Carbon Dioxide Removal Investment Act
Scientists from the Intergovernmental Panel on Climate Change — the world’s most authoritative body on climate science — agree that to reach national and global climate goals, carbon dioxide removal (CDR) must complement rapid and deep emissions reductions. CDR includes an array of approaches and technologies that pull carbon dioxide (CO2) directly from the air, ranging from familiar methods like planting trees, to developing and deploying new technologies like direct air capture (DAC). With the growing recognition of its critical role, carbon removal has seen significant steps forward in terms of federal policy support and funding for research, development and demonstration, as well as deployment. Even with this important progress, additional policies are needed to support development and deployment of a diverse suite of carbon removal approaches.
The only federal policy supporting carbon removal deployment today is the 45Q tax credit. It was originally enacted in 2008 to support geologic sequestration of CO2, then expanded in 2018 and again in 2022, as part of the Inflation Reduction Act (IRA). For CO2 captured with DAC, 45Q provides up to $180 per metric ton of CO2 (tCO2) for geologic sequestration and up to $130/tCO2 for utilization. For CO2 removed via bioenergy with carbon capture, it provides up to $85/tCO2 for geologic sequestration and up to $60/tCO2 for utilization.
Carbon removal methods in addition to DAC and bioenergy with carbon capture and storage (BECCS) are being developed — and in some cases deployed — including enhanced rock weathering, marine carbon dioxide removal and other approaches that use biomass, but they are not eligible for the 45Q tax credit. To better support a diverse range of CDR approaches and level the playing field, it is critical to enact policies that provide deployment support that is open to any kind of eligible removal technology.
The Carbon Dioxide Removal Investment Act — introduced by Senator Michael Bennet (D-Colo.) and Senator Lisa Murkowski (R-Alaska) — would take significant steps toward filling this gap.
The bill proposes a credit of $250/tCO2 for all approaches except for BECCS, which would receive $110/tCO2. Because BECCS produces energy, which provides revenue, it does not require as high a level of support. Importantly, this tax credit would be based on net carbon accounting. All emissions associated with removal and sequestration processes need to be subtracted from the gross amount of CO2 sequestered to yield the net amount sequestered — and only this net amount would receive credits. This is a key difference from the current 45Q tax credit, which does not require life-cycle accounting to claim the sequestration credit, and the reason this proposed credit level is higher than the 45Q credit. The credit would be known as 45BB, for its potential place in the tax code.
Taxpayers claiming this credit would not be able to also claim the 45Q tax credit (or the 48C advanced energy credit) in the same year. Carbon removal projects that also produce electricity, hydrogen or fuel will only be able to also claim such a credit (40B, 45, 45V, 45Y or 45Z) if that electricity, hydrogen or fuel is consumed by the qualifying carbon removal project.
To be eligible under the Carbon Removal Investment Act carbon removal approaches must:
- Provide net carbon removal based on project-level lifecycle accounting;
- Demonstrate a high likelihood of storing CO2 for at least 1,000 years; and
- Be able to quantify the carbon removed with a certainty threshold of +/- 20% with 95% confidence based on field trials
Qualifying carbon removal projects must use an eligible carbon removal approach and:
- Be based in the United States or waters regulated by the United States; and
- Be placed into service before January 1, 2035
For biomass-based approaches, the legislation includes restrictions on eligible biomass feedstocks to avoid negative impacts on ecosystems and agriculture. Eligible feedstocks include agricultural wastes and residues, invasive plant species, algae, food waste and other specific types of biomass waste. The legislation directs the National Academies of Sciences, Engineering, and Medicine, in collaboration with the Secretary of Energy and the Secretary of Agriculture, to conduct two studies to refine and/or add to the feedstock eligibility criteria within one year of enactment. These studies include assessment of the impacts of additional sources of biomass such as forest residues, and additional analysis of the necessary level of agricultural residue retention to maintain soil carbon stocks.
For marine CDR approaches, the legislation directs the Administrator of the National Oceanic and Atmospheric Administration, the Administrator of the Environmental Protection Agency (EPA) and the Director of the Bureau of Ocean Energy Management to, within one year of enactment, develop environmental safety standards that apply to all eligible approaches and to certify which approaches meet these environmental safety standards. The standards are then reviewed every three years and the certification of approaches are reviewed every two years.
Upon the legislation’s enactment, the Secretary of the Treasury, in consultation with the Secretary of Energy, must establish a selection process within one year to determine qualifying CDR approaches. They would be required to publish an initial list of eligible approaches within 18 months of enactment and update it every year thereafter. The legislation also directs the Secretary of Energy and EPA Administrator, within one year of enactment, to establish a process to determine and report net removals based on project-level greenhouse gas accounting. Measurement of removal must include quantification of uncertainty and be verified by independent third-party verifiers.
Lastly, no later than three years after the bill is enacted, and every three years after that, the Secretary of the Treasury, the Secretary of Energy and the EPA Administrator must conduct a panel review with experts from government, academia, civil society and the private sector to recommend improvements to the selection process and lifecycle greenhouse gas accounting requirements.
Why This Legislation Is ImportantThe Carbon Removal Investment Act has the potential to make a big impact for a range of reasons. It is not only open to any eligible CDR approach, but it is also designed to accommodate new CDR approaches that may be developed in the future. Additionally, it would create critical safeguards for biomass and marine CDR approaches and address the need for lifecycle accounting.
Enhancing the 45Q tax credit as part of the IRA provided support for both DACS and BECCS, but its eligibility criteria exclude other types of CDR approaches. For example, 45Q requires precise measurement of CO2 from where it is captured to where it is stored or utilized. This new legislation instead proposes technology- or method-neutral criteria to determine eligibility. And, for biomass and marine CDR pathways that present concerns about environmental or other impacts, it lays out additional criteria, deferring to agencies with expertise.
The requirement for lifecycle carbon accounting and crediting only for net tons removed is also a critical shift. Net accounting is important because it credits the amount of CO2 removal that the atmosphere feels; offsetting emissions associated with the CDR process are subtracted from the total gross removal to only credit the true climate impact of the project.
Carbon removal is needed to meet national and global climate goals, and supporting a diversity of eligible CDR approaches through technology-neutral deployment will be a crucial part of that effort. Carbon removal projects that are carried out responsibly can also provide meaningful local benefits, including job creation, investment and other project-specific benefits.
biomass-carbon-dioxide-removal.jpg Climate carbon removal agriculture Climate carbon removal legislation & policy Type Project Update Exclude From Blog Feed? 0 Projects Authors Katie Lebling Jennifer Rennicks Haley Leslie-BoleSTATEMENT: US Bipartisan Carbon Dioxide Removal Investment Act Levels the Playing Field for Carbon Removal Scale-Up
Washington, DC (November 21, 2024) — Today in the U.S. Senate, Senators Michael Bennet (D-CO) and Lisa Murkowski (R-AK) introduced the bipartisan “Carbon Dioxide Removal Investment Act.” The bill would provide a technology-neutral tax credit to support deployment of eligible carbon dioxide removal approaches. It would be open to any approach that meets eligibility criteria, including safeguards for biomass and marine carbon removal approaches. Tax credits would be provided based on lifecycle carbon accounting to only credit net tons removed.
Following is a statement by Christina DeConcini, Director of Government Affairs, World Resources Institute:
“The Carbon Dioxide Removal Investment Act is an important policy lever that will help the U.S. further develop and deploy a diverse suite of carbon removal technologies – a necessary component of meeting our national and global climate goals alongside deep and rapid emissions reductions.
“Through technology-neutral support that doesn’t pick winners, this bill creates a level playing field that will advance innovations best able to provide climate impact while creating jobs and maintaining U.S. leadership in the carbon removal sector.
“This bill demonstrates the established bipartisan support for carbon removal, and we encourage other members of Congress to join Senators Bennet and Murkowski in advancing this policy."
U.S. Climate United States carbon removal carbon removal legislation & policy Type Statement Exclude From Blog Feed? 0Bringing Electric Bus Lessons from India to Mexico
In 2024, WRI México organized a series of events to share India’s electric bus lessons with mobility and finance experts in Mexico. In April, Avinash Dubedi, the program head of integrated transport from WRI India, presented the Aggregated Demand (AD) Model for e-bus procurement.
India's AD Model is promising for government and public bus agencies facing financial challenges with the high upfront costs of e-buses. It combines demand from multiple cities to encourage electric bus manufacturing, which reduces costs and promotes innovation. This can help accelerate the transition towards sustainable public transportation in Mexico and worldwide.
More recently, in October, experts from WRI India, along with federal and local authorities and representatives from GIZ Mexico, Metrobús (Mexico City’s BRT system), NAFIN (a national development bank), private sector and WRI México, gathered in person to discuss the acquisition and mass manufacturing of electric buses and explore strategies to accelerate electromobility in public transportation in Mexico.
According to WRI’s estimations, Mexico needs to procure approximately 40,000 new buses to replace its outdated buses: The average age of buses in Mexico is between 18 and 20 years and approximately 90% of buses work under informal conditions. To achieve climate change goals, it is necessary to reduce emissions by electrifying the bus fleet. As of October 2004, of more than 100,000 public transport buses in Mexico, only 804 are electric, including trolleybuses. Eighty percent of the buses are in Mexico City and the rest are in four other states.. The demand aggregation and standardization approach that are part of the AD Model has proven successful in India and can help Mexico transform its fleet.
The April webinar and the October in-person workshop facilitated a valuable exchange of ideas and experiences between the two countries.
Key points and outcomes from the events include:
April Webinar Key Points:- India faced challenges in e-bus adoption due to technology risks and financing issues.
- The AD Model was developed to address these challenges, shifting risks to manufacturers and standardizing orders.
- The PM e-Bus Sewa Scheme, based on the AD Model, brought 10,000 electric buses to underserved cities.
- The model involves public-private partnerships and includes infrastructure development for e-bus depots.
- WRI India shared their experience in acquiring and manufacturing 9,500 electric buses, with a goal of 50,000 by 2027.
- Discussions focused on government programs, contracting models and financial mechanisms to support Mexico's electric mobility transition.
- The workshop highlighted the need for comprehensive planning, including technical, financial and institutional aspects, for successful electromobility projects.
- Challenges specific to Mexico were addressed, such as renewing approximately 40,000 buses and overcoming the current informal conditions in most Mexican transport systems.
- Developing a local electric bus manufacturing industry in Mexico was emphasized.
Both events underscored the potential for applying India's successful e-bus adoption strategies to Mexico while acknowledging the need for tailored solutions to address Mexico's unique challenges in public transportation electrification.
The events identified that every stakeholder has a role in advancing e-bus adoption in Mexico:
Federal governmentThe Mexican federal government needs to establish a clear and ambitious national goal for the electrification of public transport, create a guarantee fund to mitigate financial risks in electromobility projects, establish a certification and approval process for electric buses at the national level, implement incentives for transport operators to transition to electric fleets, and develop a standardized technical annex for electric buses at the national level.
State and municipal governmentsOn a subnational level, state and municipal governments should update demand studies and public transport routes, considering the different types of users. They should also plan the strategic location of depots and charging stations for electric fleets and professionalize and formalize public transport operators.
Automotive industryThe workshop concludes that Mexico’s automotive industry needs to develop electric bus models adapted to the Mexican market's needs and engage in continuous dialogue to align the supply and demand for electric buses. One of the reasons for India’s success is that all of India’s vehicle suppliers are Indian, which has allowed for rapid sector development in a short period.
Non-government organizations (including WRI México)Leveraging the expertise and experience of WRI’s different offices throughout the world, we can share, support and adapt tools, such as the Total Cost of Ownership EValuator, for the electrification of public transport in Mexico.
The successful adoption of electric buses in Mexico hinges on a collaborative effort among all stakeholders. The federal government must set ambitious electrification goals and create a supportive financial framework, while state and municipal governments should focus on planning and optimizing public transport routes and infrastructure. The automotive industry has a crucial role in developing tailored electric bus models and fostering ongoing dialogue to meet market demands. Additionally, non-government organizations, such as WRI México, can provide valuable tools and expertise to guide this transition. The UPS Foundation supported this series of events that mapped out the roles of each stakeholder. By working together and leveraging their respective strengths, these organizations can pave the way for a sustainable and efficient public transport system in Mexico.
This project is part of the TUMI E-Bus Mission, which collaborates with cities globally, including in India and Mexico, to support the development of electric bus fleets
india-electric-bus.jpg Cities India Mexico electric mobility Urban Mobility transportation Urban Efficiency & Climate public transit Type Project Update Exclude From Blog Feed? 0 ProjectsSTATEMENT: Country Coalition Commits to Steep Emission Cuts to Align with Net Zero Goals
BAKU (November 21, 2024) - Today, at the COP29 climate summit, a group of developed and developing nations – including Canada, Chile, the European Union, Georgia, Mexico, Norway and Switzerland – committed to submit nationally determined contributions (NDCs) that are consistent with IPCC trajectories in line with efforts to limit global warming to 1.5 C, include economy-wide emission reduction targets that cover all greenhouse gases and sustain steep emission cuts that fully align with their own goals to reach net-zero emissions.
Their joint release recognizes the critical role of major emitters to limiting global warming and encourages countries to set and/or accelerate their net-zero greenhouse gas emissions goals. The release also acknowledges the United Kingdom, Brazil, and the United Arab Emirates’ 2035 emission reduction targets.
These countries collectively represent roughly 30% of global GDP and nearly 15% of global GHG emissions.
Following is a statement from Melanie Robinson, Global Climate, Economics and Finance Director at World Resources Institute:
“This announcement by a diverse coalition of countries is a powerful display of leadership in the final days of the UN climate talks. Any serious chance of meeting global climate goals requires all major emitters to make deep and sustained emission cuts that offer a credible path to reach their net-zero promises.
“The United Kingdom and Brazil announced targets that, if fully achieved, would put them on track for net-zero. Now, it is imperative that all major emitters follow their lead with bold, actionable commitments of their own. And crucially, countries must embed climate action at the core of their economic and sectoral strategies, backed by transformative policies and catalytic investments.
“This new pledge offers a benchmark for determining whether major emitters are genuinely living up to their climate promises or falling behind. It marks a major step forward in translating what the ambitious outcome of the Global Stocktake means for individual countries.
“We encourage all nations to explore whether they can fast-track their net zero targets to boost our odds of avoiding far worse climate impacts.”
International Climate Action COP29 NDC Type Statement Exclude From Blog Feed? 0WRI and Partners Launch Zero Emissions and Resilient Buildings (ZERB) Accelerator at COP29
At the 2024 UN Climate Conference in Baku, Azerbaijan, the Subnational Climate Action Leaders' Exchange (SCALE) partnership launched the Zero Emissions and Resilient Buildings (ZERB) Accelerator. The ZERB Accelerator will rapidly reduce operational and embodied greenhouse gas emissions and strengthen climate resilience in the buildings sector through enhanced multilevel collaboration with subnational governments around the world. The announcement was made at SCALE's COP29 Action Dialogue, where subnational leaders explored opportunities for strengthening climate action across key sectors.
