emerging as a potential source to decarbonize everything from electricity production to transportation.

Advancement in technologies that make it possible to produce hydrogen with zero or little greenhouse gas emissions is fueling much of its popularity, along with help from some hefty U.S. government subsidies and investments. The U.S. Department of Energy (DOE) also recently set national goals to increase annual “clean hydrogen” production from nearly zero to 10 million metric tons by 2030; and to 50 million metric tons by 2050.

Clean hydrogen simply means the processes and methods used to produce hydrogen emit zero or nominal fossil fuel or greenhouse gas emissions. But what exactly are those methods?  Is clean hydrogen a viable and realistic alternative to fossil fuels? And how safe is it?

Here, we answer these and other key questions.

What Is Hydrogen Fuel?

Hydrogen is the most abundant element in the universe, present in water and nearly all living things, like plants and animals. It is a source of energy and can be used as fuel or raw material (also known as feedstock) in several applications including transportation, like fuel-cell electric vehicles, and industrial processes, like making fertilizer. It does not inherently emit greenhouse gases — its most common by-products are water vapor and heat when used as a fuel. Compared to other fuels, hydrogen contains the most amount of energy by weight — around three times that of gasoline. Energy from a kilogram of hydrogen is nearly equivalent to energy from a gallon of gasoline.

Hydrogen production can, however, emit significant greenhouse gases depending on how it’s made.

Currently, 95% of hydrogen is made from fossil fuels, typically via a process known as steam methane reforming (SMR), in which water is heated at high temperatures to produce steam that reacts with natural gas and produces hydrogen and carbon dioxide (CO2). This process emits significant greenhouse gases — 10 kilograms of CO2 equivalent per kilogram of hydrogen (kg CO2e/kg H2) to 14 kg CO2e/kg H2 — an amount similar to the carbon emissions from producing and burning a gallon of gasoline. Fossil-based hydrogen can also be produced from coal gasification, which has even higher emissions.

What Is Clean Hydrogen and How Is it Made?

Unlike traditional hydrogen fuel, clean hydrogen is made with nominal, or ideally no, greenhouse gas emissions. It is drawing much attention because of its promising role in decarbonization.

Several methods already exist to produce clean hydrogen, including:

• Natural gas with carbon capture and storage (blue hydrogen): This method of producing hydrogen processes natural gas using traditional SMR with carbon capture and storage (CCS) to permanently sequester the resulting CO2. This is the easiest pathway to clean hydrogen production because it builds on the existing method of production.
• Electrolysis (green hydrogen): Electrolytic hydrogen is produced from water molecules split with energy generated from renewable electricity. If done right, this can be a carbon-free system since the energy input comes from wind, solar or other zero-emissions electricity sources, and the only byproduct is oxygen.
• Biomass gasification with carbon capture and storage (turquoise hydrogen): Biomass, including plants and waste, is heated without combustion to produce a mixture of hydrogen, carbon monoxide and carbon dioxide. CCS sequesters the resultant carbon dioxide underground. Because the CO2 originated from plants, the whole system can have negative emissions if the biomass source is sustainable (such as using waste) to avoid deforestation and land conversion.
• Geologic (white/natural hydrogen): This direct source of hydrogen comes from the Earth’s subsurface and may be continuously generated. It can be extracted through techniques like what’s used for oil and gas. Previously thought to exist in very limited quantities, recent exploration and understanding suggest there may actually be trillions of tons.
• Nuclear (pink hydrogen): Nuclear hydrogen can be generated in the same way as electrolytic hydrogen but powered by nuclear energy instead of wind or solar. This pathway can also use high temperature nuclear heat directly to split water molecules into hydrogen and oxygen.

Each of these pathways is, at first blush, cleaner than hydrogen conventionally produced from fossil fuels. Yet the circumstances around how they are implemented matter greatly. Electrolytic hydrogen connected to the electricity grid and produced without ample safeguards, for example, can induce more emissions than fossil-based hydrogen if it is not produced using the “three pillars” of cleanliness, which means new sources of clean energy (the first pillar) are produced within the same region (the second pillar) and the same hour (the third pillar).

The greater context is important as well. While natural gas using SMR coupled with CCS can reduce existing production’s carbon intensity and work with current infrastructure, it will be important to implement other types of clean hydrogen to fully wean the economy from fossil-based energy sources.

Can Hydrogen Truly Be Clean?

 The carbon intensity of the production process determines whether hydrogen is “clean.” In theory, avoiding production emissions should be straightforward: clean electricity-based methods won’t produce CO2 or fossil-based methods are coupled with CCS to avoid most carbon emissions. In practice, there are complicated factors.

Electrolysis powered directly and only by clean energy sources (such as renewables or nuclear) will not induce any emissions because it only operates when zero-carbon electricity is being generated. An electrolyzer plugged in to the wider electricity grid, however, runs the risk of using electricity generated by fossil fuels, resulting in emissions. This is why the U.S. Department of the Treasury has proposed (but not yet finalized) tax credit rules requiring grid-connected electrolysis to verify that the clean energy it uses does not take energy from an existing user and follows the three pillars. Not doing so risks creating even more emissions than conventional SMR.

As for SMR, capturing 90% of emissions for storage is necessary, but not assured. The system must capture both the carbon stripped from natural gas during the reforming process as well as the carbon from burning natural gas to heat the process. Additionally, using carbon capture technology requires electricity which can add to emissions. A review of lifecycle intensities found that the carbon emissions intensities of using SMR with CCS for hydrogen production range from about 1 kg CO2e/kg H2 to 8 kg CO2e/kg H2, depending on a capture rate between 96% and 52%. For comparison, typical carbon emissions from fossil-based hydrogen production are estimated at 9 kg CO2e/kg H2.

