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.
arizona-solar.jpg Climate United States U.S. Climate Energy renewable energy Cities International Climate Action international climate policy Type Commentary Exclude From Blog Feed? 0 Projects Authors Christina DeConcini Jennifer Rennicks Gabby HymanCountries Have Been Overlooking Their Biggest Climate Allies: Local and Regional Governments
Cities are home to more than half the world's population: 4.4 billion people commuting, working, eating, shopping, and using light, heat and air conditioning. As a result, cities collectively produce over 70% of the greenhouse gas (GHG) emissions warming the planet. They are also on the frontlines of the climate crisis, experiencing the increasingly devastating effects of storms, floods, extreme heat and wildfires firsthand.
Local and regional governments will play a central role in delivering solutions that can correct the world's climate trajectory — from electrifying public transport to reimagining parks and green spaces. Research shows that cities could cut their emissions 90% by 2050 using measures that are already available. But doing so isn't easy or cheap. Indeed, two-thirds of this potential hinges on supportive policy and regulation at the national and regional levels.
National climate plans have often overlooked opportunities for action at the city, state and regional levels in the past. That's beginning to change as cities rise to a more prominent spot on the global climate agenda. Now, the question is how national governments will redesign their new climate strategies under the Paris Agreement, due in 2025, to help city and local governments meet their full potential.
Some countries are already proving how stronger collaboration between levels of government can unlock powerful results for the planet. From India to Kenya, Chile and beyond, these leaders show how multilevel partnership can drive climate action and ambition at the scale needed.
Delivering 50,000 Electric Buses in India by 2030In India, buses are an essential mode of transportation, accounting for 75% of all public transport trips and serving over 70 million people every day. But with only one bus per 1,000 people, the current fleet falls short of what India's booming urban population needs. And most of the buses operating today are powered by polluting, planet-warming diesel.
Electric buses (e-buses) offer a two-fold solution: A way to expand public transit access while also reducing air pollution and emissions. Clean transport is a priority for the national government's strategy to reach net-zero emissions by 2070. The challenge is that buses are bought and operated at the local level — and many cities have struggled to make the shift to electric due to high costs (2-3 times more than diesel buses) and complicated procurement processes. Bus operators and manufacturers have also hesitated to invest due to high production costs.
India's "Grand Challenge" initiative sought to tackle these roadblocks and unlock local e-bus deployment through top-down support. It united five large cities, combining their demand under a single procurement contract, to help secure uniform pricing and streamlined specifications. Meanwhile, the national Ministry of Heavy Industries provided critical financial support through an electric vehicle subsidy program.
An electric bus winds through a crowded street in New Delhi, India. Support from the national government has helped unlock e-bus procurement in major cities throughout India. Photo by Sipa USA/Alamy Stock PhotoThis combination of national support, demand pooling and standardized contracts effectively minimized both financial risks and overall costs. Cities participating in the initiative have seen the lowest e-bus prices in India to date, with costs falling 30% below diesel and natural gas buses. Manufacturers were able to scale up production thanks to guaranteed volumes and payment security mechanisms. By lowering operational and financial hurdles, the initiative has encouraged private sector investment and allowed cities to focus on deploying e-buses rather than navigating complex procurement processes.
This success has had a ripple effect nationwide. The Grand Challenge led to the formation of the National Electric Bus Program (NEBP), which aims to procure 50,000 electric buses across hundreds of Indian cities by 2030.
Financing Electric Two- and Three-Wheelers in KenyaElectric mobility is also top of mind Kenya, where the transport sector is the third-biggest source of GHG emissions. The country's National Climate Change Action Plan identifies transport as a priority area for intervention — and it's especially focused on electrifying the two- and three-wheelers that provide 22 million motorcycle taxi rides every day.
To this end, Kenya's Ministry of Roads and Transport and Ministry of Environment are collaborating with local and regional governments on the Small Vehicles E-Mobility project. Through the initiative, the national government will mobilize US$7.9 million in subsidies to make e-vehicles more affordable in rural areas and city outskirts, which account for over 70% of the country's population.
Most of this funding will be channeled through a first-loss credit guarantee fund, worth US$7.1 million, that is designed to take on the initial financial risks if new investments don't perform as expected. This should ultimately make investments in e-vehicle manufacturing and assembly less risky and more attractive to private investors.