The buildings sector is a major contributor to the climate crisis, with building operations and construction accounting for over one-third of global carbon emissions. But slashing emissions isn't the only priority. Buildings are vulnerable to numerous climate risks — from flooding and rising seas to heat stress, heatwaves, severe storms and fires — meaning there's also an urgent need to enhance their resilience.
The ZERB Accelerator will bring together a global cohort of cities, states and regions committed to ambitious goals for mitigation and resilience in the buildings sector. SCALE accelerates action toward these goals through its signature multilevel governance approach: strengthening cooperation vertically between national and subnational governments and building horizontal, cross-sector connectivity with a wide range of key stakeholders, such as civil society, multilateral institutions, and research and academic organizations. This fosters political will, informs and empowers key stakeholders, and identifies priorities for additional action and resource mobilization. The ZERB Accelerator builds on the success of the Lowering Organic Waste Methane (LOW-Methane) initiative, launched by SCALE in 2023.
The first subnational jurisdictions to join the ZERB Accelerator include the states of Maryland and Washington in the U.S. and the city of Bogotá, Colombia.
The initiative will coordinate and align with efforts under the Buildings Breakthrough (a global initiative to decarbonize the building sector and make clean technologies accessible and affordable by 2030) as well as the UNEP-hosted Global Alliance for Buildings and Construction (GlobalABC) and its Subnational Stakeholders Action Group.
In addition to strengthening coordination between participating subnational jurisdictions and their national governments, the ZERB Accelerator will mobilize a broad coalition of organizations to provide implementation support. This will cover policy development and technical assistance; finance; data; and monitoring, review and verification.
The first organizations to announce that they will provide support as part of this coalition include Bloomberg Philanthropies; the Building to COP Coalition; C40 Cities (including the C40 Cities Finance Facility); the Global Alliance for Buildings and Construction (GlobalABC); the Global Covenant of Mayors for Climate and Energy (GCoM); the U.S. Department of Energy's Lawrence Berkeley National Laboratory (LBNL), National Renewable Energy Laboratory (NREL) and Pacific Northwest National Laboratory (PNNL); the Under2 Coalition; the U.S. State Department; the World Green Building Council (WorldGBGC); and WRI.
WRI will lead coordination of the ZERB Accelerator, working in close partnership with other SCALE implementing partners: C40 Cities, Climate Group (Under2 Coalition), Pacific Northwest National Laboratory, and the University of Maryland Center for Global Sustainability. SCALE is funded by the U.S. Department of State, the U.S. Department of Energy and Bloomberg Philanthropies.
bogota-colombia.jpg Buildings Buildings Climate Resilience GHG emissions Urban Efficiency & Climate Cities COP29 Type Project Update Exclude From Blog Feed? 0 ProjectsHow Ride- and Bike-Share Programs Can Play an Important Role in Latin America
Moving around cities in a variety of ways is getting easier and more convenient: whether it’s improved public transportation systems, wider sidewalks or more dedicated bike lanes. With the rise of smartphone technology and GPS, shared mobility services — like ride-hail and bike-share programs — are growing rapidly and playing an increasingly important role in the transport landscape.
These services aren’t just helping people reach their destinations but can also be leveraged to help people shift to sustainable and safe transportation choices. Emissions from transportation, especially in cities, account for 22% of global fossil-fuel emissions, with private passenger vehicles making up nearly half of these emissions.
However, a more significant shift in urban mobility will be needed to combat the worsening impacts of climate change. To meet critical global climate targets, changes beyond electrification are needed. Cities in low- and middle-income countries need to abate further growth in private vehicle ownership, while cities in high-income countries must focus on reducing existing private vehicle usage. Across all regions, promoting walking, cycling, public transport and the adoption of electric vehicles is essential.
What are Shared Mobility Services?Shared Mobility Services
Ride-hail: A service where a rider “hails” or hires a personal driver similar to a taxi, to take them exactly where they need to go. The vehicle is not shared with any other party, nor does it make several stops along a route (e.g., Uber, Bolt). Ride-hail improves on taxis by expanding coverage, enhancing systems for personal safety and simplifying payment.
Ride-share: A service where passengers share a vehicle with others traveling in the same direction, typically coordinated via an app (e.g., BlaBlaCar, Uber pool).
Bike-share: A service that allows users to rent bicycles from designated stations or zones for short trips, often on a per-minute basis (e.g., CityCycle, Nextbike).
Car-share: A service where users rent vehicles for short-term use, typically by the hour, from a private owner or a fleet of shared cars (e.g., Zipcar, Turo).
Shared mobility solutions like ride-hailing, car-sharing and bike-sharing may play an important role, especially as a last-mile extension or an occasional alternative to mass transit. For example, bike-sharing provides a quick, eco-friendly option for short trips, while car-sharing offers the convenience of a private car without the sunk ownership costs. These flexible alternatives are already transforming urban transport by bringing on a wider variety of transportation options for people to use.
To understand the current landscape of shared services and find ways to increase their usage in cities around the world, WRI conducted research in three cities in Latin America, which have become global leaders in innovative transportation strategies. By gathering insights from Bogotá, Colombia; Mexico City and Curitiba, Brazil, we discovered challenges and opportunities to build inclusive urban mobility systems.
Latin American Cities Leading the Way in Sustainable TransportationCities like Curitiba, Bogotá and Mexico City have become pioneers in the sustainable transportation movement, showing that it is possible to create livability without massive budgets. Curitiba introduced the modern bus rapid transit (BRT) system, transforming public transport and urban space. Bogotá advanced the BRT system into a comprehensive network and significantly increased cycling infrastructure, while Mexico City developed an integrated network across several jurisdictions combining metro, BRT, bicycle sharing, and pedestrian-friendly streets. Private cars still only account for less than 25% of trips in each of these cities.
Despite these accolades, ride-hailing apps disrupted existing regulations in Bogotá, Mexico City and Curitiba when they arrived within the past decade, bringing unvetted drivers, tensions with traditional taxis, challenges in insurance and law enforcement, and fluctuating price models that differed from previously regulated fares. While these services grew in popularity, each city responded differently. Brazil legalized ride-hailing in 2018, allowing for Curitiba to enforce local regulations on driver and vehicle licensing requirements, and to make progress on Mobility-as-a-Service pilots. Bogotá still lacks clear regulations for ride-hailing leading to a lack of full formalization. Mexico City faces challenges due to its size and jurisdictional issues, but has recently imposed an annual permit fee and mandatory contributions of 1.5% of each ride to fund transportation infrastructure.
In Curitiba, Brazil, 45% of people use its BRT system. Shared mobility services can help these riders reach their final destinations. Photo by Marcio Silva/iStock. The Goals of Shared MobilityShared mobility solutions can be leveraged to significantly enhance existing public transit networks by adding more ways for people to reach their destinations and not become dependent on any single mode. These services can bridge critical gaps by serving areas without subway or bus stops. They are also becoming particularly impactful for first- and last-mile connectivity, for people with disabilities or those carrying large equipment or packages. The services also offer a safer option for those who don’t want to walk home late at night. By reducing dependency on personal cars to accomplish those tasks, shared mobility services can allow households to put off acquiring a first or second car, which translates to greater use of other public transportation options for regular trips.
Yet there are challenges to the sustainable use of shared mobility services. On a trip-for-trip basis, shared modes typically produce more carbon emissions than their personal vehicle counterparts. For example, time spent driving in between passengers adds passenger-less carbon emissions and congestion caused by ride-hail services. Similarly, bike-share services produce more carbon emissions than personal bikes as they rely on cargo vans and trucks to help daily with redistribution. However, people who live in areas where bike share is available are more likely to cycle, compared to people who have privately owned bicycles but have no access to bike share programs. When people have the choice to leverage these shared services, it adds more reliability and accessibility to the transport ecosystem in ways that make it easier to choose lower-carbon options more often leading to a lower emissions profile overall.
Challenges and Opportunities for Shared Mobility in Latin AmericaWhile Curitiba, Bogotá and Mexico City have a reputation of taking innovative initiatives to improve their livability, approaches to shared mobility services are mixed. Bogotá has a successful bike-sharing system of over 3,300 bikes, a popular Ciclovía program (80 miles of streets closed to cars every Sunday for the past 50 years) and initiatives to promote electric bikes.
However, the integration of ride-hailing services has been hindered by regulatory challenges, resulting in a legal gray area where these services operate without formalization. Curitiba has been supported by national legislation that has helped stabilize ride-hail services and has recently launched a docked bike-sharing system ("Bicicleta Paraná") with 500 bikes, half of which are electric. Mexico City has the largest bike-sharing program in Latin America ("Ecobici") with over 6,000 bikes and a competitive ride-hailing market with an estimated 200,000-plus drivers. However, challenges persist in each place with overcrowded transit and privately-operated minibuses (colectivos).
WRI spoke with experts from government, transportation agencies, ride-hailing companies, researchers and NGOs in a series of workshops to better understand how shared mobility can contribute to more sustainable, low-carbon, equitable and healthy urban transport systems. While our discussions focused locally on Bogotá, Mexico City and Curitiba, what we discovered can be relevant to other large cities in Latin America and elsewhere.
Bogotá, Mexico City and Curitiba share common challenges like improving connectivity and modernizing both formal and informal transit systems. While shared mobility is an accepted tool that has the potential to address many challenges, its success depends on a supportive policy environment, effective governance and active collaboration among transit agencies, private service providers, research organizations, financial institutions and commuters. Additionally, the socioeconomic context of Latin American cities, where income inequality is often high and access to technology can be uneven, presents unique challenges that must be addressed to ensure that shared mobility benefits all segments of the population.
In Bogotá, the city has an innovative Ciclovía program that closes 80 miles of streets every Sunday to traffic. While innovative programs that encourage sustainability like this are popular, shared mobility solutions have been more challenging to integrate. Photo by matthieu cattin / Alamy Stock Photo.Here are four key takeaways that can help cities in Latin America — and in other cities facing similar challenges — leverage shared mobility to make their transport systems more sustainable.
1) Establish Ongoing Cross-Sector CollaborationIntegrating shared mobility into the urban transportation ecosystem requires continuous dialogue and partnership among government agencies, civil society organizations, nongovernment organizations, shared mobility companies, academic experts and more. In Mexico City, for instance, there’s a need for more flexible pricing, payment and operational models to improve transport coverage in underserved areas.
Collaborative efforts can provide first- and last-mile links and help commuters reach jobs and opportunities, especially in regions outside of city centers. Moreover, leveraging technology and data to integrate various transport modes, such as public transit, walking, cycling and shared mobility, is essential for creating a seamless system.
Curitiba for instance is in the process of integrating diverse mobility options into a single platform, offering integrated payments and incentives for sustainable user behavior.
2) Develop and Implement an Electric Mobility StrategyElectric vehicles present a significant opportunity for reducing emissions in Latin American cities. However, current adoption rates of light-duty electric vehicles are low. Developing strategies to electrify ride-hailing and for-hire fleets will be important to accelerate their adoption.
Cities like Mexico City and Curitiba are already taking steps to electrify their taxi fleets, but there is also potential in electrifying two- and three-wheelers, such as motorcycle taxis, which are common in many Latin American cities.
Such initiatives can be more affordable and accessible while contributing significantly to decarbonization. To support these efforts, cities need to collaborate with the private sector and other stakeholders to establish phase-out targets for traditional gas and diesel vehicles, provide incentives and develop the necessary charging infrastructure. Effective policies, such as "right to charge" regulations, can ensure that everyone has access to charging facilities within a reasonable distance of their residence.
3) Leverage Data for Sustainable Mobility SolutionsData is a crucial component for enhancing the effectiveness of shared mobility services and achieving sustainable transportation goals. Our discussions revealed the need for cities and shared mobility providers to engage in data-driven policymaking. By collaborating on the collection and use of data, cities can better understand mobility patterns, identify gaps in service and optimize the efficiency of transportation networks.
For instance, data on emissions, multimodal connectivity and congestion can inform decisions on infrastructure investment and service improvements. Projects like Curitiba's Hipervisor Urbano, which aims to provide an integrated view of urban planning data, demonstrate the potential of data-driven approaches to urban mobility planning. By establishing clear objectives for data usage, anonymizing information and ensuring data protection, cities can harness the power of data to create more efficient, sustainable and inclusive transport systems.
4) Formalize Ride-Hail Services Through RegulationCreating a clear and supportive regulatory framework is essential for the successful integration of ride-hail services into the broader urban mobility system. There’s a need for regulations that recognize and formalize the role of ride-hail services within the transportation ecosystem, ensuring that they contribute to sustainability and safety goals.
In Bogotá, where the regulatory environment for ride-hailing remains uncertain, clearer guidelines that promote innovation while safeguarding public interests are needed. A well-defined regulatory framework can help mitigate risks, such as uncapped liabilities, and promote transparency and accountability among service providers. By incorporating ride-hail services into urban and mobility planning, cities can create an integrated network of services that offer reliable, safe and sustainable transport options.
Turning the Corner Toward Shared MobilityCities stand at a crucial juncture in their transportation evolution. The workshops in Latin America showed that leveraging shared mobility services like ride-hail, ride-share and bike-share as part of a sustainable urban mobility strategy offers a new tool toward a promising path forward. By fostering collaboration, promoting electric mobility, leveraging data and establishing clear regulations within the shared mobility ecosystem, cities may be able to offer more kinds of transportation while slowing the growth of private car ownership, cutting emissions and improving accessibility for all residents. The discussions from Bogotá, Mexico City and Curitiba demonstrate that there is a need for thoughtful integration, where shared mobility is a vital component of sustainable, inclusive urban transport systems.
As these cities continue to develop and refine their mobility strategies, the key will be to maintain a focus on sustainability, equity and resilience. By prioritizing shared mobility solutions that are flexible, inclusive, and environmentally friendly, Latin American cities can pave the way for a future where urban transportation is not only efficient and convenient but also aligned with global climate and sustainability goals.
bike-share-mexico-city.jpg Cities Latin America Integrated Transport Urban Mobility transportation Cities Health & Road Safety Electric Mobility Featured Popular Type Commentary Exclude From Blog Feed? 0 Projects Authors Meghna Ray Adam Davidson Anna KustarSTATEMENT: Global Clean Power Alliance Launched at G20 Leaders Summit
At the G20 Summit in Rio de Janeiro, leaders of the United Kingdom and Brazil officially launched the Global Climate Power Alliance, an alliance of countries that will work together and share expertise with the goal of meeting the COP28 commitments to triple renewable energy and double energy efficiency. The effort will involve “missions” to address critical energy transition challenges. Brazil, Australia, Barbados, Canada, Chile, Colombia, France, Germany, Morocco, Norway, Tanzania, the African Union are the first countries to sign up to its first mission.
Following is a statement from Jennifer Layke, Global Energy Director, World Resources Institute:
“The Global Clean Power Alliance – and its finance mission – can help speed the world towards a future powered by efficient renewable energy. To be truly transformational, the Global Clean Power Alliance must prompt more new funding, improve and consolidate existing initiatives, and establish greater transparency for tracking renewable energy deployment. It’s critical that the alliance take a comprehensive approach by promoting not only renewables but also energy storage, efficient electrification and encouraging both on-grid and distributing solutions. Done well, this effort can play an important role in accelerating the transition away from fossil fuels while improving people’s lives, reducing energy poverty and creating green jobs.”