Some of those studies may not account for methane leakage from venting, equipment and pipelines, which can be a significant contributor to the carbon-intensity of natural gas processes. Methane presents a significant near-term climate warming risk, with more than 80 times the warming potential of carbon dioxide over a 20-year timeframe. Annual upstream methane leakage in the United States is highly variable — estimated at 1.5% but possibly up to 9% in some fields.  

These details are crucial in determining exactly how clean a production pathway is. Factors like leakage, capture rates, when and where renewable electricity is sourced for energy are all germane to the ultimate emissions from clean hydrogen production. For example, DOE estimates that SMR with CCS would require a 95% capture rate, average U.S. grid emissions and a 1% methane leakage rate to achieve DOE’s highest allowable emissions rate to be considered as clean hydrogen (4kgCO2e). But if done properly, the benefits are clear: Producing all the hydrogen needed by 2050 (528 million metric tons globally) through clean electrolysis versus the traditional method, for example, would save 1.2 gigatons of CO2 per year, the equivalent carbon emissions from 285 million gasoline-powered cars driven in a year (equal to just over all the cars registered in the United States). So, it is important to get the details right, with the right guardrails.

Is Hydrogen Safe?

Once produced, hydrogen needs to be transported — either in gaseous or liquid form —to where it’ll be used, such as at an industrial plant or fueling station, and then stored.  In its liquid form, hydrogen needs ultra-cold systems because its boiling point is -423 degrees F, requiring cryogenic liquid tanker trucks for transportation and insulated tanks for storage. At ambient temperatures in its gaseous form, hydrogen is extremely lightweight and can be transported in pipelines and stored in high pressure tanks.

Theoretically, hydrogen is safer to handle and use compared to other fuels produced from natural gas, gasoline and diesel. It also does not contain carcinogens, requires a lot of oxygen to explode and does not burn as hot as typical fossil fuels. However, if it does ignite, its colorless and odorless properties produce invisible flames, creating certain safety challenges that will need to be solved for scaled use, particularly its transport and storage.

Hydrogen is lighter than air, and while it disperses rapidly if leaked, it reacts in the atmosphere in ways that increase the concentration of greenhouse gases like methane or ozone, increasing their warming impact. Preventing leaks is therefore critical and special equipment and processes like robust leakage monitoring, flame detection systems and good ventilation can help. Hydrogen also poses an added risk to natural gas pipelines during transport because it makes metals like steel brittle and prone to failure.

Producing hydrogen near facilities that use it is one solution to minimize risks. Adhering to existing codes and safety standards developed by scientists who have used hydrogen for decades to make chemicals, rocket fuel, and refine petroleum will also be necessary. And a robust regulatory framework focusing on safety will need to be developed and implemented at the same time as we ramp up clean hydrogen production, while research on safety and monitoring must continue.

Is Clean Hydrogen in the US Economically Viable?

While current costs associated with electrolyzers and carbon capture technology make hydrogen more expensive than conventionally produced, fossil-fuel based methods, public and private sector dollars can help the clean hydrogen industry get off the ground, leading to lower prices as the industry scales up.

The United States has made significant investments to build a market for clean hydrogen, with the DOE setting an overarching goal to reduce the cost of clean hydrogen by 80%, to $1 per kilogram in a decade’s time. Congress passed the Bipartisan Infrastructure Law and Inflation Reduction Act to advance those goals, providing substantial subsidies for hydrogen development. The law created the $8 billion Regional Clean Hydrogen Hubs (H2Hubs) Program, $1 billion Clean Hydrogen Electrolysis Program and allocated $500 million to Clean Hydrogen Manufacturing and Recycling RD&D. The H2Hubs program also reserves $1 billion in support for clean hydrogen offtakers — or users — in efforts to drive market certainty.  

But it is the Inflation Reduction Act’s generous 45V tax credit that creates the strongest incentive for clean hydrogen production. It provides tiers of tax credits to clean hydrogen producers — up to $3 per kilogram to those producing hydrogen with the fewest emissions. This tax credit far exceeds the very successful renewable energy tax credits that spurred that market in previous decades, providing around three times the value of those renewable energy tax credits on a dollars per kilowatt hour basis (inflation adjusted). 

The U.S. government’s heavy investment in clean hydrogen aims to stimulate early production and demand, with hopes to soon unlock investment from the private sector. Federal investments can also guide how states integrate clean hydrogen in their path to net-zero emissions. California, for example, is well placed to lead on electrolytic and waste biomass hydrogen production given its natural resources and how it approaches regulation at the state level and can take cues from what's happening at the federal level. And while the influx of public dollars is key to launching this burgeoning industry, it’s also critical that these investments guide the market toward the cleanest production and best uses.

For private investors, the uncertainties of an early industry may make it more challenging to commit dollars. But in areas where a transition to clean hydrogen is necessary for decarbonization, private investment is needed to support a system transition. For example, some chemical feedstocks and processes like fertilizer and petrochemical production are wholly reliant on hydrogen produced by SMR or coal gasification and have no easy alternatives, all while accounting for about 5% of global emissions. As these industries look to decarbonize and tackle emissions by exploring cleaner hydrogen pathways, private investment can help.

Where Does Clean Hydrogen Make the Most Sense?