Subnational governments play an essential role in helping localize these solutions by supporting infrastructure (like charging stations) and local manufacturing opportunities. This collaborative approach addresses both the demand and supply sides of e-mobility, ensuring that the shift towards electric vehicles is sustainable and economically viable.
Mainstreaming Climate Action in ChileChile is seen as a leader in the climate action sphere. Its robust climate strategy covers almost every emissions source to reach net zero by 2050. In 2021, the country developed its first sectoral carbon budgets; these mandated emissions reductions in sectors like energy, mobility and land use, assigning the work to specific agencies and holding sectors accountable through budgetary sanctions.
A wind farm on the Pacific coast near Coquimbo, Chile. Chile, a world leader in renewable energy, is accelerating its low-carbon transition by enabling every level of government to plan and implement climate action. Photo by EAQ/iStockBut Chile went a step further when it enacted the Climate Change Framework Law in 2022. The law overhauled the way climate action is implemented in the country, shifting the sole burden away from the Ministry of Environment and spreading it between 17 different ministries. Chile has also empowered its local governments, including cities and regions, to develop and implement local climate policies. This streamlined decision-making has led to a boom in climate policy work throughout the country, shortening timelines for policy development and giving the agencies tasked with achieving net zero more autonomy to reach their goals.
Notably, Chile's climate law included procedural regulations that could lay the foundation for an emissions trading scheme. And the country has created new councils and committees to support policy development, accountability and public engagement, helping ensure that climate initiatives have the continuity and support they need to make a lasting impact.
How National Governments Can Unlock Local Climate Action2025 will be a pivotal moment for countries to deliver ambitious new national climate commitments (known as Nationally Determined Contributions, or NDCs) that elevate local and regional governments as partners in climate action. But crafting these plans is just the first step; it will take much stronger policy, finance and collaboration to actually deliver them.
Developing Stronger NDCs with States, Cities and RegionsWRI's new working paper offers practical recommendations, case studies and more to help national governments foster inclusive development of NDCs in partnership with subnational governments.
Looking ahead, governments should strive to deliver three key outcomes that will help enable action and ambition at the scale needed:
1) Enhance coordination at all levelsFollowing leaders like India, Kenya and Chile, all countries should work to strengthen collaboration among levels of government. This can include creating a shared vision through national development or climate change plans, evaluating synergies or trade-offs between the objectives of various government levels, and integrating local data into national GHG inventories.
Rwanda, for example, leveraged its Environment and Natural Resources Sector Working Group — which includes representatives from the environment, resources, forestry and agriculture ministries, as well as development actors in the private, public and research sectors — to verify data and monitor and evaluate results on NDC implementation. In its 2020 NDC update, Rwanda itemized every mitigation and adaptation measure as well as the entity (such as the ministry or sector) responsible for implementation to enhance accountability and follow-through.
2) Finance resilient and collaborative climate pathwaysNational and subnational governments alike must collaborate with financial providers to sustainably fund climate action and address barriers to accessing finance. On the demand side, governments can work with partners in the real economy — such as NGOs, start-ups and public service providers — to reduce risks and incentivize climate action without increasing public debt. They should also address traditional and climate-specific investment barriers, such as a preference towards short-term profitability, a reliance on voluntary commitments, or insufficient data on climate risks to financial performance and portfolios. On the supply side, financial providers like private investors or development banks should align their models and decision-making with national and local climate plans.
As part of Norway's 2020 NDC update, the country introduced new measures to help coordinate NDC implementation across sectors and improve cities' access to climate finance. Through a nationwide carbon pricing scheme, Norway was able to substantially increase funding to build and maintain railways, providing EUR 31.8 billion (US$34.3 billion) in 2022 alone. This has improved passenger and freight transport across nine of the country's largest metro areas.
Train passengers at Oslo's central railway station. Funding from the national government has allowed major cities in Norway to expand and improve rail infrastructure, offering more sustainable alternatives to car travel. Photo by alisa24/iStock 3) Strengthen local implementation capacity through partnerships and resourcesNational climate commitments can often be difficult to translate into relevant actions at local or regional levels. While subnational governments are uniquely placed to catalyze climate action across specific sectors (like transport) and convene local stakeholders, many face resource constraints. Capacity, especially staff capacity, remains a critical barrier. National governments can offer resources, technical assistance and stakeholder partnerships to help overcome these hurdles and empower local leaders to set and pursue ambitious climate targets.