Energy G20 Type Statement Exclude From Blog Feed? 0Getting a New Climate Finance Deal this Week Hinges on 3 Elements
The big-ticket item at this year’s UN climate summit (COP29) is setting a new finance goal that replaces the collective $100 billion per year developed countries provide and mobilize for climate action in developing nations. But with only a few days left of the conference, it’s still very unclear what the goal will be or how it will compare to the previous target.
Let’s be clear: Negotiators must leave Baku with a strong agreement on international climate finance.
WRI’s experts are closely following the UN climate talks. Watch our Resource Hub for new articles, research, webinars and more.
This matters for trust between developed and developing countries. It matters for supporting the poorest and most vulnerable countries in adapting to climate change — and for all developing countries to get onto a low carbon growth pathway. It matters because of the strong feedback loops between finance and ambition: Greater emissions cuts and adaptation measures will require more finance, while more finance can encourage more ambitious climate action.
And importantly, it matters for all countries’ safety and prosperity — because if developing countries cannot rapidly shift away from fossil fuels and withstand climate disasters, all countries will face even worse impacts.
Negotiators are currently grappling with three issues at the core of the new climate finance agreement: quantity, contributors and quality. Here, we demystify these three essential elements:
How Much Finance?The Independent High Level Expert Group on Climate Finance puts developing countries’ need for external climate finance at around $1 trillion a year by 2030; $1.3 trillion by 2035. Within the trillion, they estimate around $500 billion needs to be public finance and around $500 billion private finance. A substantial amount of that private finance would need to be mobilized by public finance through instruments like guarantees or co-investments, which make investing in emerging markets and technologies less risky.
A big focus for negotiators at COP29 is the public slice of that pie, together with the private finance leveraged by public funds.
Explore WRI’s Climate Finance Calculator
Where should climate finance come from? WRI’s Climate Finance Calculator lets you consider various economic and emissions factors to see how responsibility for financial support could be allocated.
The current goal — $100 billion a year from 2020-2025 — is made up of public finance (described as “provided”) and private finance mobilized by public finance (described as “mobilized”) from developed countries. This includes bilateral flows from a developed country to a developing one, as well as finance flowing from the Multilateral Development Banks (MDBs) and the much smaller Multilateral Climate Funds (MCFs) to developing nations.
So what could the new goal amount look like?
To increase above the $116 billion of climate finance secured in 2022, the largest lever is multilateral finance. There is already good news here: The MDBs announced last week that they will provide $120 billion and mobilize $65 billion ($185 billion in total) for low- and middle-income countries by 2030, around 60% more than they provided in 2023. Negotiators at COP29 may agree to count all of this funding toward the new climate finance goal, or just the 70% representing funds from developed nations. Combined with a 50% increase in bilateral finance flows, this means international climate finance levels can easily reach $200 billion a year. If negotiators agree that all $185 billion of MDB finance should count toward the new goal and bilateral finance doubles, the level of finance could rise to $300 billion a year.
For countries to go above these levels, the best way would be further MDB reform and innovative financing, such as hybrid capital, which individual shareholders can choose to provide, increasing the lending capacity of MDBs. If this is combined with an assumption that shareholders will inject more capital into MDBs before 2035 — say $60 billion over several years — this could potentially lift total climate finance provided and mobilized by bilateral and multilateral sources to $340 - $450 billion a year, depending on whether or not the full share of the MDB finance is counted.
Significant amounts of new finance could also be raised through solidarity levies or taxes, such as those for the maritime and aviation industries or wealth taxes, which some countries have proposed. A joint statement from the recent G20 Leaders Summit in Brazil expressed support for such a wealth tax. These levies could offer anywhere from $20 billion to hundreds of billions a year.
Who Will Contribute?While developed countries recognize their responsibility to lead, they argue that other countries with the ability to provide climate finance — some of whom already invest in climate action in developing nations— should also transparently contribute to a new goal, due to their relative wealth and emissions profiles. Some of those contributions could be through multilateral financial institutions.
It is important to developing countries most affected by this that their contribution of climate finance would be considered specifically as South-South finance and would not change their development status.
Will the Finance Be High-Quality?In addition to how much climate finance is provided — and by whom — the quality of that finance is also an important feature of any new finance deal. The issues here are with access, concessionality, the amount provided for adaptation and debt.
For the poorest, most vulnerable countries, the proportion of finance provided as grants and highly concessional loans (with delayed repayments and low interest rates) is just as important as the overall amount. There can be a trade-off here: The current $100 billion goal was reported at “face value,” counting a $100 million loan for renewables in Mexico or Indonesia that needs to be repaid the same as a $100 million grant for adaptation in Malawi or Tuvalu. The grant is much more valuable to the recipient and costs donors far more. So while a larger goal may look better at face value, it may not be as good for meeting the needs of poorer and more vulnerable countries.
This is why bilateral grant funding and donor generosity in replenishing multilateral concessional funds like International Development Association (IDA) and African Development Fund (ADF) are so important. It’s also why some would prefer a “grant equivalent” goal, which would be smaller, but more transparent on the true value of the finance.
The poorest and most vulnerable countries also care about what proportion of the finance is for adaptation. The adaptation finance goal within the $100 billion was previously doubled from $20 billion to $40 billion a year. One option would be to double it again to $80 billion. While $80 billion may not seem like a “balanced” amount of a $300 billion overall goal, if it were mainly grant and highly concessional finance, the “grant equivalent” would be more balanced.
Least developed countries (LDCs) and small island developing states (SIDS), in particular, call for greater ease of access to international climate finance, with different concerns about the length, complexity and bureaucracy of the funding process, which is often made worse by the creation of yet more new funds. An agreement that improves this situation will be important.
Finally, many countries are looking for the new climate finance agreement to send a signal on debt. With nearly 40 countries now in or at the risk of debt distress, high repayments mean they have little domestic finance left over to invest in climate action, and no space to borrow more externally. Cross references could be made to the Expert Review on Debt, Nature and Climate and other processes examining how to take a more comprehensive approach to debt restructuring and relief.
Securing a New Climate Finance Agreement at COP29COP29 can mark a pivotal moment in global climate finance by acknowledging that total needs of developing countries are over $1 trillion and committing to at least triple the amount of what will be provided and mobilized by public finance. The financial commitment could be even higher if countries are willing to bank on future political agreements in other fora, such as through capital increases and solidarity levies.
If the new climate finance goal is tripled, it would still leave a gap between the amount provided and mobilized and what’s needed to meet the $1 trillion+ need. It also would say nothing about the purely private flows within the $1 trillion, over which the COP has no authority. The agreement could cross-reference processes outside the UNFCCC that need to tackle those wider financial system and domestic public policy reform issues and help close that gap. Agreements outside the COP on effective delivery of public, private, domestic and international finance will be equally critical to turning climate finance into impact on the ground.
But importantly, a strong new climate finance goal would provide much-needed momentum to accelerate meaningful climate action that benefits both people and planet.
cop29-baku.jpg Finance Finance climate finance Climate COP29 Type Commentary Exclude From Blog Feed? 0 Authors Melanie RobinsonOn Former Palm Oil Plantations, Small Farmers Are Bringing Brazil’s Forests Back to Life
Jessica Soraia's life hit a turning point four years ago. Living in Belém, Brazil, she was unemployed, her husband was battling depression and the future felt uncertain. So, Soraia made a bold decision: She and her family packed their bags and left the city for the Abril Vermelho Settlement, a former palm oil plantation in the Amazon rainforest.
Brazil's government-supported farm settlements offer land, housing and resources to families who can't afford to buy property, often on abandoned plantation land. "When we arrived here, the area was degraded, there was no cultivation of any sort," says Soraia. But what drew her to Abril Vermelho was the promise of sharing in something bigger: a chance not only to rebuild her life, but to join a larger community working to revive a slice of the Amazon.
What seemed like a gamble soon became a source of hope and stability. Alongside fellow farmers, Jessica now earns a living growing and selling mangoes, cassava, cashew, avocado and more. Through their work, the surrounding forest is coming back to life, with native plants and animals returning to the once-bare earth. "Here," she says, "you can work without harming the environment, without having to deforest, without having to destroy what already existed."
Jessica Soraia, one of the farmers at the Abril Vermelho settlement. Photos by Yantra ImagensJessica's journey is part of a larger movement across the Brazilian Amazon that aims to transform thousands of hectares of degraded farmland into fertile landscapes. The effort — supported by WRI Brasil, Imazon, Instituto Centro de Vida, and Movimento dos Trabalhadores Rurais Sem Terra (the Landless Workers Movement) — is showing how restoration and food production can work together.
As countries around the world grapple with rampant deforestation and competing demands for finite land, examples like this show a better path forward — one where healthy communities, sustainable economies and vibrant landscapes can all thrive.
Making a Living Restoring the LandWRI Brasil is working with five settlements like the one Soraia joined in the state of Pará, Brazil, and has seen the power of community-led restoration firsthand.
Abril Vermelho and João Batista are located just outside Belém in Northern Brazil.João Batista and Abril Vermelho, two settlements outside Pará's capital of Belém, are leading this effort. Covering 11,000 hectares in total, the two settlements were once used for industrial-scale palm oil and livestock production, which left the land bare and the soil depleted. Today, they are home to 700 farming families working to transform the land through more sustainable management.
Much of the farmers' success hinges on agroforestry, a farming technique that involves planting trees alongside crops. In the Amazon, agroforestry can mean growing staple crops with strong markets — like cassava, açaí or cocoa — alongside mainly native tree species, such as Brazil nut trees and cupuaçu (similar to cocoa), that help regenerate the land.
Plants and people alike benefit from this system. Trees can help restore soil health and improve water quality while also protecting crops from wind, heat, drought and other stressors. Farmers may see higher yields and more diverse harvests as a result, helping to boost their incomes. Together with other smallholder farmers in the region, families from Abril Vermelho and João Batista were able to open a new farm store in Belém to sell their produce to the broader community.
A farm store in Belém sells produce grown by farmers at the Abril Vermelho and João Batista settlements. Photo by Yantra ImagensAt the same time, trees in agroforestry systems offer vital ecosystem services that are becoming ever more important as the climate changes, such as storing carbon, maintaining water supplies and buffering communities against extreme heat. They also bring back habitat for species that may have been pushed out by ecosystem destruction.
Luiz Gonzaga is among the farmers in the João Batista settlement who have experienced the effects of these techniques first-hand. Walking through fields of green that were barren just a few years ago, Gonzaga explains: "We have the blue macaw, the curia, the trinca-ferro — birds that had disappeared. But after we reforested and the fruit started growing, the birds returned. The thrush, the pipira, the parrot and many others."
.video-caption { margin:0 12.5% auto; } @media only screen and (max-width: 750px) { .video-caption { margin:0 5% auto; } }Farm plots, farmers and surrounding forest on the settlement. Video by Yantra Imagens
Clearing the Way for Nature to ThriveWhile agroforestry is a powerful tool, planting seedlings can be an expensive and labor-intensive activity for small-scale farming families. But it is not the only option.
Some farmers in the settlements are also leveraging "assisted natural regeneration": a blend of active planting and passive restoration, where local people intervene to help trees and native vegetation naturally recover by eliminating threats to their growth. In other words, it involves clearing the way so that nature can regenerate on its own.
Often removing whatever is causing the degradation — in this case, monoculture farming and livestock pastures — can go a long way toward transforming the land. But farmers are proactively assisting natural recovery, too; for example, by removing invasive or exotic species that choke out native plants, or by building fences to prevent livestock from grazing in areas that are regrowing.
Research by WRI Brasil evaluated assisted natural regeneration projects in Brazil and around the world. We found that, not only is this an effective technique, but it can also be paired with agroforestry to make it easier for small landowners to implement restoration on a large scale.
Community members and WRI Brasil staff participate in a workshop on restoration opportunities at the Abril Vermelho settlement. Photo by Igor Lopes/WRI Brasil Putting People at the Heart of RestorationFor farmer Igor da Silva — one of the founders of João Batista, who moved there before the settlement was established — the devastated plantation land used to feel like a place of hopelessness. Water sources had dried up, crops withered, and fish, once a staple in his family's diet, became scarce. Even simple joys like swimming were no longer possible for his children.
But today, that picture has completely changed.
"In six years [after restoration], the water returned 100%," he says. Springs have replenished, crops are thriving, fish are abundant, and now the sounds of children swimming and laughing fill the air again. This transformation is all thanks to restoration.
Farmer Igor da Silva is one of the founders of the João Batista Settlement. Photo by Yantra ImagensFarmers themselves are the key to this success. Not only are they tending the land, but they were integral to the design of the Abril Vermelho and João Batista settlements. Officials from WRI Brasil, the Landless Workers Movement and other partner organizations worked closely with the community to structure and implement restoration plans, ensuring that the process met both environmental goals and the farmers' needs.
"I felt part of a process by doing these activities, by participating in the decision-making, in the joint deliberations," says farmer Marcio Jandir da Silva Lopes.
This sense of ownership is crucial. Family farms around the globe produce most of the world's food. Without their involvement, no matter how effective agroforestry techniques or natural regeneration methods are, large-scale restoration won't succeed. Indeed, locally led restoration projects are proven to be up to 20 times more likely than projects led by NGOs or national governments to create a lasting impact.
Communities living on the land must be directly involved from beginning to end, taking part in decision-making, organizing production, and building connections with others focused on restoring degraded areas.
.video-caption { margin:0 12.5% auto; } @media only screen and (max-width: 750px) { .video-caption { margin:0 5% auto; } }Trees and vegetation regrowing on former plantation and cattle land. Video by Yantra Imagens
Scaling Up Restoration in the Amazon and BeyondThese trailblazing communities show that with the right approach, it is possible to restore degraded land, protect biodiversity and create sustainable livelihoods for those who need it most. The next step is to replicate their learnings — both across the Amazon and around the globe.
Governments, organizations, businesses and individuals worldwide must come together to invest in locally led restoration projects. To drive long-term success, not just short-term results, they must put effective monitoring, management and partnerships in place and ensure communities are at the heart of every effort.
The land feeds the world; with the right approach, land can also heal it.
brazil-farm-settlement-aerial.png Forests Brazil Forests restoration agriculture Type Vignette Exclude From Blog Feed? 0 Projects Authors Bruno Calixto Luciana Alves Mariana Oliveira Ana Cecília Gonçalves Rosiane Silva Mercy OrengoRELEASE: WRI Launches New Guidance for National Governments to Enhance Climate Ambition Through Partnerships with Cities, States, Regions
BAKU, AZERBAIJAN (November 19, 2024) – Today, at COP29 in Baku, Azerbaijan, World Resources Institute (WRI) launched a new report offering practical guidance and recommendations for national governments to strengthen their climate commitments through strategic partnerships with cities, states and other subnational actors.
With the 2025 deadline for updated Nationally Determined Contributions (NDCs) approaching, the report shows how to integrate multilevel partnership into the NDC updating process, highlighting improved collaboration as key to achieving climate goals.