Clean hydrogen has the potential to substantially reduce emissions, but there are instances where it’s better used over others.

Industries already reliant on fossil-based hydrogen fuel immediately win when switching to cleaner methods of hydrogen production. Petroleum refining and fertilizer production, for example, consume over 90% of the hydrogen fuel produced today — and using electrolytic hydrogen for fertilizer production, for example, could decrease greenhouse gas emissions by up to 30 million metric tons of CO2 equivalent in the U.S. alone, according to a WRI analysis of data from the Environmental Protection Agency and the Department of Energy. This is equivalent to the amount of carbon emissions from annual electricity use in nearly 6 million homes.

Several other hard-to-abate, heavy industries are promising candidates as well — these are arenas where other technologies may not be economical or available to support decarbonization in these sectors. These include steel, freight, long-distance shipping and long-term energy storage — industries where, for example, hydrogen can serve as an input or can be stored as an energy source.

On the flip side, other arenas make less sense for hydrogen use, since utilizing alternative sources of energy when available is often simpler, more affordable, safer and/or more convenient. An easy example is cars — electrifying cars versus running them on hydrogen fuels is cleaner and more efficient; the technology is more mature; and current policy supports increased production, infrastructure buildout and consumer adoption. Other cases, like blending hydrogen with natural gas for power generation, as many announced projects seek to do, reduce emissions by 10% in best case scenarios but increase emissions by 70% in worst case scenarios. These are instances where hydrogen is not the best solution.

How Can Clean Hydrogen Be Viable for Widespread Use?

Clean hydrogen holds great promise for replacing fossil fuels in many sectors. While it should not be looked to as a universal energy solution because there are cheaper, more efficient ways to decarbonize many applications, prioritizing its use in key emissions-intensive sectors like petrochemicals and fertilizers can help reduce emissions.

Despite significant U.S. government commitments to build out clean hydrogen production, however, more work is needed to scale the industry. More attention should be dedicated towards bolstering demand for clean hydrogen. Hubs — regions that host clean hydrogen producers and offtakers in close proximity — require more help in connecting supply with the demand. For end users that are not near a hub, nascent transport infrastructure will need to be built — the pipelines, barge, rail or trucking infrastructure that can support the movement of the hydrogen safely and without leaking. More research is also needed: Geologic hydrogen has incredible potential as a clean hydrogen source that can be directly harvested from the Earth, but there remain many unknowns. Additionally, more policy development that ensures hydrogen is truly clean is also critical, at both the state and federal level.

Importantly, what happens today will set the standards for the future. Now is a critical time to prioritize both the cleanest production and the best use cases.

clean-hydrogen.jpg Energy United States Clean Energy U.S. Climate Policy-Hydrogen Climate GHG emissions low carbon development industry Type Explainer Exclude From Blog Feed? 0 Authors Serena Li Zach Byrum Ankita Gangotra Angela Anderson

How Separate Climate Targets Can Help Avoid Overreliance on Carbon Removal shannon.paton@… Tue, 08/06/2024 - 08:40

The science is clear: To achieve its climate goals, the global community will need to reach net-zero carbon dioxide (CO2) emissions by midcentury. Meeting that target will require deep and rapid emissions reductions in addition to large-scale carbon dioxide removal (CDR). Activities that remove CO2 directly from the atmosphere range from natural, conventional approaches like growing trees to more novel, technological approaches like direct air capture and carbon mineralization.

CDR is necessary for meeting our climate goals, but it must complement, not replace, the steep emissions reductions that would come with switching from fossil fuels to renewable energy, electrifying transport and reducing deforestation. These efforts to reduce emissions must play by far the biggest part in reaching global mitigation goals.

Carbon removal, however, will be key to counterbalancing “residual emissions” from sources that are challenging to abate, such as some industrial sub-sectors, as well as aviation and agriculture. And once we achieve net zero, carbon removal is the only way to reduce elevated levels of atmospheric CO2 from our past emissions and reverse some of the climate-induced damage we’re already seeing at more than 1 degree C (1.8 degrees F) of warming.

Despite scientific clarity around the respective roles of emissions reduction and carbon removal in delivering a net-zero, and ultimately a net-negative future, some oil and gas companies and countries have indicated that they view carbon removal as a way to delay the urgent need to reduce fossil fuel dependence. Without strong guardrails, CDR could impede emissions reductions, a concern known as moral hazard or mitigation deterrence that is particularly relevant as countries are developing long-term plans for how to reach net zero.

Countries setting net-zero and long-term climate targets can help address this risk by setting separate targets for emissions reduction and carbon removal in the long-term strategies (LTSs) and nationally determined contributions (NDCs) they submit to the United Nations Framework Convention on Climate Change (UNFCCC), as well as for their net economy-wide mitigation targets. Clarifying CDR’s role in this way can help provide transparency and allow for scrutiny around the relative levels of both carbon removal and emissions reduction.

What Are “Separate Targets” and How Do They Relate to Carbon Removal?

“Separate targets” refers to the idea that countries, or other actors, can set separate targets for gross greenhouse gas (GHG) emissions reductions and for carbon removal scale-up by a certain year. This contrasts with the current norm of setting a single net target that combines reductions and removals into an overall number without separating their relative contributions. Separate targets can be put forward under this economy-wide target as an extra layer of specificity to provide greater transparency around how climate targets will be met and how emissions reductions and removals will be balanced to meet that target. This can help ensure that carbon removal doesn’t detract from emission reductions and avoid an overreliance on CDR.