South Africa developed a unique Local Government Climate Change Support Program, which fosters collaboration between different levels of government through peer exchange and vertical dialogue. The program is designed to integrate climate change into local development plans and support municipalities in developing and funding climate projects. In this way, South Africa can catalyze climate action through intergovernmental relationships.
Climate Solutions Need All Hands on DeckAll levels of government have a critical role to play in the transition to a net-zero, climate-resilient future. Local and regional governments will be pivotal in delivering solutions that can correct the world's dangerous climate trajectory. Through multilevel partnerships, national governments can significantly enhance the ambition, credibility and long-term implementation of climate commitments and actions — starting with their 2025 NDCs.
What Is CHAMP?
The Coalition for High Ambition Multilevel Partnerships (CHAMP) for Climate Action was launched at the 2023 UN climate summit (COP28). It aims to help national governments enhance cooperation with subnational governments in the planning, financing, implementation and monitoring of climate strategies for the collective pursuit of climate change mitigation, adaptation and resilience. CHAMP emerged in response to a critical gap in climate target implementation and is supporting national-subnational collaborations. Learn more about CHAMP here.
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STATEMENT: Brazil Releases New 2035 Emissions Reduction Target
BAKU (November 13, 2024) – Today, Brazil announced its new commitment to reduce emissions by 59% to 67% by 2035, as compared to 2005. In absolute terms, this target translates to a reduction of 850 million to 1.05 billion tons of carbon dioxide equivalent by 2035.
Following is a statement by Karen Silverwood-Cope, Climate Director, WRI Brasil:
“Brazil's new climate target shows that it is ready to tackle the climate crisis head-on, as long as the country strives for the highest end of its emission reduction target. Cutting emissions by 67% by 2035 could put Brazil on a pathway to reach net-zero by 2050. Getting there requires bold domestic policies to halt deforestation and promote restoration, decarbonize its energy sector and foster green industry. Embarking on this journey to a new climate economy will create jobs, boost economic growth and avoid more dangerous climate impacts. The government must also ensure these actions promote social justice and build resilient communities.
“On the other hand, if Brazil only meets the low end of its emissions reduction target, the country will veer well off track from delivering on its climate goals. As host for next year's climate negotiations, President Lula has a responsibility to lead by example and aim high.
“Brazil’s NDC relies heavily on its forests to meet its targets, focusing on combating deforestation while implementing the plan to restore 12 million hectares of native vegetation by 2030. Curbing deforestation and restoring forests at scale is absolutely crucial. Also, to position itself as a climate leader Brazil must make progress in the energy and agriculture sectors, which are projected to be major sources of pollution in the years to come.”
International Climate Action Brazil NDC COP29 Type Statement Exclude From Blog Feed? 0STATEMENT: U.S. Methane Fee Holds Oil and Gas Producers Accountable for Pollution
BAKU (November 12, 2024) – Today at COP29, the U.S. Environmental Protection Agency (EPA) announced a new rule that requires oil and gas producers to pay a fee for releasing excess methane emissions. The methane fee, mandated by the Inflation Reduction Act, requires violators to pay $900 per metric ton of excess methane emissions that are above the government threshold rolling up to $1,500 per metric ton starting in 2026.
In 2023, the EPA finalized a rule to cut methane emissions in the oil and gas industry from both new and existing sources. That rule requires methane leak monitoring, phasing out routine flaring from oil and gas wells, and equipment upgrades to prevent leakage.
The United States has played a key role in international efforts to address methane pollution and helped launch the Global Methane Pledge in 2021. At COP28, more than 150 countries committed to a goal to collectively cut methane emissions by at least 30% by 2030.
Following is a statement by Christina Deconcini, Director of Government Affairs, World Resources Institute:
“This new methane rule is a key step for the United States to protect human health and address the climate crisis. For the first time, the rule requires the U.S. oil and gas industry to pay for excessive amounts of methane pollution which harms human health and is a potent greenhouse gas. An EPA analysis found that the reduction of methane emissions could avert thousands of early deaths, prevent 97,000 cases of asthma symptoms, and save 35,000 lost school days a year.
“The American people value clean air and healthy communities. If Donald Trump attempts to rescind the rule when he takes office, he would be putting Americans at risk.”