Created through WRI’s partnership with the Coalition for High-Ambition Multilevel Partnerships (CHAMP) for Climate Action, the guidance follows a three-step approach: reviewing existing multilevel partnerships to identify opportunities and gaps; planning meaningful consultation and engagement with subnational entities; and crafting ambitious NDCs that effectively incorporate subnational targets.
“Too often, national climate plans overlook the significant role of cities, which generate both 70% of global greenhouse emissions and 80% of global GDP,” said Ani Dasgupta, President and CEO of WRI. “At a moment when countries must strive to enhance their climate ambition and action, this report highlights examples and best practices for incorporating sub-national action into NDCs, a critical step toward accelerated progress.”
An estimated 90% of the greenhouse gas emissions reductions needed in cities can be achieved using widely available technologies and policies. However, most interventions require coordination across different levels of government to succeed, and such coordination remains rare. According to a UN-Habitat review, only 27% of submitted NDCs exhibit a strong urban focus. National governments must go beyond consultation, establishing effective pathways for collaboration to ensure shared responsibility for climate goals and their implementation.
The report includes recommendations on evaluating synergies and potential trade-offs in national and subnational goals. It also outlines how to develop a stakeholder engagement plan and integrate subnational data into national emissions inventories, among other ways to improve partnership.
“Together, we can forge the necessary connections to empower and advance the urban climate agenda through CHAMP and the NDC revision process,” said Gregor Robertson, former Mayor of Vancouver and Special Envoy for Cities for CHAMP. “With this guide, we set out new approaches for multilevel climate action across all sectors of society.”
COP29 has continued the momentum for city-level climate leadership initiated at COP28, which hosted the first Local Climate Action Summit and saw the launch of CHAMP, now endorsed by 74 countries. The Baku COP29 Presidency has pledged to prioritize subnational engagement, particularly through the COP29 Multisectoral Actions Pathways (MAP) Declaration for Resilient and Healthy Cities, set to be launched at the Urban Ministerial later this week.
“Enhanced NDCs are a critical opportunity to empower cities and subnational governments to deliver local climate action,” said Nigar Arpadarai, UN Climate Change High-Level Champion for COP29. “When national, subnational, and city governments work together, they can accelerate investment in green public infrastructure, adapt to climate risks, and steward a just transition away from fossil fuels. Critically, the COP29 Multisectoral Actions Pathways (MAP) for Resilient and Healthy Cities will continue to align national, regional and city-level climate actions.”
Colombia, a CHAMP member, has revamped its NDC process to demonstrate how engaging local actors can drive meaningful climate action, with cities central to mitigation and adaptation. The national government is holding open consultations with subnational governments across its five regions to co-develop climate strategies and ensure buy-in at all levels. This process involves urban leaders, civil society, regional leaders, the private sector and interest groups, tackling barriers that have previously hindered climate action.
“Subnational governments play a fundamental role in updating Colombia's NDC,” said Eliana Hernandez, Lead Coordinator for NDC Enhancement from Colombia’s Ministry of Environment and Sustainable Development. “They are leading and contributing to the implementation of transformative actions that allow us to confront climate change and contribute to the fulfillment of our commitments.”
CHAMP was launched at COP28 in 2023, led by the UAE COP28 Presidency with support from Bloomberg Philanthropies and partners such as WRI Ross Center for Sustainable Cities, C40, the Global Covenant of Mayors, ICLEI - Local Governments for Sustainability, the NDC Partnership, the University of Maryland, United Cities and Local Governments, Under2 Coalition and UN-Habitat. Now endorsed by 74 national governments, CHAMP members commit to developing climate targets and strategies with strong involvement from subnational actors, including consulting and collaborating with subnational governments as they prepare their next round of NDCs.
“This round of updates to Nationally Determined Contributions is critical to getting the world on track towards emissions reductions that prevent the worst effects of climate change,” said Michael Doust, Global Director, Urban Efficiency & Climate, WRI Ross Center for Sustainable Cities. “As we increasingly see the effects of warming all around us, multilevel partnerships can create more ambitious and effective climate action.”
About World Resources Institute (WRI)
WRI is a trusted partner for change. Using research-based approaches, we work globally and in focus countries to meet essential needs, protect and restore nature, stabilize the climate, and build resilient communities. Founded in 1982, WRI has over 2,000 staff worldwide, with country offices in Brazil, China, Colombia, India, Indonesia, Mexico, and the United States, and regional offices in Africa and Europe.
About WRI Ross Center for Sustainable Cities
WRI Ross Center for Sustainable Cities is World Resources Institute’s program dedicated to shaping a future where cities work better for everyone. Together with partners around the world, we help create resilient, inclusive, low-carbon places that are better for people and the planet. Our network of more than 500 experts working from Brazil, China, Colombia, Ethiopia, India, Indonesia, Kenya, the Netherlands, Mexico, Turkey and the United States combine research excellence with on-the-ground impact to make cities around the world better places to live. More information at wri.org/cities.
STATEMENT: More than 30 Countries Commit to Tackle Methane from Organic Waste
BAKU, AZERBAIJAN (November 19, 2024) – Today at COP29, over 30 countries committed to reduce methane from organic waste such as food. The Declaration on Reducing Methane from Organic Waste supports previous COP commitments, including the Lowering Organic Waste Methane (LOW-Methane) initiative to cut 1 million metric tons of annual waste sector emissions and the broader Global Methane Pledge to cut all global methane emissions at least 30% by 2030.
Food loss and waste accounts for 8-10% of total annual greenhouse gas emissions and methane emissions from food waste in landfills are a significant component, representing 3% of total greenhouse gas emissions.
Following is a statement from Liz Goodwin, Senior Fellow and Director for Food Loss and Waste, World Resources Institute:
“This declaration demonstrates countries are finally waking up to a must-tackle source of climate pollution: food waste in landfills. This is a solvable problem. We should not be sending food waste to landfills where we know it decomposes and produces climate-harming methane.
“Countries now need to turn this commitment into action by developing plans and policies that first reduce food loss and waste, and then invest in alternative processing and treatment for any food that is wasted. Countries should include diversion of food waste from landfill as an integral part of their climate strategy, including in their upcoming national climate commitments (NDCs).
“It is a travesty that globally we lose or waste around a third of all the food which we produce, while millions continue to go hungry. The benefits of ending food waste for people, for the climate and for nature are clear. Let this not be another unfulfilled pledge, but rather the moment where governments start making food loss and waste reduction the political priority that it deserves to be.”
STATEMENT: G20 Summit Reaffirms Support for Inclusive, Just Climate Action
BAKU (November 19, 2024) – Today, Leaders from the Group of 20 major economies issued a joint statement, as the COP29 negotiations enter their final stretch. G20 countries reaffirmed the goals of the Paris Agreement, reiterated the outcome from the Global Stocktake in Dubai and agreed to reform Multilateral Development Banks and scale up climate finance. G20 countries account for 85% of the world's economy and are the largest contributors to multilateral development banks helping to steer climate finance.
Following is a statement from Ani Dasgupta, President and CEO, World Resources Institute:
“The G20 Leaders’ Summit has reaffirmed that just, equitable climate action must remain at the center of the global agenda. Negotiators in Baku should build on the G20 Leaders’ Summit and rally behind a strong new climate finance goal.
“The shadow of Donald Trump’s recent election in the United States was expected to cast a shadow over the G20 Summit, yet leaders stood by their dedication to collaborate on some of the world's most pressing issues, including financial reform, poverty, hunger and clean energy.
“Despite sending positive signals on the energy transition and the need to scale up renewable energy and improve energy efficiency, it’s unfortunate that the G20 failed to reiterate the commitment to shift away from fossil fuels, which all countries agreed to at COP28 in Dubai.
“At its core, finance is a question of justice. Leaders rightly acknowledged that inequality within and among countries is at the root of most global challenges and must be addressed.
“The G20 Leaders recognized the need to rapidly scale up climate finance and reach a new goal in Baku, and they emphasized that international collaboration is key to doing so. Leaders called for multilateral development banks to be bigger, better and more effective. Another important step forward was support for a wealth tax, which could significantly scale up resources to help developing countries curb emissions and blunt the impacts of climate change.
“We are encouraged that the G20 endorsed country platforms, which aim to tackle the fragmented delivery of climate finance and better allocate resources to high-impact projects. Critically, these platforms could help countries attract more and better finance to implement their NDCs, due in early 2025, by connecting national priority projects and national and international, public and private financial flows.
“The G20’s renewed commitment to sustainably and equitably increasing agricultural productivity and reducing food loss and waste demonstrates that countries are prioritizing these issues as an integral part of climate action, given food systems’ vast interconnections with the climate.”
International Climate Action G20 COP29 Type Statement Exclude From Blog Feed? 0STATEMENT: Proposed Amendments to EU Deforestation Law Create Dangerous Loopholes and Uncertainty
BRUSSELS (November 18, 2024) — The European Parliament voted last week to delay, and proposed amendments to the EU Deforestation Regulation (EUDR) which had originally passed the legislative process in 2023. The proposed amendments need to be approved by all three EU institutions and will be considered by the EU Commission and EU Council this week.
Initially set for implementation on 30 December 2024, this critical regulation aims to curb the EU’s role in global commodity-driven deforestation. It prevents coffee, cocoa, soy, cattle, palm oil, rubber and wood, along with certain derivative products, that are linked to deforestation or forest degradation from entering, being traded in or exported from the European market.
Following is a statement by Stientje van Veldhoven, Vice-President and Regional Director for Europe of World Resources Institute:
“This decision is disappointing and undermines the regulation’s objective to curb global deforestation by creating the world’s first deforestation-free consumer market. The world is currently losing 10 football fields of tropical forests every minute, and we cannot wait to better protect our forests.
“By both delaying and defanging the EUDR, with this vote EU policymakers would reduce the effectiveness of the regulation based on proposals that have not been fully thought through and are not based on credible science.
“The proposed amendments present three major risks. First, the creation of a “no-risk” country category generates loopholes that undermine the regulation by exempting companies from key due diligence requirements. A second risk is using 1990 as the reference year, which may miss more recent deforestation risks and degradation trends. And third, the amendments’ unclear language creates uncertainty for companies, investors and smallholder farmers.
“The delay and proposed amendments damage the EU’s climate leadership credibility. To preserve the EUDR, the European Commission should formally oppose the amendments. Without unanimous approval by all EU member states, the amendments could then not pass. If needed, the Commission and EU Council could agree on a non-enforcement grace period of 12 months without reopening negotiations, as this would be the quickest path to prevent further chaos.”
Below is a more in-depth assessment from Stientje van Veldhoven on three main risks from the proposed amendments:
First, the most concerning change is the introduction of a new “no-risk” country category which creates loopholes that jeopardize the effectiveness of the entire regulation. Under the “no-risk” classification, companies sourcing products harvested in countries deemed to have stable or increasing forest area would be exempt from key due diligence obligations. This could make it easier for suppliers to bring deforestation-linked products into the EU market via “no-risk” countries, creating a backdoor for commodities produced in high-risk countries.
For example, an unscrupulous supplier from a “no-risk” country could exploit this rule by misrepresenting the origins of leather, coming from cattle from a high-risk country and linked to deforestation. Although the amendments still demand that companies verify their products are degradation-free and legally produced, they no longer have to provide any documentation and no geospatial data, making enforcement difficult.
The second risk lies in the amendments' reliance on 1990 as the reference year for forest area assessments. Assessing forest area change between 1990 and 2020 may not accurately reflect current or future deforestation risks. In fact, by comparing the difference in forest area between two time periods, deforestation can be missed completely if forest is replanted with young, less biodiverse trees or regrows elsewhere. For example, Vietnam, a primary supplier of coffee and wooden furniture to the EU, increased its forest extent by 56% between 1990 and 2020, according to national data reported to FAO. However, WRI’s Global Forest Watch estimates that over 1 million hectares of forest has been lost to commodity-driven deforestation between 2001 and 2023.
Furthermore, satellite data availability and quality have increased and improved over the past decade. Crucially, data derived from satellite observations in 1990 are not easily comparable to more recent observations meaning they could misrepresent the status of forest change.
Third, the amendment language requires clarification to prevent uncertainty for companies, investors and smallholder farmers. The revised provisions mandate that an information platform and the country risk benchmarking need to be in place six months before the regulation takes effect. However, the text fails to specify who will verify, and under what criteria, the readiness of related IT and other systems.
Additionally, the amendments do not clarify how the proposed “no-risk” assessment criteria align with the comprehensive country risk benchmarking methodology being developed by the European Commission. This lack of alignment creates more confusion and opens up pushback against the results of the country benchmarking. Some of the proposed amendments include contradictory language that will lead to uncertainty among operators about their responsibility to verify products from “no-risk” countries. Moreover, the creation of the “no-risk” country category raises questions about whether the revised regulation will comply with World Trade Organization non-discrimination rules, potentially setting the stage for trade disputes. This threatens the predictability of the EU’s regulatory landscape.
Forests Europe deforestation commodities Type Statement Exclude From Blog Feed? 0The State of Electric School Bus Adoption in the US
Editor’s Note: This article was updated with new findings as of October 2024 from WRI’s Electric School Bus Data Dashboard, which is updated monthly and contains the most recent data on electric school bus adoption. Previous versions of this article are available for download at the bottom of this page.
More than 21 million children ride the bus to school in the U.S., and over 90% of these school buses run on fossil fuels, primarily diesel, putting children’s health at risk every school day. Diesel exhaust is a known carcinogen, with proven links to serious physical health issues as well as cognitive development impacts. But with more electric school buses on the road, these risks can be greatly reduced.
Electric school buses have zero tailpipe emissions, preventing students’ exposure to harmful pollutants. Plus, electric school buses are cleaner for the environment, producing less than half the greenhouse gas emissions of diesel or propane-powered school buses, even after accounting for emissions from electricity generation.
In the U.S., there now are nearly 5,000 electric school buses serving approximately 254,000 students in 49 states, Washington, D.C., American Samoa, Puerto Rico and seven tribal schools. That means electric school buses are on roads across the country, responding to the call for a clean ride to school.
More than 90% of school buses today run on diesel, with dangerous fumes that have proven links to serious physical health issues and cognitive development impacts. Photo by Denisse Leon/Unsplash. US Electric School Buses by the NumbersAs of Oct. 1, 2024, there are a total of 12,241 electric school bus commitments. We define “commitment” to include electric buses across four stages: those that have been awarded funding for purchase, have a formal purchase agreement with a dealer or manufacturer, have been delivered to school districts or fleet operators, or are in operation.
Over two-thirds, or 67% percent, of all committed electric school buses in the U.S. were funded by the Environmental Protection Agency’s Clean School Bus Program, which has awarded nearly $3 billion to fund over 8,000 school bus replacements at more than 1,200 school districts.
Notably, 89% of total Clean School Bus Program funds and 84% of awarded electric school buses went to “priority” school districts, which include school districts with high poverty levels, rural school districts, Bureau of Indian Affairs-funded school districts, and school districts that receive basic support payments for children who reside on Indian land.
Thanks to this program, there are now electric school bus commitments in 49 states, Washington, D.C., American Samoa, Guam, Puerto Rico, the U.S. Virgin Islands and several tribal nations including the Lower Brule Sioux Tribe, Mississippi Band of Choctaw Indians, Morongo Band of Mission Indians, the Soboba Band of Luiseño Indians and the Umo N Ho N Nation. This unprecedented level of funding comes from the Bipartisan Infrastructure Law of 2021 and would not have been possible without the tireless advocacy work of groups across the country.