For this reason, setting separate targets has been a key recommendation in WRI analyses on international carbon removal governance and designing net-zero targets. NGOs, academics, companies and others have also recommended this approach to enable the responsible use of carbon removal. The IPCC’s sixth assessment report also pointed to separate targets, and sub-targets for different types of CDR, to avoid substituting carbon removals for emission reductions.

Because novel, technological carbon removal approaches typically provide greater certainty of long-duration removal than conventional, nature-based approaches, some NGOs have also proposed three targets: one for emissions reductions; one for carbon removal from conventional approaches like trees and soils; and one for carbon removal from more novel approaches, such as direct air capture or enhanced mineralization. It’s important to note  that many countries already distinguish between emissions and conventional removals from the land sector in their national inventory reporting, but they may not be setting a separate target for conventional removal.

This approach allows for transparency around the expected permanence, or duration of carbon sequestration, of each type of removal. It would also allow for “like for like” compensation, where removals that geologically sequester CO2, with a permanence level of thousands of years, compensate for fossil fuel emissions, which stay in the atmosphere for up to thousands of years. Simultaneously, emissions from biogenic carbon stocks like trees and soils would be compensated for by carbon removal approaches which result in storage of CO2 in biological pools.

Other proposed formulations include setting separate targets by sector, which can also provide transparency around relative levels of reduction and removal, and setting separate targets for reduction and removal in addition to complementary and more specific targets, such as reducing fossil fuel production.

Target Type(s)

Example

For illustrative purposes, we assume Country A’s 2015 emissions are 500 MtCO2

One economy-wide net targetCountry A will reduce net emissions by 95% from 2015 levels by 2050.Two separate targets

Within the economy-wide 95% net emissions reduction, Country A will:

• • reduce gross emissions by 90% from 2015 levels by 2050; and
• • remove 25 MtCO2/yr by 2050 from both conventional and novel CDR approaches (to account for the remaining 5% net emissions reduction).

Three separate targets

Within the economy-wide 95% net emissions reduction, Country A will:

• • reduce gross emissions by 90% from 2015 levels by 2050; and
• • enhance land-based carbon sinks to take up 20 MtCO2/yr by 2050; and
• • remove 5 MtCO2/yr from novel CDR by 2050.

Sectoral targets

Within the economy-wide 95% net emissions reduction, Country A will reduce emissions in the:

• • energy sector by 95% from 2015 levels by 2050.
• • waste sector by 75% from 2015 levels by 2050.
• • industrial sector by 55% from 2015 levels by 2050.
• • agriculture sector by 60% from 2015 levels by 2050.
• • land use, land-use change and forestry (LULUCF) by 80% from 2015 levels by 2050.

and remove:

• • 10 MtCO2/yr in the agriculture sector by 2050.
• • 30 MtCO2/yr in LULUCF sector by 2050.
• • 10 MtCO2/yr from novel CDR by 2050.

Virtually all countries already communicate their emission reduction targets to the international community through NDCs every five years and through LTSs, which outline climate plans by midcentury. These commitments are useful avenues for countries to propose separate targets, especially as they increasingly express interest in including novel carbon removal in their climate planning.

Mitigation Deterrence and the Risk of Overreliance on Carbon Removal

Mitigation deterrence is the concern that the use of carbon removal can shift focus away from the urgent need to reduce GHG emissions and transition away from fossil fuels. The potential for overreliance on CDR increases this concern. More specifically, relying too heavily on CDR is risky for several reasons.

Technology development uncertainty

Carbon removal technologies are still in development, and many have not been deployed at large scale. It may turn out that they can’t deliver the expected level of removal needed, so overreliance on CDR, in place of emissions reduction, would not only mean a failure to reach CDR goals, but would also jeopardize emissions reduction targets.

Non-equivalent impacts on climate and other systems

Emitting CO2 now and removing it later is not the same as not emitting CO2 to begin with. GHG emissions can cause irreversible damage to ecosystems and human health for the time they’re in the atmosphere, particularly as we cross large-scale climate tipping points. Additionally, the environmental and social impacts of novel carbon removal approaches at scale are not yet sufficiently understood, in comparison to the well-understood net benefits of reducing emissions. Reducing emissions now can also bring different types of co-benefits, depending on the sector, like reducing air pollution and increasing biodiversity. Carbon removal processes generally do not provide a similar level of co-benefits. Lastly, one would expect a large increase in CO2 emissions and an equivalent amount of CO2 removal to have the same magnitude (though opposite directionality) of climate impact. However, research shows this is not the case, and the lack of equivalence increases as the magnitude of positive or negative flux of CO2 increases. This asymmetry in response is mainly due to how the ocean and land sinks respond to changes in atmospheric CO2.

Resource constraints

Carbon removal approaches use varying levels of resources like renewable power, land area and water, and, in some cases, materials like biomass, chemicals, steel, cement and more. Bioenergy with carbon capture and storage, for instance, can use plants grown specifically for energy, which can compete with other land uses and negatively impact food security, biodiversity, and water availability. Meanwhile, direct air capture requires a significant amount of energy. Because of these resource constraints, in addition to the limited availability of well-characterized geologic carbon sequestration capacity and geographic applicability of certain approaches, carbon removal should be considered a limited resource. 