The total number of electric school buses is expected to continue to grow under a $1 billion fourth round of Clean School Bus Program funding announced in September 2024, as well as the EPA’s new Clean Heavy Duty Vehicles Grant Program, established under the Inflation Reduction Act of 2022 and designed to help transition heavy duty vehicles — including school buses — to zero-emission models. The EPA expects around 70% of the Clean Heavy Duty Vehicles Grant Program funding, or around $700 million, to support school bus replacement projects. Further, several states have passed laws and statutes to transition to zero-emission school buses, setting the stage for more widespread adoption.
WRI has been tracking electric school bus adoption across the U.S. since 2021 to compare data overtime and identify specific trends as more electric school buses make their way to the road.
Here are the key findings from our October 2024 data:
The US. Has Nearly 5,000 Electric School Buses on the RoadAs of October 2024, electric school buses are now committed in 1,531 U.S. school districts or by private fleet operators. That is a 500% increase in the number of districts since our first count in 2021, and a 1,000% increase in the number of committed electric school buses.
Among the 12,241 committed buses, 4,958 were already delivered or are operating. Another 5,906 buses have been awarded to school districts from federal and local government initiatives but have not yet been ordered or delivered.
Our data tracking also shows that school districts that receive electric school bus awards have significant follow-through. As of October 2024, there are nearly 1,400 electric buses currently on order from school districts nationwide. Since 2012, when the first electric school buses were committed, more than half (52%) of all electric school bus commitments have translated into bus orders.
Among Commitments in 49 States, Large Increases Are in New England and the MidwestWRI’s most recent data shows every U.S. state, except Wyoming, has electric school bus commitments, including Washington, D.C., American Samoa, Guam, Puerto Rico, the U.S. Virgin Islands, seven tribal schools and two private schools operated by a tribal nation.
The most recent data shows electric school bus commitments are becoming more evenly distributed across the country. When tracking first began, more than half of electric school bus commitments were in the West (based on U.S. Census regions). Now, the West represents 34% of committed electric school buses, only a little more than the South’s 30% share of commitments. The Northeast and the Midwest have 20% and 15% of committed electric school buses, respectively.
California continues to lead in electric school bus adoption, with over 3,110 committed electric buses across the state, of which nearly 45% are delivered or operating. This is more than four times as many buses as the next leading state, New York, with 764 commitments.
Massachusetts is now one of the top 10 states with the most committed electric school buses for the first time since tracking began.
The remaining top 10 states with the most committed electric school buses include Illinois (617), Pennsylvania (469), Florida (467), Maryland (439), Massachusetts (434), Texas (424), Virginia (385) and Georgia (341).
While California had the largest absolute number increase from our last update in December 2023, with 713 new bus commitments, states across New England and the Midwest saw large percentage increases in the number of committed buses.
The number of committed electric school buses in Indiana (46 to 104), North Dakota (8 to 18), Ohio (68 to 165) and Wisconsin (66 to 141) increased by more than 100%. In Nebraska, the number of electric school buses increased by over 200% (7 to 23) and in Minnesota by over 300% (25 to 101). The largest percentage increase of electric school buses was in New Hampshire with an increase of over 1,000% (7 to 117). The New England and Midwest regions of the U.S. now have 4,367 committed ESBs, more than the West’s 4,156 buses.
State legislatures are helping to accelerate the electric school bus transition. Since 2022, seven states have statutorily enacted zero-emission school bus transition requirements, including California, Connecticut, Delaware, Maine, Maryland, New York and Washington. Some 100,000 school buses (19% of the entire U.S. fleet) are covered by these measures and 6 million school bus riders (26% of all riders) would benefit directly.
Washington is the most recent state to enact its transition target, requiring that 100% of new school bus purchases be zero-emission once the total cost of ownership is on par with that of diesel buses. The state also directed that grant programs must prioritize environmental justice communities.
In addition, Colorado, Michigan and Washington D.C., have non-binding transition goals, aiming for 100% zero-emission buses on the road by 2035, 100% of school bus sales to be electric by 2030 and the replacement of 100% of school buses with electric models which began in 2021, respectively.
Over 100 Sources Have Funded Electric School Buses Across the USThe federal Clean School Bus Program far surpasses any other single funding source for electric school buses. As of October 2024, it is responsible for 67% (8,125) of all electric school bus commitments. Looking at it another way, out of the 7,283 electric school buses that are awarded or on order as of October 2024, it is funding more than 80%. And the program currently funded 2,200 buses that are already operating or have been delivered.
The next largest funding source is California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, which has funded 1,213 bus commitments. State efforts under the Volkswagen Clean Air Act Civil Settlement has also funded a significant amount of electric school buses, providing 706 commitments across 28 states. Unsurprisingly, California-specific funding sources comprise half of the 10 largest funding sources. The state’s robust incentive programs are partly why a quarter of all committed electric school buses in the U.S. can be found there.
Large Commitments for Electric School Buses Are IncreasingThe growing number of commitments for more buses suggests increasing trust in electric school bus technology and market conditions, as well as wider funding availability. Over 1,500 U.S. school districts or private fleet operators have committed to electric school buses. Seventy eight percent of them (1,197) have committed to more than one bus, and 52% (800) have electric school buses that are operating or have already been delivered.
Approximately 42% (638) of all school districts and fleet operators with electric school buses have committed to five or more buses, and 23% (353) have committed to 10 or more, compared to just 60 such school districts in 2023. One hundred and forty-seven districts have electric school bus commitments that amount to 50% or more of their current fleet size.
School districts, large and small, have already reached 100% school bus electrification. In April 2024, Steelton-Highspire School District became the first in Pennsylvania to have an all-electric school bus fleet with six buses. And in August, the Oakland Unified School District rolled out one of the largest all-electric school bus fleets in the nation with 74 electric buses.
Top 5 School Districts by Number of Electric School Buses Ordered, Delivered or Operating as of October 2024RankEntity NameStateNumber of Electric School Buses1Montgomery County Public SchoolsMD3262Los Angeles Unified School DistrictCA3213Miami-Dade County Public SchoolsFL1254Boston Public SchoolsMA1145Clayton County School DistrictGA100Is Electric School Bus Adoption Occurring Equitably?Students from low-income families are particularly exposed to the dangers of diesel exhaust pollution from school buses: 60% ride the bus to school, compared to 45% of students from families with higher incomes. In addition, Black students and children with disabilities rely on school buses more than their peers. Children of color are also more likely to suffer from asthma, due in part to historically racist lending, transit, housing and zoning policies that concentrated Black and Brown communities closer to highways and other sources of vehicle-based air pollution. Electrifying the entire fleet of school buses, and prioritizing these communities in the transition, can help address these concerns.
Overall, committed electric school buses are largely concentrated in historically underserved school districts. Since WRI tracking began in 2021, we have seen an increase in buses in low-income areas and areas with the highest levels of particulate matter (PM2.5) and ozone pollution. A majority of electric school buses continue to be in school districts with high populations of people of color.
Notably, the EPA’s Clean School Bus Program led to a more equitable distribution of electric school buses by prioritizing school districts based on whether they were “high need” (focusing on high-poverty districts and those located in the U.S. Virgin Islands, Guam, American Samoa or Northern Mariana Islands), rural, tribal or a combination of these criteria. The share of districts with at least one electric school bus in each type of locale (rural, town, suburban and urban) also aligns closely to the distribution of all school districts nationwide among these locales. Thirty- six percent of school districts with at least one committed electric school bus are in rural locales, 26% are in suburban, 22% are in urban and 15% are in town locales. This is a marked change from 2021 when only 17% of school districts in rural locales had electric school buses; a shift mostly due to the Clean School Bus Program’s prioritization of rural school districts.
Before the EPA's Clean School Bus Program awards in 2022, the largest percentage of electric school buses were in districts with the smallest shares of low-income households. By October 2024, the largest percentage of electric school buses are now in districts with the highest shares of low-income households (62%).
Electric school bus adoption also appears to be occurring equitably when looking at the distribution of buses among communities of color. Among committed electric school buses, 85% are in school districts with the highest percentages of people of color as defined by the EPA’s EJScreen data.
Of note, the percentage of electric school buses in districts with the highest shares of low-income households and people of color decreased from 66% to 62% and 89% to 85%, respectively.
WRI also evaluated data to see if electric school buses were equitably distributed across communities impacted the most by harmful pollutants. We compiled data on concentrations of PM2.5 and ozone in school districts because of their harmful health effects, their close linkage to diesel exhaust and the availability of data, as well as data on adult asthma rates since evidence suggests that children with asthma are especially susceptible to impacts from air pollutants (Childhood asthma rates at the census tract level were not available for most districts).
As of October 2024, 65% of committed electric school buses are in school districts with the highest concentrations of PM2.5. The trend continues with ozone pollution with 65% of committed electric school buses in school districts with the highest levels of ozone pollution. School districts with electric school buses are fairly evenly distributed among different levels of adult asthma rates. A little under half (49%) of committed electric school buses are in school districts with the highest adult asthma rates. As noted above, the use of adult asthma data may not provide a full picture of the impact of pollution levels on communities’ asthma incidence, especially given asthma most often starts during childhood and children are more susceptible to the adverse effects from poor air quality, more effort is needed to ensure that electric school buses are brought to these communities.
It’s important to note that the metrics presented here reflect only a few equity dimensions. WRI is also closely tracking other community characteristics including disability access and services, tribal equity and other underserved communities to ensure there is an equitable transition to electric school buses.
What’s Next to Scale Up Electric School Bus Adoption?With the third round of Clean School Bus Program awards announced in May 2024, more electric school buses are expected to be introduced across the U.S., through the next two years. The opening of the fourth round of applications, due on Jan. 9, 2025, will provide an additional $1 billion for electric school buses. But that’s not the only federal program helping to put more electric school buses on the road.
Last summer, the Internal Revenue Service issued proposed regulations which allows entities like school districts to claim electric school bus-relevant credits such as 45W (Qualified Commercial Clean Vehicles) and 30C (Alternative Fuel Vehicle Refueling Property Credit). These credits can save school bus operators tens and even hundreds of thousands of dollars on school bus electrification.
In March 2024, the EPA revised existing greenhouse gas emission standards for heavy duty vehicles, including school buses. These standards will avoid nearly one billion tons of greenhouse gas emissions by requiring emission control technologies for vehicle model years 2027 through 2032, accelerating the transition to clean buses that allow students and school bus drivers to breathe easier. WRI analysis of these new greenhouse gas emissions standards for heavy-duty vehicles projects that 62% of all school bus sales will be electric by 2032.
In August, it was announced that grant recipients of the Greenhouse Gas Reduction Fund can begin accessing available funds to mobilize financing for projects, signaling an unprecedented opportunity to bring equitable finance into electric school bus procurements.
State funding programs are also putting more buses on the road. The Michigan Clean Bus Energy Grant Program, which provides funds to school districts to replace aging diesel school buses, opened for its second round of applications in August. Illinois and Pennsylvania are also considering funding and fleet transition targets, such as the Advanced Clean Trucks rule, which would help promote the development and use of electric school buses.
The latest data shows that electric school buses continue to have nationwide momentum. As progress toward an all-electric school bus fleet advances, policymakers at the federal and state levels, including state utility regulators, will need to continue establishing supportive policies, such as fleet transition requirements and programs for charging infrastructure deployment and workforce development.
Federal and state governments can continue to address the upfront cost premium of electric school buses through funding opportunities and financing programs that help maximize the impact and reach of grants for greater scale and ambition. Across these efforts, policymakers should ensure benefits are equitably accessible to communities that would benefit most from school bus electrification through policy prioritization and technical assistance from government and utility programs.
Looking to follow the most up-to-date, interactive electric school bus data? Check out our Electric School Bus Data Dashboard, where you can easily explore trends and dive into the latest data.
View past editions of this article:
- July 2024 Edition
- September 2023 Edition
- April 2023 Edition
- February 2023 Edition
- September 2022 Edition
- June 2022 Edition
- February 2022 Edition
- August 2021 Edition
STATEMENT: United States Achieves Biden’s Climate Finance Goal
BAKU (November 17, 2024) - Ahead of the G20 Summit in Rio, the Biden administration confirmed that that U.S. international climate finance has reached over $11 billion a year by 2024. According to the White House, this includes a six-fold scale up of adaptation finance to over $3 billion per year and achieving record-levels of climate investments through the U.S. International Development Finance Corporation and U.S. Export Import Bank.
Following is a statement by Melanie Robinson, Global Climate, Economics and Finance Director:
"It is very encouraging that the United States has surpassed its climate finance goal, providing over $11 billion a year towards international climate finance. This demonstrates that the U.S. is starting to play the fuller role in climate finance that many have been calling for. The more than six-fold increase since fiscal year 2021 is delivering real benefits for people, nature, and avoiding dangerous climate impacts. By stepping up its efforts, the U.S. is not only supporting international climate action but also creating new markets and more resilient supply chains for its own green goods and services. It will be good for the world and good for the US if these increases continue."
Tracking Climate Action United States U.S. Climate G20 climate finance COP29 Type Statement Exclude From Blog Feed? 0Securing the Future of U.S. Industries with Decarbonization
With carbon border adjustments like in European Union taking effect and gaining traction globally, industries around the world will be expected to produce lower carbon products and reduce their emissions or pay import fees to the recipient country based on their emissions. While this trend is in its infancy, it is likely to grow as countries around the world increase efforts to mitigate climate change. The United States must leverage existing federal provisions and put in place new, innovative policies to reduce emissions from its industrial sector to secure the future of American industries and ensure their continued competitiveness in global markets.
The heavy industries which produce the concrete, steel and chemicals that the U.S. economy depends on also produce 23% of the country’s greenhouse gas (GHG) emissions. And, according to an analysis by the Rhodium Group, the industrial sector is projected to become the highest emitting sector in the U.S. by the early 2030s. While the power sector has reduced emissions by 36% since 2005, emissions from heavy industry have essentially remained stagnant, only decreasing 7% by 2023. According to Rhodium’s modeling, GHG emissions for the industrial sector will remain the same or increase slightly by 2035 before decreasing only 5 to 10% below 2022 levels by 2040, while emissions from the transport and power sectors are expected to decrease consistently through 2040.
Nevertheless, momentum to tackle industrial emissions is gaining speed. In the last few years, the U.S. Congress has passed some of the most ambitious and significant pieces of climate change legislation in the world. Through the Bipartisan Infrastructure Law (BIL), the Inflation Reduction Act (IRA) and the CHIPS and Science Act (CHIPS), around $133 billion of funding is directed to programs related to the industrial sector (as outlined in the table below). This includes funding for programs like the Industrial Demonstrations Program, which are specifically geared toward industrial decarbonization, as well as those like the Hydrogen Hubs program or the 45Q Carbon Oxide Capture and Sequestration tax credit, which are not industrial decarbonization-specific programs, but can help to reduce emissions from the industrial sector.