If carbon removal compensates for emissions that are not residual or could otherwise be reduced, we risk either missing our net-zero goals or needing a larger overall amount of CDR to meet net-zero goals, which would further exacerbate resource constraints. And if the limited amount of CDR available is used to compensate for so-called luxury emissions —those emissions that can otherwise be reduced — there is risk of effectively limiting the pool of carbon removal available to address residual emissions that are harder to abate. If the use of CDR is not restricted, it will be more difficult to reach net-negative emissions, as CDR is the only way to bring global temperatures back down after an overshoot past 1.5 or 2 degrees C (2.7 to 3.6 degrees F).

Separate Targets Can Address the Risk of Carbon Removal Overreliance

Setting separate targets, along with accountability mechanisms to track progress toward long-term and intermediate targets, can help address risks around carbon removal overreliance in the follwing ways.

Providing transparency

By setting separate targets, governments would communicate how much carbon removal they plan to rely on, creating transparency around the relative levels of CDR and emissions reduction. To substantiate and justify the level of planned reliance on carbon removal, governments would ideally define and quantify the levels of emissions that are very challenging to abate, due to technological or economic constraints, and would need to be counterbalanced by carbon removal. With one target, however, scenarios for reaching net-zero emissions that involve carbon removal would be treated equally regardless of whether that use is at a low or high level, despite their varying impacts on climate and other systems.

Clarifying the lack of equivalence between different types of CDR approaches

Carbon accounting today generally treats all tons equally, meaning that emissions from burning fossil fuels can be offset by carbon sequestration in biological carbon pools, such as forests. However, such an equivalence is flawed because conventional carbon removal approaches typically only sequester carbon for decades to centuries, while the CO2 emitted through the burning of fossil fuels remains in the atmosphere for thousands of years. Recognizing this disparity, there have been calls for separate targets among removals, where conventional carbon removal approaches may only compensate for land-based emissions, and novel, technological carbon removal approaches, that sequester carbon for much longer timescales (more than a thousand years), may only compensate for residual fossil emissions.

Creating policy clarity

By setting separate targets for reductions and removals, governments can send clear and actionable long-term policy signals to companies, investors, and other actors about the role of carbon removal to complement emission reductions. Such signals can provide clarity about a government’s anticipated scale-up of carbon removal and what will be required to support it (e.g., measuring, reporting, and verification systems, durable storage capacity, and renewable energy capacity to power removal facilities). Clear target setting that communicates about future capacity needs can inform near-term policy, lay the foundation for achieving long-term targets, and help ensure that CDR's likely limited capacity is allocated to the best uses that help meet those targets.

Where Separate Targets Have Been Discussed or Enacted

Separate targets for emission reductions and carbon removal have already been proposed, or put in place, at the regional, national and sub-national levels, as well as in the private sector.

ScopeJurisdictionTarget textRegionalEuropean UnionThe European Union’s proposed 2040 target aims to reduce emissions 90% relative to 1990 emissions. Documentation supporting the target states that the EU expects to rely on up to 400 MtCO2/yr of removal from LULUCF and “industrial removals” by 2040.NationalSwedenSweden’s long-term strategy is to reach net zero by 2045, reducing emissions by 85% relative to 1990 emissions. It plans to meet the remaining 15% through conventional CDR approaches, BECCS and emission reductions in other countries.Sub-nationalCaliforniaA 2022 law mandates California meet net-zero greenhouse gas emissions by 2045 and requires the state to reduce emissions 85% below 1990 levels by 2045. The remaining mitigation needed to achieve net zero is expected to be addressed with carbon removal.WashingtonThe state set a 95% greenhouse gas emission reduction goal by 2050, and also committed to reach net-zero that year. The remaining mitigation needed is expected to be addressed with carbon removal.Private sectorScience Based Targets initiativeThe initiative, which validates corporate climate commitments, released its Corporate Net-Zero Standard in 2021 and is in the process of updating it. The current version states that companies setting targets aligned with its standards need to reduce emissions by 90–95% and neutralize the remaining emissions that cannot be eliminated using permanent carbon removal. 

These examples – and others which are continuing to emerge – demonstrate the diversity of strategies that countries, sub-national actors and companies are using to clarify their intended future reductions and removals.

Challenges of Setting and Implementing Separate Targets

While setting separate targets would reduce mitigation deterrence, clarify policy needs and illuminate the lack of equivalence both between removals and emission reductions and among different types of carbon removal, it also presents some challenges.

Defining residual emissions

To set a separate target for CDR (or one for conventional and one for novel removals), governments will need some way to determine what that target level is. One option is to estimate the expected level of residual emissions at net zero, or in a certain year, and set a CDR target equivalent to that. Some countries are already doing this by including estimations of residual emissions in their long-term strategies, while other countries may use different methods.

While tying a target for CDR to an expected level of residual emissions may substantiate a certain level of CDR, it can be challenging because there is no consistent definition for residual emissions. It is a subjective decision each country will make depending on geography, development status, politics and other factors. This makes it difficult to assess which of the residual emissions identified are hard to abate and which are inconvenient for countries or other actors to reduce. What we consider to be residual emissions will also likely decrease over time, as we develop and improve emission reduction technologies, but this can be hard to anticipate in long-term climate planning.

Of the 72 countries that have submitted long-term strategies, 26 have included estimates of residual emissions. While most industrialized countries that include these estimations project residual emissions of around 5% to 15% in 2050, countries like Canada and Australia included a much larger range of future scenarios, from 17% to 44% for Canada and 36% to 52% for Australia. Such high levels of residual emissions indicate a planned overreliance on carbon removal, representing a real risk of mitigation deterrence.

Countries could approach target setting in a different way by quantifying the level of CDR they could feasibly deploy over a certain period and set a CDR target to match that. Though, given CDR’s role as a complement to emissions reductions, it would ideally not be scaled up as much as is feasible, but as much as is truly needed.

Setting up infrastructure to support separate targets

Creating separate targets for emissions reductions and carbon removal under an economy-wide target would require separate incentives, tracking and monitoring regimes, and data reporting. Currently, the vast majority of carbon credits come from emissions reduction or avoidance, but carbon removal credits are beginning to be bought and sold as well. International cooperation via buying and selling of carbon (and carbon removal) credits is allowed under Article 6 of the Paris Agreement. Countries would need to track trading of credits against their economy-wide target, but also track progress toward removal targets for additional clarity. The IPCC provides inventory accounting guidance for emissions and land-based removals, and is developing guidance for novel CDR in the coming years.

It will also be critical to set interim targets for both emissions reduction and carbon removal to provide accountability around progress toward meeting the longer-term separate targets.

What’s Next for Separate Targets?

With the next round of NDCs due to be submitted by February 2025, as well as a renewed call at COP28 for submission or revision of long-term strategies by November 2024, countries face a pivotal opportunity to increase the ambition and transparency of their near- and long-term climate plans. In developing these plans, countries should consider the extent to which they intend to rely on carbon removal and develop separate targets for carbon removal and emissions reductions to provide transparency and ensure that carbon removal is not delaying urgently needed ambition to reduce emissions.

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• Carbon Removal

Authors Katie Lebling Danielle Riedl Clea Schumer

What Are Nationally Determined Contributions (NDCs) and Why Are They Important? margaret.overh… Mon, 08/05/2024 - 13:52

The impacts of climate change have been on stark display this year, from severe flooding in Brazil and East Africa to droughts in Mexico and Europe and wildfires in Canada. Record-breaking heat has claimed lives around the world. These disasters are evidence that the world has not yet done nearly enough to halt the climate crisis.

But it's not too late. Scientists say it is still possible to avoid the most devastating impacts if we change course now. While countries are making headway in key areas — electric vehicle sales continue to climb, and renewables made up 86% of new energy additions in 2023 — keeping global warming to 1.5 degrees C (2.7 degrees F) will require more and faster action on every front. Global greenhouse gas (GHG) emissions must peak immediately and decline rapidly to reach net zero by mid-century.

A pivotal opportunity to achieve this goal is approaching in 2025. That's when the next round of national climate commitments — known as "nationally determined contributions" or NDCs — are due. These plans will detail countries' intended climate actions through 2035. Delivering more ambitious NDCs in this cycle is a critical step toward limiting global warming and securing a safer and more livable future for everyone.

So, what exactly are NDCs? And why are they so critical to halting climate change?

1) What Are Nationally Determined Contributions (NDCs)?

NDCs lay out how each country will contribute to the global temperature goals outlined under the Paris Agreement. They detail countries' plans to slash GHG emissions and help limit global warming to "well below" 2 degrees C (3.6 degrees F), with efforts to limit it to 1.5 degrees C (2.7 degrees F). Many NDCs also include measures to build resilience to climate impacts, such as drought and sea-level rise, and provide information on the finance needed to achieve their commitments.

Under the Paris Agreement, countries agreed to submit new NDCs every five years that reflect their "highest possible ambition." Countries are meant to strengthen their commitments in each round of NDCs based on the latest climate science.

Most countries submitted initial emissions targets prior to adopting the Paris Agreement in 2015. As of June 2024, most countries had put forth new or updated NDCs with 2030 targets — but only some of these include more ambitious emissions reductions. The next round of NDCs, with 2035 target dates, is due by early 2025.

2) Why Are NDCs Important for Fighting Climate Change?

Combating the climate crisis will require fundamental changes throughout society, from how we power homes and vehicles to how we produce food or design cities. At the same time, the world must scale up efforts to help communities — especially the most vulnerable — adapt to the changes they are already experiencing. While these actions may be driven by global goals like the Paris Agreement, they are usually planned and carried out at the local or national level.

That's where NDCs come in.

NDCs are the main vehicle for countries to collectively address climate change. They translate international climate agreements into concrete targets and measures that countries will work toward over the next 10 years. Under the Paris Agreement, countries are required to pursue emissions reductions with the aim of meeting their NDC targets and to report on their progress.

NDCs also establish political support for specific climate actions, sending an important signal about the country's commitment to a zero-carbon future. This can help drive the social and economic changes needed to meet national climate goals, including spurring investment from a wide variety of sources (public, private, national and international).

In addition, NDCs can contribute to achieving countries' longer-term climate and development priorities. For example, near-term actions to reduce emissions laid out in a country's NDC should align with any mid-century net-zero targets in its "long-term low-emissions development strategy" (LT-LEDS). NDCs can also support the implementation of countries' National Adaptation Plans, such as by outlining actions to make key sectors, like energy and agriculture, more resilient to climate shocks.

3) Are Current NDCs Enough to Tackle Climate Change?

Countries have made meaningful strides on climate action since 2015, but their current commitments still aren't nearly ambitious enough to match the scale of the climate crisis. Far from limiting global temperature rise to 1.5 degrees C (2.7 degrees F), the actions outlined in existing NDCs are on track for a catastrophic 2.5-2.9 degrees C (4.5-5.2 degrees F) of warming by 2100.