Of this approximately $133 billion available for industrial-relevant programs through the BIL, IRA and CHIPS, we estimate that around $18 billion of government funding will be dedicated to decarbonizing heavy industry through grants and loans with additional support available through tax incentives.
These policies not only accelerate emissions reductions — they are also creating jobs across the U.S, and revitalizing communities. Overall, the policies within the BIL, IRA and CHIPS are estimated to create 336,000 manufacturing jobs annually throughout the duration of the programs. The projects catalyzed by these policies can help revitalize low-income and traditional manufacturing communities. The Industrial Demonstrations Program alone, through its $6.3 billion of public grants and approximately $15 billion in stimulated private investments, is expected to create at least 7,000 permanent manufacturing jobs, upskill around 4,000 jobs, and generate over 20,000 temporary construction jobs throughout 31 major manufacturing projects across the country. Much of this investment from the IRA and BIL is being directed to low-income, historical manufacturing communities in states like Indiana, Pennsylvania, Ohio, Louisiana and Texas. Furthermore, these policies will boost American competitiveness in international markets that increasingly prioritize climate considerations. As markets like the EU increasingly favor low-carbon products, these industrial decarbonization policies will position U.S. manufacturing to more effectively compete in the global arena.
More Momentum Is Needed to Decarbonize the Industrial SectorWhile this funding for industrial decarbonization is unprecedented, it is still just a fraction of the amount needed to put the sector on track to reach net-zero emissions and remain globally competitive. The U.S. Department of Energy estimates that between $700 billion and $1.1 trillion in public and private investments will be needed to decarbonize U.S. heavy industry by 2050. In addition, the grants, tax credits and green procurement policies featured in the BIL, IRA and CHIPS represent only a few of the diverse suite of policy mechanisms that will be needed to achieve deep and rapid decarbonization of the industrial sector. Other policies that can put the sector on track include more industrial-focused tax credits and subsidies, more market stimulating demand-side policies like advance market commitments and market-based policies like a low-carbon product standard. These policies, among others, can be the basis of the next generation of federal industrial policies to compliment and support those in the BIL, IRA and CHIPS.
Industrial decarbonization policies present real opportunities for bipartisan cooperation in Congress. A few recent examples include the Concrete and Asphalt Innovation Act, IMPACT Act and IMPACT Act 2.0 — all bipartisan bills geared toward decarbonizing the asphalt, cement and concrete sectors through research and development and green procurement. Another bill, the PROVE IT Act, seeks to collect data on various emissions-intensive products and was endorsed by a diverse bipartisan coalition of senators.
There is no time to waste. To keep the U.S. on track for a net-zero economy by 2050, it is essential to continue existing programs, disburse funding and lay the groundwork for policies to accelerate progress. This will help bolster a bright future for U.S. industries by spurring innovation, creating hundreds of thousands of green manufacturing jobs and ensuring American products are competitive in international markets.
Table: Provisions in recent legislation (BIL, IRA and CHIPS) and Department of Energy funding opportunity announcements relevant to the industrial sector.ProgramLegislationType of PolicyOverall Government FundingEstimated Funding for Industrial UsesHydrogen Hubs Demand-side ProgramBIL Sec. 40314Demand-side program$1 billionUndetermined
Carbon Storage Validation and Testing ProjectsBIL Sec. 40305Grants$2.5 billion
Undetermined
Carbon Utilization Procurement GrantsBIL Sec. 40302Grants$310 million$310 million *Clean Hydrogen ElectrolysisBIL Sec. 40314Grants$1 billion
Undetermined
Clean Hydrogen Manufacturing and RecyclingBIL Sec. 40314Grants$500 million
Undetermined
Climate Pollution Reduction GrantsIRA Sec. 60114Grants$5 million$636 million †DOE Research, Development, and Demonstration ActivitiesCHIPS Sec. 10771Grants$11.2 billion$83.33 million ††Energy Storage Demonstration and Pilot Grant ProgramBIL Sec. 41001Grants$355 million
Undetermined
EPD Assistance ProgramIRA Sec. 60112Grants$250 million$250 million *Fission for the Future ProgramCHIPS Sec. 10781Grants$800 million
Undetermined
Front-end Engineering and Design Studies for CO2 Transport InfrastructureBIL Sec. 40303Grants$100 million$33 million ¶IEDO FY23 Multi-topic Funding Opportunity AnnouncementDE-FOA-0002997Grants$171 million$171 million *IEDO FY24 Energy and Emissions Intensive Industries Funding Opportunity AnnouncementDE-FOA-0003219Grants$83 million$83 million *Industrial Efficiency and Decarbonization (IEDO) Funding Opportunity AnnouncementDE-FOA-0002804Grants$135 million$135 million *Industrial Emission Demonstration Projects (IDP)BIL Sec. 41008Grants$500 million$500 million *Industrial Research and Assessment Center Implementation GrantsBIL Sec. 40521Grants$150 million$150 million *Industrial Research and Assessment CentersBIL Sec. 40521Grants$400 million$400 million *Low Emissions Steel Manufacturing Research ProgramCHIPS Sec. 10751Grants
Undetermined
Undetermined
Low-Embodied Carbon Labeling Program for Construction MaterialsIRA Sec. 60116Grants$100 million$100 million *Regional Clean Hydrogen Hubs ProgramBIL Sec. 40314Grants$7 billion$1.2 billion §Technology Commercialization Fund (TCF)IRAGrants$15 million$15 million *Advanced Energy Manufacturing and Recycling GrantsBIL Sec. 40209Grants$750 million$375 million §Advanced Industrial Facilities Deployment Program (IDP)IRA Sec. 50161Grants$5.81 billion$5.81 billion *Carbon Capture and Storage Large Scale Pilot ProjectsBIL Sec. 41004Grants$937 million$562 million §Carbon Capture Demonstration ProjectsBIL Sec. 41004Grants$2.53 billion$773 million ||Carbon Dioxide Transport Infrastructure Finance and Innovation ProgramBIL Sec. 40304Grants$2.1 billion
Undetermined
Carbon Materials Science InitiativeCHIPS Sec. 10102Grants$250 million
Undetermined
LPO Funding for Title 17 Clean Energy Financing ProgramIRA Sec. 50141Loans$40 billion$1.39 billion #Federal Buy Clean Initiative: Federal Highway AdministrationIRA Sec. 60506Procurement$2 billion$2 billion *Federal Buy Clean Initiative: FEMAIRA Sec. 70006ProcurementUndetermined
Undetermined
Federal Buy Clean Initiative: General Services AdministrationIRA Sec. 60503Procurement$2.15 billion$2.15 billion *45Q Carbon Oxide SequestrationIRA Sec. 13104Tax Credit~$30.3 million **
Undetermined
45V Clean Hydrogen PTCIRA Sec. 13204Tax Credit~$4.7 billion***
Undetermined
48C Advanced Energy Project CreditIRA Sec. 13501Tax Credit$10 billion$1.3 billion §Total Funding
$133.1 billion
$18.43 billion
Footnotes
* Industrial Specific Program
† U.S. EPA
†† 5 out of 48 Active ARPA E Programs relate to industry. (US DOE, n.d.-b) Assuming all programs receive equal shares of funds, this fraction extrapolated to the $1 billion of ARPA E funding suggests $83.3 million will be directed to industry.
¶ First funding announcement had 3 projects, each selected to receive $3 million. 1/3 of the recipients is linked to industry.(Business Wire 2023) Assuming the first funding announcement is representative of the final funding, $3 million out of $9 million is extrapolated to $33 million out of the total $100 million.
§ Kielty 2024
|| DOE’s first round of 3 awards didn’t include industrial sector projects. In DOE’s second round Notice of Intent, 2 of the 3 awards totaling $750M were anticipated to be in the industrial sector. Assuming equal distribution among the awards, $500M of the $1.64B of funding announced in the first and second rounds will go to industry. If the remaining funding is allocated according to the same proportion as these first two rounds, a further $273M will be devoted to industrial projects, totaling $773M.
# Two industrial projects received $1.2 billion of the $34.9 billion in loans given through LPO’s Title XVII program. (US DOE, n.d.-a) Assuming this is representative of the total $40 billions of funds, $1.398 billion will be directed toward industrial sectors.
** Congressional Research Service 2023
***Congressional Research Service 2024
STATEMENT: Multiple Countries Commit to 6x Global Energy Storage and Modernize Grid to Advance Clean Energy Economy
BAKU, AZERBAIJAN (November 15, 2024) – At COP29, countries including UK, Uruguay, Belgium and Sweden committed to increasing the amount of global energy storage sixfold compared to 2022 levels, or 1,500 Gigawatts of capacity by 2030. The commitment comes a year after 133 countries committed at COP28 to tripling renewable energy capacity and doubling rates of energy efficiency by 2030.
Following is a statement from Jennifer Layke, Global Director, Energy, World Resources Institute:
“Energy storage and the power grid are essential for clean energy delivery but for too long they were not on the political agenda. This declaration signals that policymakers are committed to following through on their energy transition commitments and delivering clean energy to people. Now countries should make these pledges a reality by including specific goals for storage and the grid in their NDCs, national energy policies and plans and investments.
“Paired with last year’s pledges to triple renewable energy and double energy efficiency, this pledge completes the trifecta of global goals we need to build the clean, secure, resilient power system. Grid losses in 2018 were estimated to result in 1 gigaton of carbon emissions – with IEA data showing that over 70 countries lost above 10% of their power due to poor transmission and distribution infrastructure. Those wasted electrons are valuable assets to extend the reach of renewable, clean power for more people to benefit, and to electrify the economy as efficiently as possible. Grid investments should also include mini-grids as well as extending transmission and distribution infrastructure and upgrading existing power lines.
“Storage must include support for distributed as well as utility scale batteries, pumped-hydropower, and other longer duration opportunities One emerging opportunity for countries is to repurpose electric vehicle batteries for ‘second life’ applications. With the mass adoption of electric vehicles in the coming years, there will come with it a surge in the production of batteries and the retirement of automotive batteries. These EV batteries can be used in second-life applications as storage for renewable energy.”
Energy COP29 electric grid Type Statement Exclude From Blog Feed? 0STATEMENT: Countries Commit to 6x Global Energy Storage and Modernize Grid to Advance Clean Energy Economy
BAKU, AZERBAIJAN (November 15, 2024) – At COP29, countries including the US, UK, Brazil, the UAE and Saudi Arabia committed to increasing the amount of global energy storage sixfold compared to 2022 levels, or 1,500 Gigawatts of capacity by 2030. In addition, there was a commitment to add or refurbish 80 million kilometers of electricity grids by 2040. The commitment comes a year after 133 countries committed at COP28 to tripling renewable energy capacity and doubling rates of energy efficiency by 2030.
Following is a statement from Jennifer Layke, Global Director, Energy, World Resources Institute:
“Energy storage and the power grid are essential to the clean energy transition, but for too long have not been center-stage. This declaration signals that policymakers are now adding these essential services to their energy transition priority list. Now countries should turn this pledge into results by including specific goals for storage and the grid in their NDCs, national energy policies and plans, and investments.
“Paired with last year’s commitments to triple renewable energy and double energy efficiency, this pledge creates a trifecta of global goals we need to build the clean, secure, resilient power system that benefits people.
“One vital way that countries can meet the ambitious storage goal is by repurposing electric vehicle batteries for ‘second life’ applications. With the mass adoption of electric vehicles in the coming years, there will come with it a surge in the production of batteries.
“At their end of life, these EV batteries could be destined for recycling, but intrepid government agencies and corporations could establish marketplaces and build political will for battery collection and deployment in less demanding applications, such as storage for renewable energy. This can help bridge the gap in getting to 1,500 gigawatts of storage and prevent batteries from generating unnecessary waste.”
“Investment in grid infrastructure will also be essential as countries work toward a clean energy economy where no one is left behind. Energy efficiency often gets much less attention than other clean energy technologies but investing in a modern grid that minimizes transmission and distribution losses is essential if we’re going to optimize how electricity gets from the generator to people. As populations sprawl, governments also need to ensure that the electric grid can reach remote and historically underserved communities so they can benefit as much as those in urban centers.”
Energy COP29 renewable energy Type Statement Exclude From Blog Feed? 0Multilateral Development Bank Climate Finance: The Good, Bad and the Urgent
MDB Climate Finance Series
For the past eight years, we have analyzed MDBs’ Joint Reports on Climate Finance and highlighted key takeaways behind the headlines.
Editions include 2016, 2017, 2018, 2019, 2020, 2021 and 2022.
Multilateral development banks (MDBs) are major providers of the climate finance vulnerable nations need to reduce emissions and adapt to climate change. The MDBs’ latest annual Joint Report on Climate Finance, published in September 2024, shows they delivered a record-high $125 billion of public climate finance in 2023, of which 60% ($74.7 billion) was directed to low- and middle-income countries.
While the delivery of more international public climate finance is promising, finance for adaptation is lagging, we don’t know enough about how much is still being invested in fossil fuels, and — as many countries wrestle with debt management — the characteristics and terms of the financing for climate purposes are also crucial.
At the UN climate summit in Baku this month, governments are set to agree on a new collective quantified goal (NCQG) for global climate finance. MDBs have been a key channel for delivering the current climate finance goal and are likely to play a big role in the new one. At COP29, they issued a joint statement estimating their climate finance for low- and middle-income countries will rise to $120 billion by 2030.
Understanding how well MDBs are delivering on reforms to channel more, and better-coordinated, climate finance to the countries that need it most is therefore more important than ever. Here, we dive deep into the good, the bad and the urgent findings from MDBs’ 2023 Joint Report on Climate Finance:
The Good:1) MDBs are providing more climate finance to developing countries than ever before.About 60% of the total climate finance MDBs provided went to low- and middle-income countries, increasing from $60.7 billion in 2022 to $74.7 billion in 2023. Every MDB hit a new record high for the year in terms of total climate finance provided. (The table below shows how banks have updated their targets in the course of the past year.) And every MDB except for the Asian Infrastructure Investment Bank (AIIB) and New Development Bank (NDB) had their highest-ever share of climate funding as a percent of their overall financing.
Three banks also updated their targets for climate finance as a share of total financing; the Asian Development Bank (ADB) notably upped its ambition to 50% by 2030.
Post-2020 Target2023-24 Updated TargetsAfDBAt least $25 billion for 2020-25, prioritizing adaptation finance ADB$80 billion for 2019-2030 with interim target of $35 billion for 2019-24, and 65% of projects (by number of projects rather than amount of financing) on a three-year rolling average $100 billion by 2030, and 75% of projects supporting mitigation and adaptation50% climate finance target by 2030AIIB50% of annual loan volume by 2025; expects to reach $50 billion by 2030 EBRDMore than 50% of commitments support green finance by 2025 EIBMore than 50% of operations support climate action and environmental sustainability by 2025 globally; 15% of climate finance to support adaptation; No developing country specific target yet IDBGAt least 30% of finance for 2020-2340% of climate and green finance by 2025IsDB35% of overall annual lending by 2025 NDB40% of overall financing from 2022-26 WBGAverage 35% of overall financing from 2021-25, 50% of IDA and IBRD climate finance to support adaptation and resilience45% share of total financingNote: Colors relate to MDBs’ progress to meet their post-2020 targets. Red = “off track,” green = “on track,” yellow = “in between.”