Keeping temperature rise in check will require immediate action to transform every economic sector, including rapidly transitioning away from fossil fuels. However, fewer than half of the current NDCs contain measures explicitly related to fossil fuel consumption, and only 11 include measures to phase out or end fossil fuel use. The number of NDCs with targets for high-emitting sectors like energy, transportation and agriculture has grown — but their ambition is a mixed bag. And some countries lack sector-specific targets altogether.

Most developing countries now include NDC measures related to adaptation, referencing how they will help vulnerable communities build resilience to climate change impacts. But they often lack adequate finance and tracking mechanisms to ensure these plans come to fruition. Developed nations generally don't include adaptation measures.

Finally, countries are not taking enough action to meet even their existing targets. Current actions will likely result in higher emissions in 2030 than the NDCs imply, revealing a significant implementation gap that countries must work to close.

4) What Should Countries Include in Their 2025 NDCs?

2025 offers a pivotal opportunity for countries to submit more ambitious NDCs that will limit warming to 1.5 degrees C and ensure a climate-resilient future for all people. But what could that look like on paper?

Experts at WRI have identified five urgent priorities for the next generation of NDCs:

• Ambitious 2030 and 2035 emissions-reduction targets in line with net-zero goals and 1.5 C. All countries should do more on this front, but high-emitting nations in particular need to demonstrate much stronger leadership on rapidly reducing emissions by 2035. This marks the halfway point between when countries submitted their first NDCs in 2020 and when many have committed to reach net-zero emissions, around 2050. That means it's a key time to align near- and mid-term actions with long-term objectives. NDCs should also include specific targets for short-lived but highly potent greenhouse gases such as methane.
• Stronger targets in key sectors like energy and food systems. All countries should set ambitious, detailed and time-bound targets for carbon-intensive sectors — from energy and transportation to food, agriculture and land. Such targets can help send a clearer signal to governments, companies and investors than economy-wide targets alone. 2025 NDCs should commit to rapidly shifting away from fossil fuels, scaling up renewable energy, adopting zero-emissions transport, reducing food waste, and investing in low-carbon, climate-resilient farming practices, among other measures.
• More robust measures to adapt to escalating climate impacts. Climate risks like storms, wildfires and extreme heat are escalating faster than expected. The next round of NDCs should enhance actions to make communities, economies and ecosystems more resilient to these impacts. They should also do more to address loss and damage from climate change that goes beyond what communities can realistically adapt to.
• Policies to catalyze investment and spur implementation. Setting goals is just the first step; NDCs must also spell out how countries will implement their national climate plans. This will take a whole-of-government approach involving a range of ministries and subnational governments. It will also require policies to stimulate investment in climate action and align finance from various sources and actors, including the private sector.
• A stronger focus on people and communities. The shift to a zero-carbon, climate-resilient economy can create millions of jobs, reduce pollution, improve human health and generate myriad other benefits for people everywhere. But countries must carefully design their transition plans to fairly distribute benefits and avoid negative outcomes, like job losses or displacement. The next round of NDCs needs to see all countries embrace these "just transition" principles in all climate commitments.

5) What Support Do Developing Countries Need to Implement Their NDCs?

Implementing NDCs requires significant financial investments. While climate finance can stem from a variety of sources, including domestic public funds and private investors, developing countries also require support from international sources like developments banks and climate funds.

It's well established that developing countries require far more funding than current levels to adopt green technologies and build resilience to the worsening climate crisis. Indeed, many developing country NDCs include "conditional" climate pledges, which they intend to achieve only with international support. Of the $4.5 trillion developing countries say they'll need, cumulatively, to implement their NDCs, $1.6 trillion represents conditional pledges. And this is only a partial estimate; not all developing countries currently include finance requirements in their NDCs. In comparison to this $1.6 trillion, developed countries are currently committed to mobilizing $100 billion per year in support through 2025.

Climate negotiators will meet at the UN climate summit in Baku this November (COP29) to come up with a new global climate finance goal and begin addressing this major disconnect. The new goal must take into account the needs and priorities of developing countries, as agreed at COP21 in 2015.

In addition to more finance, developed countries have committed to providing technical assistance and technology transfer to support developing countries' climate action.

Technical assistance involves connecting developing countries with experts and resources to help them develop and implement their NDCs. Training programs can share knowledge and build capacity to help developing countries adopt effective approaches to advance climate solutions.

Technology transfer involves developed countries sharing clean technologies and relevant know-how with developing nations to support their low-carbon transitions; for example, by helping them obtain licenses to use patented technologies.

In a neighborhood near Cape Town, South Africa, a man walks down a flooded street after days of heavy rainfall in June 2022. As climate-related disasters become more frequent and severe, countries need more finance to address both the causes and the impacts of climate change. Photo by brazzo/iStock 6) How Do NDCs Relate to the Broader UN Climate Negotiations?

Although NDCs are developed at the country level, they are closely linked to international climate talks. There are mechanisms within the UN climate negotiations that are meant to both inform countries' NDC development and transparently track their progress toward meeting the Paris Agreement's goals.

The Global Stocktake, for example, assesses the world's collective progress on climate change every five years and is specifically intended to guide countries' NDC development. The first Global Stocktake in 2023 called on countries to transition away from fossil fuels and scale up renewable energy, among other things. These goals must inform the NDCs that countries submit in early 2025.

Countries also submit biennial transparency reports that analyze how they are progressing on implementing their NDCs, including efforts to reduce emissions and ramp up adaptation action. These can also communicate the level of financial, technical or technological support countries need or are providing.

In addition, the UN Framework Convention on Climate Change (UNFCCC) routinely publishes NDC Synthesis Reports that combine information from all NDCs to assess progress and identify gaps in achieving the goals of the Paris Agreement.

7) Are NDCs Mandatory and Legally Binding?

Under the Paris Agreement, countries are obligated to have an NDC and to pursue domestic mitigation measures with the aim of fulfilling their commitments. While they are not legally bound to achieve their NDCs, countries have various responsibilities under the Agreement that are meant to lay the groundwork for meeting their targets.

For example, each country must submit a new or updated NDC every five years that is more ambitious than its last. The agreement clearly states that developed countries should take the lead by pursuing economy-wide emissions reductions, while developing countries should "continue enhancing" their mitigation efforts to the extent that they are able. Countries are also asked to promote transparency around implementation efforts, with developed countries required to track and report on emissions reductions.

In addition, many countries — such as the United Kingdom and Chile — have enshrined their climate commitments in nationally binding laws and regulations.

Learn more about the Paris Agreement's legal structure here.

8) Where Can I Learn More About Countries' Previous and Latest NDCs?

WRI has developed a variety of resources to learn more about countries' NDCs and how to implement them. For instance:

• Climate Watch's NDC Explorer offers a comprehensive and searchable database of each country's NDC. The tool includes over 150 structured indicators which allow users to explore every aspect of NDCs, including how they reference adaptation, finance, mitigation, loss and damage and different sectors.
• The Next Generation NDCs resource hub offers resources and webinars to help countries develop their next NDCs, including guidance on setting sector-specific targets and how NDCs can align with long-term climate strategies.
• WRI's Paying for Paris resource hub provides a collection of resources to help countries understand how to finance their NDCs.

Ahead of the COP29 climate summit, World Resources Institute will launch a "2025 NDC Tracker" that will allow users to track which countries have submitted new NDCs and how much they could collectively reduce emissions compared to the previous round of NDCs.

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• Next Generation NDCs
• National Climate Action

Authors Maggie Overholt Rhys Gerholdt Jamal Srouji Natalia Alayza

REMOVE Act of 2024 ciara.regan@wri.org Thu, 08/01/2024 - 16:10

Carbon dioxide removal (CDR) is a necessary complement to deep and rapid greenhouse gas emission reductions to avoid the worst impacts of climate change and realize the U.S. national target of net-zero greenhouse gas emissions by 2050. Carbon removal approaches are diverse — ranging from nature-based to novel, technological solutions — and vary in terms of cost, stage of development and possible scale of deployment. Investing in the development of a diverse portfolio of carbon removal approaches and technologies will help maximize the likelihood that CDR solutions can meet the climate challenge across the United States. Government-wide coordination is needed to lead a cross-cutting CDR research, demonstration and deployment effort grounded in carbon removal’s efficacy, rigorous monitoring and reporting and assessment of environmental and social impacts.

The Removing Emissions to Mend Our Vulnerable Earth Act of 2024, or the REMOVE Act, was reintroduced by Rep. Ann Kuster (D-N.H.), Rep. Paul Tonko (D-N.Y.), and Rep. Scott Peters (D-C.A.) in the House of Representatives on July 31. The REMOVE Act was originally introduced in 2022, and it matches a Senate version of the bill, introduced the previous year, called the CREATE Act.

The REMOVE Act of 2024 would enact a new Interagency Group on Large-Scale Carbon Management within the White House’s National Science and Technology Council, tasked with forming a strategic government-wide plan to advance carbon removal development. An executive committee would be established within the interagency group, with representatives from the White House Office of Science and Technology Policy, the Department of Energy, the Department of Agriculture, the Department of Defense, the National Oceanic and Atmospheric Administration and the Environmental Protection Agency.

Interagency group responsibilities would include, but would not be limited to:

• Creating a strategic plan for federal research, development and demonstration (RD&D) of technological CDR.
• Creating and overseeing working groups.
• Coordinating RD&D budgets.
• Identifying cost-effective CDR technologies that are appropriate for large-scale demonstration.
• Identifying protocols for monitoring, data collection and long-term storage for CDR technologies.
• Assessing the environmental and social impacts and co-benefits of CDR.

The working groups established under the new interagency group would carry out the research, development and demonstration of CDR technology — a collective effort that would be known as the Carbon Removal Initiative. The groups, which would be subject to review every three years, would focus on four types of CDR:

• Oceans
• Terrestrial
• Geological
• Technological

Why This Legislation Is Important

The REMOVE Act would activate a whole-of-government approach for developing and deploying carbon removal technologies at an unprecedented scale. This approach will not only invest in the formation of working groups and scaling up of research efforts, but it will also explicitly direct relevant federal agencies to incorporate CDR into their annual budgets. This cross-agency budgetary approach is significant because it shows the federal government's clear financial and personnel investment in the successful deployment of CDR. The committees and working groups proposed in the REMOVE Act would provide the necessary framework for research and development to accelerate climate mitigation efforts in communities across the United States.

Interagency coordination, spurred by the REMOVE Act, will expand research on carbon removal and help integrate and embed carbon removal priorities in federal agencies’ annual budgets. Photo by Louis Velazquez/Unsplash

The REMOVE Act stands apart from other legislative actions on carbon removal efforts because of its key focus on a whole-of-government, cross-agency approach to financially invest in responsible CDR deployment. The knowledge and resources expected to emerge could lay the groundwork for widespread CDR deployment in the coming decades as its need grows alongside increasing impacts of climate change.

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