2) The rate of private co-financing is finally starting to rise.Despite significant hype, MDBs (and, in fairness, other public finance institutions) have long struggled to deploy public funds in a way that mobilizes private investments at any significant scale. For years, MDBs’ mobilization ratio — that is, the amount of private finance mobilized for each dollar of public finance provided — has been stubbornly stuck at around $0.25.
But in 2023, it rose to $0.38. This is encouraging, but MDBs are still a long way from delivering on the promise of turning their “billions to trillions.” At $1:$0.38, each billion dollars of MDB climate finance mobilizes just $380 million in private investment. But if the increase in mobilization ratio continues to grow, it could demonstrate it is possible to mobilize private sector finance at scale, as experts believe is necessary to meet the trillions of dollars needed for investment in climate action in developing countries.
One possible reason for the rise is greater use of guarantees, which doubled as a share of overall MDB climate finance from 3% to 6%, their highest-ever level, between 2022 and 2023. Private sector actors frequently highlight that guarantees — where MDBs agree to repay or partly compensate a loan or equity investment in the event of default — help make their investments viable and allow them to offer financing to developing countries on more favorable terms. With proper due diligence, guarantees are rarely triggered and can therefore be a cost-effective way to mobilize private finance.
3) Tracking is getting better.In April 2024, MDBs published the MDB Common Approach to Measuring Climate Results, which acts as an overarching guide for reporting and tracking outcomes on climate and development. This approach could be transformative, connecting MDBs’ financing figures more closely to results on the ground, not just financial inputs.
This common approach also enables closer collaboration and coherence between stakeholders by measuring results in a consistent and comparable way across the diverse group of MDBs. It can help align MDB operations with broader global climate goals like the Paris Agreement by tracking impacts from MDB operations on mitigation, adaptation and country transitions. And it should make it easier for in-country counterparts and clients to work with a broader range of MDBs.
If also shared across the wider system of development banks and finance institutions, common approaches could be central to achieving systemic financial shifts amongst both MDBs and many other development partners. This includes national development banks, commercial banks, co-financiers or project co-sponsors, climate funds and local recipients of the funds.
The Bad:1) MDBs need to improve the quality of their climate finance and ensure sufficient concessionality to match needs.Last year at the UN climate conference (COP28), countries noted the importance of highly concessional finance and non-debt instruments to support developing countries, recognizing that more fiscal space can unlock greater climate action. Whilst less concessional finance can be appropriate for high-income countries and investments with identified revenue streams, grants and concessional finance are particularly important for poorer and more indebted countries, as well as for climate investments with less immediate economic return or that need much longer tenors, such as in adaptation. (Concessional finance is provided on more favorable terms, such as lower interest rates, than would be available on the market. “Non-debt instruments” offer finance as grants, equity or insurance instead of loans.)
Yet, between 2019 and 2023, 67% of total climate finance from MDBs to low- and middle-income economies came in the form of investment loans. The report does not provide details on the degree of concessionality of MDB loans, which makes it challenging to assess the debt sustainability of MDB financing. But what the report does show is that both the share and absolute amount of MDB climate financing as grants decreased from 10% ($6.08 billion) in 2022 to 6.7% ($4.98 billion) in 2023, which is a concern when three-fifths of low- income economies are at risk of, or are already in, debt distress, and needs for adaptation finance are so high. As balance sheet measures and potential capital increases boost less-concessional lending, this needs to be accompanied by growth in the concessional arms of MDBs, especially those with large numbers of lower-income and highly climate vulnerable clients.
2) Continued financing of fossil fuels.Despite MDBs’ joint commitment to climate action and decarbonization (including through support for long term strategies), they continue to finance fossil fuels. Furthermore, despite commitment to unified reporting on climate results and impact, this financing is not transparently reported alongside climate finance numbers. We detailed last year how this could be fixed. Frustratingly, no major progress has been made.
Going forward, MDBs should transparently disclose fossil finance alongside climate finance and direct their financing and convening power to support countries’ just transitions to sustainable energy.
3) The share of climate finance going to the countries most vulnerable to climate change is decreasing.Small Island Developing States (SIDS) and Least Developed Countries (LDCs) are particularly vulnerable to the impacts of climate change. For example, the UN’s Sustainable Development Goals (SDGs) Report for 2024 finds that SIDS and LDCs sustain higher-than-average disaster-related mortality.
While MDBs directed an all-time high of $16.3 billion to LDCs and SIDS in 2023, the overall share of climate finance is decreasing. Apart from a slight drop in 2016, the share of climate finance from MDBs rose steadily to LDCs and SIDS in 2015-2020. This commendable trend came to an end in the wake of the pandemic, and 2023 saw a distinct year-over-year decline in financing, including an especially harsh $380 million (nearly 65%) decline from 2022 to 2023 for countries that are both SIDS and LDCs.
Note: Calculations are shown only for countries included in 2018 to maintain consistency with figures prior to the change in MDBs’ climate finance methodology in 2019.
The Urgent:1) MDBs can help shape an ambitious NCQG.At the UN climate conference this year (COP29), governments are set to agree on a new collective quantified goal to replace the current target for developed countries to mobilize $100 billion per year for developing countries between 2020 and 2025. MDBs are the largest channel for climate finance towards the $100 billion goal, delivering $46.9 billion in 2022. Since MDB climate finance has the potential to contribute significantly to the new goal, not least given their ability to leverage every $1 provided multiple times, signals from the MDB system about how their climate finance flows are likely to grow in future years can be helpful to negotiators as they deliberate on the size of the new goal.
In the last few years, shareholders have pushed the MDBs to embark on a reform process to unlock more capital and dedicate more of their resources to addressing the climate crisis. This has included changing their capital adequacy rules to provide more to client countries, pioneering new hybrid capital approaches to mobilize more finance, and setting higher targets for the share of their financing that goes towards climate. The MDBs could help inform the NCQG by publishing projections of how much the completed reforms and increased targets will raise their climate finance in the coming years.
MDBs have yet to reach their full potential for financing climate action; actions like those laid out in the G20-commissioned Independent Review of MDBs Capital Adequacy Frameworks (CAF) would go further. There are also calls for new money to replenish MDBs’ concessional windows and provide capital increases that will permanently boost the lending capacity of their non-concessional windows. The G20-commissioned Independent Expert Group on Strengthening Multilateral Development Banks estimates that if these reform proposals and funding increases are implemented, they could triple MDBs’ annual financing to $390 billion per year by 2030. Based on these estimates, if MDBs directed around half of their overall finance towards climate-related activities, MDBs’ overall climate finance could rise to around $195 billion per year, making an important contribution to investment needs.
These changes are not guaranteed — they’ll require concerted efforts by governments. Signals from shareholders that they want to see further reforms, generous concessional window replenishments, and capital increases in the coming years could pave the way for a concerted and coordinated scale-up of MDB finance to support whole-of-economy and sector transformations.
2) MDBs should rebalance the share of mitigation and adaptation finance.The Paris Agreement clearly states that the “provision of scaled-up financial resources should aim to achieve a balance between adaptation and mitigation.”
Some MDBs have tried to achieve balance between adaptation and mitigation in their climate finance targets. For example, the World Bank strives for half of its climate finance to support adaptation (though this notably excludes its private sector arm, IFC) and the African Development Bank (AfDB) prioritizes adaptation finance in its target.
However, most MDBs are struggling to maintain or increase their share of adaptation flows. Only ADB and the European Investment Bank (EIB) outperformed their five-year running average for adaptation finance as a portion of total climate finance in 2023. ADB allocated 43% of climate finance for adaptation in 2023, compared to an annual average of 25% since 2019; EIB allocated 19% of its climate finance for adaptation in 2023 and averaged 15% annually from 2019. The Islamic Development Bank (IsDB) and AfDB, which in previous years have led the MDBs in the share of climate finance for adaptation, conversely experienced five-year lows: IsDB allocated 30% of its climate finance for adaptation in 2023, compared to an annual average of 47% in 2019-2023. AfDB still allocated a majority of climate finance toward adaptation at 52% in 2023, but was nonetheless 7% lower than its average since 2019.
3) Development banks must start ‘working as a system.’The April 2024 viewpoint note highlighted the collaborative effort to improve MDBs working as a system and with partners to deliver greater impact and scale. In line with this statement, we should be seeing a shift from short-term, project-centered models towards a long-term programmatic perspective, in support of country and sector transformations. But we are not seeing this yet.
The volumes of co-finance with other MDBs and with other members of the International Development Finance Club increased from $8.5 billion in 2022 to $13.5 billion in 2023, and from $1.8 billion to $3.6 billion, respectively. There was a jump in private mobilization from $15 billion in 2022 to $29 billion in 2023. The “system” (development finance institutions co-financing with MDBs) has doubled the volumes of mobilized private finance this past year.
But while volumes of co-financing between MDBs and other members of the IDFC have risen, this has mostly occurred in higher-income countries. This kind of coordinated intervention must extend to lower-income countries, involving partners such as national development banks, to co-finance the transformative interventions upon which countries like Colombia, Indonesia, Vietnam, South Africa and Senegal are embarking. And MDBs, national development banks and other financiers should do more to simplify due diligence and other requirements.
The idea of “country platforms” as a way to bring domestic, international, public and private, development and climate finance together in a programmatic way behind country and sectoral transformations should help. But MDBs and other international partners need to give countries space to design these in a way that is truly country-led. And they need to provide more coherent and long-term technical and institutional support to ensure the building blocks are in place, from integrating climate and nature goals into development plans, to enacting enabling public policies. MDBs, together with all corners of the financial system, must be ready to support country and sectoral transformations by truly working as a coherent “system.”
What Comes Next?The sense of urgency is certainly being felt at the highest levels of decision-making, and some progress has been made on reforming the MDBs “to maximize their impact in addressing a wide range of global and regional challenges, while accelerating progress towards the SDGs,” as the G20 Roadmap reads. MDBs are playing an important role in putting climate (and nature) at the heart of development and economic planning and financing. The latest meeting of the G20 Finance Ministers and Central Bank Governors in October 2024 planned regular reviews of MDB evolutions, amid growing awareness that countries need greater and more effective support in their transitions to low-carbon, resilient, inclusive economies.
Further out, decision-makers signaled openness to exploring avenues on increasing the quantity of finance by mobilizing more and enhancing concessional finance, alongside “a clear framework for the allocation of scarce concessional resources” to help the poorest countries. Delivering a generous IDA 21 replenishment is the next milestone in this regard.
installing-solar-panels-south-africa.jpg Finance climate finance Climate Finance fossil fuels adaptation finance COP29 Type Finding Exclude From Blog Feed? 0 Projects Authors Natalia Alayza Valerie Laxton Carolyn Neunuebel Joe ThwaitesTrump May Thwart Federal Climate Action, but Opportunities for Progress Remain
With President Trump’s recent election victory, the United States faces a shifting policy landscape. The potential negative repercussions for climate and environmental action are gargantuan.
We’ve seen this show before: In his first term, Trump gutted federal climate initiatives while attempting to roll back 125 environmental protections critical to safeguarding people and the planet. While many of these attempts were overturned or halted in the courts, a second Trump presidency will likely be more successful in undermining laws and regulations designed to protect the climate, air, water and vulnerable communities.
Some of the major setbacks we can expect include massive cuts to climate-focused agencies like the Environmental Protection Agency and Department of the Interior, with climate-hostile directors at the helm; expanding oil and gas production and limiting clean energy development; rescinding billions in unspent funds from the Inflation Reduction Act and reallocating them toward high-carbon activities; and dismantling environmental justice initiatives. Federal climate policies will be put on ice, making it unlikely that the U.S. will meet its emissions-reduction targets. Internationally, the U.S. is expected to pull out of the Paris Agreement on climate change and reduce climate finance assistance to vulnerable nations. And these are just a handful of numerous potential setbacks — explore more in the carousel below.
11 Potential Climate Setbacks Under a Trump Presidency1. No New Federal Climate PoliciesOne of the most significant challenges under Trump’s second term will be the lack of new federal climate legislation. With the president focused on deregulation and supporting fossil fuels, federal initiatives to reduce emissions or invest in clean energy will likely stall. While policies like the Inflation Reduction Act and Bipartisan Infrastructure Law provide a foundation for progress, the absence of new federal policies will widen the gap between U.S. climate goals and its actual emissions trajectory.
2. Cuts to Climate-Focused Agencies & Climate-Hostile Agency DirectorsThe Project 2025 roadmap, drafted by Trump allies, encourages significant budget cuts to agencies leading on climate action, most notably the Environmental Protection Agency (EPA) and Department of Interior (DOI). With fewer resources, their ability to manage existing programs — such as emissions-reductions projects, clean energy incentives and environmental protections — will be hampered. Project 2025 also proposes overhauling federal science agencies like the U.S. Global Change Research Program and National Oceanic and Atmospheric Administration (NOAA).
In addition, Trump has vowed to appoint agency heads dedicated to dismantling as much climate policy as possible while striving to increase U.S. oil and gas output.
3. Reallocation of Climate FundsIn addition to cuts in agency budgets, Trump has promised to “rescind all unspent funds” under the Inflation Reduction Act. While nearly 90% of such funds have been spent, this still leaves billions on the table. Such reallocation would undermine clean energy investments and delay emissions reductions in key sectors like electricity generation and transportation.
4. Withdrawal from the Paris AgreementTrump’s withdrawal from the Paris Agreement during his first term weakened U.S. influence on international climate policy, and he has explicitly said he will pull the U.S. out of the accord again. Trump allies have also suggested exiting from the UN Framework Convention on Climate Change (UNFCCC), further isolating the country from multilateral efforts and international economic opportunities to address climate change. Trump may also end U.S. collaboration on key international initiatives, such as those addressing deforestation.
While no other country followed the U.S. in leaving the Paris Agreement in 2017 and likely will not this time, an exit could leave the U.S. with less leverage to influence other major emitters to be ambitious in their climate policies.
5. Cuts to International Climate FinanceTrump will undoubtedly attempt to cut international climate finance, weakening U.S. support for global climate mitigation and adaptation. As climate disasters intensify and disproportionately impact impoverished communities, major emitters like the U.S. must expand support to the nations that are hardest hit and least able to invest in the clean energy transition. Unfortunately, reduced U.S. funding and any unwillingness to boost Multilateral Development Bank capital could potentially dampen ambition among other donor countries.
6. Federal Rollbacks of Environmental ProtectionTrump has pledged to abolish 10 regulations for each new regulation implemented — a sharp escalation from the previous "two-for-one" rule during his first administration. The eliminated regulations will likely target most — if not all — of President Biden's energy and environment agenda. This includes greenhouse gas emissions rules for power plants and cars, as well as a fee on methane emissions.
7. Dismantle Environmental Justice InitiativesIn addition to freezing or rolling back the Biden administration’s environmental regulations, President Trump is certain to dismantle Biden’s Justice40 initiative, which establishes a government-wide goal to ensure that 40% of the overall benefits of certain federal investments flow to disadvantaged communities that are marginalized, underserved and overburdened by pollution. While such efforts may continue through various state and local initiatives, the lack of federal dollars and a whole-of-government approach will slow the pace of environmental justice work.
8. More Conservative Judicial AppointmentsA second Trump presidency combined with a solid majority in the Senate provides the opportunity to place hundreds more conservative judicial appointees on federal courts. Additional conservative appointments will almost certainly stall or reverse climate progress by having more judges who rule in favor of polluters in lawsuits that dismantle regulations and legislation that limit emissions. Whether through executive actions or judicial rulings, the impending environmental assaults will disproportionately impact environmental justice communities, which are unduly burdened by polluted air and water.
9. Removing Protections for Land and ForestsThe Farm Bill will be reauthorized under the Trump administration. If he has majorities in both the Senate and the House, we can be close to certain that lawmakers will rescind climate-smart requirements for using the Inflation Reduction Act’s $13 billion of conservation funding.
We can also expect weakened protections for forests and expanded logging. For example, if passed, the Fix Our Forests Act (H.R.8790) would limit public input into forest management planning and judicial review.
10. Weakened Federal Response to Climate DisastersPerhaps one of the most pernicious and dangerous aspects of the Trump administration is his history of weaponizing disaster aid based on which states and governors he views as enemies or allies. With ever-increasing fires, floods and other natural disasters greatly exacerbated by climate change, exercising such personal grievances could cause even more harm. For example, Trump recently threatened to force Gov. Gavin Newsom (D-CA) to weaken endangered species protections to increase agricultural water supply, saying, “We’ll force it down his throat, and we’ll say, ‘Gavin, if you don’t do it, we’re not giving you any of that fire money that we send you all the time for all the forest fires that you have.’”
11. Limiting ESG InvestmentsDuring the first Trump administration, the Department of Labor passed a rule making ESG investments more difficult. The Biden administration walked back the Trump rule and issued a new one permitting retirement plans to consider ESG issues. A new Trump administration and Republican Congress will likely revisit this. A proposed SEC rule requiring disclosure of climate risks will likely be shelved. If precedents from Republican states are followed, financial firms perceived as friendly to ESG could be blocked.
◀▶Indeed, a federal assault on climate would be both severe and devastating. Climate progress will slow at a time when the country needs to reduce its greenhouse gas emissions more rapidly and better protect its citizens from escalating floods, droughts, fires and other threats.
But all hope is not lost.
Climate Action Can Continue Even with a Trump PresidencyEven with new and strong headwinds, several pathways remain to keep momentum for climate action alive.
For one, there are bipartisan climate-friendly opportunities to seize, such as continued clean energy development, which has already delivered tremendous economic benefits in both red and blue states. There is also support from both sides of the aisle for next-generation geothermal energy and from the business community for decarbonizing heavy industries and strengthening international supply chains to ensure U.S. competitiveness and security. These initiatives would bolster U.S. manufacturing and national security, while also benefitting the climate.
In addition, subnational actors like states, cities, businesses and tribal nations boldly stepped up during Trump’s first term in office. They can — and early signs show they will — take up the mantle of leadership again in the climate fight.
Some of the major opportunities include:
Cyclists make use of New York City's bike lanes. Even without federal leadership on climate action, many cities will still pursue public transit, green infrastructure and other emissions-reducing initiatives. Photo by Adonis Page/Shutterstock Subnational LeadershipWhen President Trump announced in 2017 that the United States would withdraw from the Paris Agreement, American communities, states, tribal nations and business leaders quickly coalesced to form America Is All In. More than 4,000 mayors, governors, university presidents and business leaders signed the We Are Still In declaration, committing to meet the emissions-reduction targets set in the Paris Agreement and continue engaging with the international community. The 2019 Accelerating America’s Pledge report found that bottom-up leadership from states, cities, businesses and other subnational actors would reduce U.S. emissions by up to 37% by 2030, even without federal intervention.
And since the first Trump administration, subnational climate action initiatives have only grown in strength and commitment. Managing Co-Chair of America Is All In and former EPA administrator Gina McCarthy said recently, “No matter what Trump may say, the shift to clean energy is unstoppable, and our country is not turning back.”
Many states have enacted ambitious climate policies. For example, the 24 states and territories that comprise the bipartisan U.S. Climate Alliance, representing 54% of the U.S. population and 57% of the U.S. economy, have collectively committed to achieving net-zero emissions no later than 2050.
Some states are poised for even greater action before Trump takes office. In California, voters overwhelming approved Proposition 4, a $10 billion bond measure that will help the state prepare for the impacts of climate change. Just after the election, California’s Governor Newsom announced a special session of the state legislature to take steps “to safeguard California values”— including the fight against climate change — ahead Trump’s second term. A day later, the California Air Resources Board (CARB) approved updates to the state’s Low Carbon Fuel Standard (LCFS), designed to accelerate the development of cleaner fuels and zero-emission infrastructure to help the state meet legislatively mandated air quality and climate targets.
At the same time, voters in Washington state upheld a new law that forces companies to cut carbon emissions while raising billions to support programs such as habitat restoration and climate preparation. Maryland’s Governor Moore issued a wide-ranging executive order earlier this year directing state agencies to develop climate implementation plans to ensure the state could continue working towards its ambitious climate change targets, which aim for net-zero carbon by 2045.
In parallel, cities have long played a crucial role in advancing climate policies and will continue to do so. Climate Mayors, which started as a network of 30 mayors in 2017, is now a bipartisan network of nearly 350 U.S. mayors driving climate action in their communities. These cities continue investing in public transportation, green infrastructure and local emissions-reduction initiatives — all of which will continue to mitigate the impacts of climate change and build more sustainable urban environments with or without federal action on climate.
Clean Energy Incentives Have Staying PowerThe Inflation Reduction Act’s tax incentives, key to reducing emissions and building a low carbon economy, are popular across red and blue states, and are thus expected to endure.
In August 2024, eighteen House Republicans publicly urged House Speaker Mike Johnson not to repeal the clean energy tax credits in the Inflation Reduction Act, citing the need for business certainty and job creation in their districts. Acknowledging that some provisions have been helpful to the economy, Speaker Johnson said in September that he would use a scalpel, not a sledgehammer in amending the legislation should Republicans gain control of both chambers of Congress.
The data confirm that clean energy investments and job creation are occurring across the country and disproportionately in Republican-represented districts and states. The Inflation Reduction Act has already created more than 330,000 jobs. An August 2024 report from business group E2 revealed that in the two years since the Inflation Reduction Act was passed, 215 clean energy projects landed in Republican districts, compared to 119 in Democratic ones. Seven states — Arizona, Nevada, North Carolina, Georgia, Michigan, Wisconsin and Pennsylvania — are on track to host 44% of the clean energy manufacturing projects announced since the climate law was signed in 2022.
Georgia is the number one state for clean energy investments, according to multiple analyses. The state’s Republican governor is actively courting investments, recognizing the economic boom that clean energy initiatives bring.
With at least 354 clean energy projects announced across 40 states and investments surpassing $265 billion, the likelihood of Congress outright repealing these tax credits seems low. Even oil companies have urged Trump to maintain certain Inflation Reduction Act provisions for renewable fuels, carbon capture and hydrogen.
Electric vehicle charging stations at a parking lot in Bellingham, WA. Both red and blue states have benefitted from clean energy tax incentives from the Inflation Reduction Act. Photo by David Buzzard/Shutterstock Bipartisan Support for Climate-Friendly PoliciesAs we publish this piece, it looks certain that Republicans will hold the majority in both the Senate and the House of Representatives. Nevertheless, most policies will still require 60 votes in the Senate to become law, presenting opportunities to advance climate policies that have bipartisan support. Recent policy proposals focusing on carbon dioxide removal, industrial decarbonization, geothermal energy, critical minerals, nuclear energy, permitting reform and trade policy reflect bipartisan support for these issues, signaling potential areas for consensus.
Carbon RemovalThe bipartisan Carbon Removal and Efficient Storage Technologies (CREST) Act (S.1576) as well as the Carbon Removal, Efficient Agencies, Technology Expertise (CREATE) Act (S.2002) would boost research and development of carbon removal technologies through investments, procurement and interagency coordination. These bills, sponsored by Senators Collins (R-ME), Cantwell (D-WA), Cassidy (R-LA), King (I-ME), and Coons (D-DE) and by Senators Sinema (I-AZ), Murkowski (R-AK), Whitehouse (D-RI) and Capito (R-WV), respectively, are the types of legislation that could move forward in the next Congress, as they have bipartisan support as well as the backing of both industry and climate advocates. Collaborative efforts to advance carbon management technologies will allow the U.S. to better pursue a wide range of innovative technologies that simultaneously benefit the economy, manufacturing, American workers and the environment.
Industrial DecarbonizationIndustrial emissions are the fastest-growing source of greenhouse gas emissions globally, and the sector is set to become the highest emitter in the U.S. by 2030. The bipartisan Concrete Asphalt Innovation Act (S.3439), sponsored by Senators Coons (D-DE) and Tillis (R-NC), and the bipartisan companion bills IMPACT ACT (H.R. 7685) and IMPACT 2.0 (H.R. 9136), sponsored by Reps. Miller (R-OH) and Foushee (D-NC), would establish a promising U.S. effort to innovate and decarbonize America’s concrete and asphalt sectors, boost American competitiveness, bolster supply chains, reduce pollutants and create jobs. Another proposal, the bipartisan and bicameral PROVE IT Act, would direct the Department of Energy to study the carbon intensity of certain industrial goods produced or imported into the U.S.
These bills are important for competitiveness in a global marketplace that increasingly favors lower-carbon products. For example, as the E.U. begins implementing its Carbon Border Adjustment Mechanism (CBAM), one of the most extensive environmental trade policies to date, continued U.S. leadership as a global producer of goods like steel and aluminum requires American goods to be both high-quality and low carbon.
Next-Generation GeothermalNext-generation geothermal energy provides clean, firm power by harnessing Earth’s heat using advanced drilling technologies first developed in the oil and gas sector.
Geothermal energy is key to an “all-of-the above" energy approach and is concentrated in western states with supportive Republican members of Congress. Given the newness of these next-generation geothermal technologies, they received limited policy incentives in the Bipartisan Infrastructure Law and Inflation Reduction Act compared to other technologies, so there may be appetite to stimulate the industry through tax incentives, drilling support, greater energy development on public lands and permitting reform. Despite tight fiscal budgets, geothermal funding has remained constant given bipartisan support and funding from both the House and Senate appropriations bills for geothermal resource assessment.
Moving forward, Republicans are focused on geothermal permitting reform proposed in the HEATS Act (H.R.7409), which will be considered by the full House of Representatives soon. In addition, The Geothermal Optimization Act has bipartisan support, with lead sponsors including Senators Heinrich (D-NM), an avid climate hawk, Cortez-Masto (D-NV), and conservatives Risch (R-ID) and Lee (R-UT). This bill would expedite the process for geothermal observation well permits on public lands.
Nuclear EnergyNuclear power has broad bipartisan support, with significant potential to grow this source of low carbon energy. Earlier this year, Congress passed and the president signed bipartisan legislation that included the ADVANCE Act, which includes incentives for developing and deploying new nuclear energy technologies. In November 2024, the White House released a new framework report, proposing to triple domestic nuclear capacity by 2050, according to Ali Zaidi, climate advisor to President Biden.
As U.S. energy demand continues to grow to power data centers and electrify transportation and manufacturing processes, bipartisan support will be needed to accelerate the deployment of new reactor technologies and modernize the licensing process.
Critical MineralsCritical minerals are essential components in wind turbines, solar panels, EV batteries, motors and more. National security concerns over critical minerals have increased interest in new federal policies. Several critical mineral bills have bipartisan support, demonstrating a collective commitment likely to persist under a Trump presidency. For example:
- The bipartisan Critical Minerals Security Act of 2024 (3631) proposes global reporting on critical mineral and rare earth elements, as well as a strategy for developing advanced mining and processing technologies;
- The Critical Mineral Access Act (R.4977) supports projects in high-income countries to develop critical materials if such support furthers U.S. national security interests;
- The Good Samaritan Remediation of Abandoned Hardrock Mines Act of 2024 (2781), passed in the Senate in July 2024, allows non-owners to clean up a mine without assuming liability.; and
- The Intergovernmental Critical Minerals Task Force Act (1871), which passed the Senate in September 2024, aims to coordinate government efforts to reduce U.S. reliance on China for critical minerals.
Permitting reform is essential to achieving U.S. climate goals. While both parties support it, priorities differ: Democrats focus on transmission permitting reform, which is crucial for bringing more clean energy projects online, while Republicans seek fewer permitting restrictions for fossil fuel projects.
Despite these differences, the Senate has shown broad bipartisan support for the Energy Permitting Reform Act (S.4753), which passed out of the Energy and Natural Resources Committee with a 15-4 vote on July 31, 2024. Bill sponsors hope to pass the bill in the full Senate during the lame duck. While climate champs in Congress have heralded the bill as saving between 0.4 and 15.7 gigatons of CO2 emissions, many environmental groups oppose it. If there is a Republican trifecta with House, Senate and presidential control — which seems likely as of today — bipartisan progress on transmission reform may be less likely, hindering the potential to bring new clean energy projects online.
Trade PoliciesNew trade policies could help or harm the climate, depending on the details.
Imposing tariffs on imports with high industrial emissions, such as cement and steel, could reduce what is known as “emissions leakage,” moving pollution out of the country by importing energy-intensive goods rather than producing them domestically. However, many details would need to line up, including how these policies would achieve the intended effects with other countries. Because there is some bipartisan support for U.S. legislation to respond to the E.U.’s Carbon Border Adjustment Mechanism and incentivize low-carbon industrial products, something positive for the climate might emerge in this space.
Some tariffs on clean energy goods could bolster U.S. manufacturing and ease reliance on lower-cost Chinese products. However, Trump’s touted tariffs on Chinese imports could also cause severe supply-chain upsets, raising the costs of U.S. energy investments, specifically for wind turbines, solar cells and battery materials.
Businesses Will Continue to Be a Force for Climate ActionCorporate sustainability has come a long way in the U.S. in recent years, and progress is likely to continue even under a Trump presidency.
For example, nearly half of the country’s leading companies have a net-zero emissions target. Thousands of businesses have joined initiatives like the We Mean Business coalition and America Is All In initiative. And in response to the U.S. election results, Ceres, a network of investors and companies, said, “There is no doubt that the largest U.S. investors and companies will continue embracing the opportunities of the current clean energy boom, setting net-zero emissions goals, and adopting transition action plans.” Ceres’ CEO and President Mindy Lubber went on to say that “businesses have been some of the strongest advocates for urgently needed government action —and they will continue to meet with lawmakers on both sides of the aisle to voice their support for it. Investors and companies also stand ready to continue fighting for the rights of investors and financial institutions to assess all material financial risks in decision-making and to defend their freedom to invest and operate responsibly.”
Momentum for US Climate Action Will ContinueTrump’s second term will inevitably slow the pace of U.S. climate action. But what it cannot do is stop the underlying momentum.
The progress made possible by the Inflation Reduction Act and Bipartisan Infrastructure Law will continue to propel clean energy forward while local, state and private sector leaders carry the torch even further. Much of America is still committed to creating a safe and prosperous future — even if its leadership isn’t.
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