Denmark’s Groundbreaking Agriculture Climate Policy Sets Strong Example for the World
Denmark’s groundbreaking new agriculture and climate policy, which taxes greenhouse gas (GHG) emissions from livestock production, restores nature and pays farmers to reduce nitrogen pollution, is the world’s most comprehensive national effort to address the environmental challenges of agriculture.
Globally, agriculture and associated land use change contribute around one quarter of GHG emissions. To keep global warming below 1.5 degrees C (2.7 degrees F) — or even under 2 degrees C (3.6 degrees F) — governments must take ambitious action to reduce emissions from food systems. However, so far, governments have only devoted a fraction of their efforts to reducing agricultural emissions as they have for fossil-fuel emissions.
Agricultural emissions are particularly significant in Denmark. Today, they contribute more than one quarter of Denmark’s GHG emissions, and with the country’s expected measures to decarbonize energy and transport emissions, agriculture could account for the majority of national emissions within a decade. The country has set ambitious goals to reduce overall economy-wide emissions by 70% by 2030.
Cows graze in a Denmark meadow. Denmark's new agriculture policy hopes to make the country a leader in using mitigation technologies for agriculture just as Denmark has been a leader in wind production. Photo by Frank Bach/Alamy Stock Photo.Since 1990, Danish farmers have already made some progress by reducing excess nitrogen use — which helps mitigate harmful nitrous oxide emissions — and by increasing the efficiency of the dairy and pork sectors. But until recently, no policy existed that would achieve the country’s announced goal to reduce agricultural emissions by 55% to 65% by 2030.
In June 2024, Denmark announced a Green Tripartite Agreement between government, the environmental community and the agriculture industry, which combines regulatory teeth and largescale government funding to address emissions. The comprehensive policy will simultaneously reduce the country’s nitrogen pollution and improve biodiversity by restoring peatlands and planting new forests.
These new measures complement Denmark’s previously announced efforts to increase production of plant-based proteins and to reduce food loss and waste. The capital city of Copenhagen, which has signed WRI’s Coolfood Pledge, reduced its food procurement-related emissions by 25%, a year earlier than the original 2025 goal, by reducing its consumption of meat and shifting toward plant-based foods. Taken together, these efforts make Denmark a leader in the Produce-Protect-Reduce-Restore actions that WRI research has shown are necessary to feed a growing world population while reducing GHG emissions and restoring nature.
Here we take a closer look at why this new policy is so significant and how it should serve as inspiration for other countries to create similar policies.
What’s in Denmark’s New Agriculture and Climate Policy?Denmark is a net exporter of agricultural products — primarily pork and dairy — and by one estimate, the country produces three times more food than it consumes. Denmark also accounts for 7% of Europe’s pork production and 4% of its milk.
This contribution to global food supply comes with environmental costs. Around half of Denmark’s agricultural greenhouse gas emissions result directly from production of meat and milk in the form of enteric methane (“cow burps”) and manure management. Other major emissions result from the application of nitrogen fertilizer and manure to soils, and from drainage and farming of peatlands, which releases much of the carbon in peatland soils. Beyond the resulting GHG emissions, the losses of nitrogen through the air from livestock farms and through leaching of water from farm fields contributes to serious pollution in coastal waters. And because Denmark has devoted so much of its land to cropping for animal feed, only a tiny percentage of land is devoted to valuable habitats, such as natural forests or wetlands.
Denmark’s Green Tripartite Agreement includes three key elements that address these environmental challenges:
1) A Livestock Emissions TaxThe agreement includes a marginal tax on livestock emissions that exceed reduction targets. Pork and dairy producers will not pay taxes on 60% of average emissions per animal, so farmers can avoid taxes if they can cut their emissions by 40% of today’s average. But farms will pay about $40 per ton of emissions (carbon dioxide equivalent) above these average levels in 2030, which will rise to around $100 in 2035. Taxes at that rate provide a powerful incentive to reduce emissions to the target level. The revenue these taxes generate will go into a fund designed to help all producers reduce emissions.
2) Incentives to Reduce Nitrogen PollutionDenmark will pay farmers $100 per ton to reduce greenhouse gas emissions from nitrogen fertilization of farm fields, such as nitrous oxide. It intends to use funds from EU’s Common Agricultural Policy. Nitrogen use by the agricultural sector has been one of the leading causes of marine, freshwater and groundwater pollution and overall nature degradation in the EU.
3) Promote Biodiversity and Preserve and Sequester CarbonDenmark will restore 140,000 hectares of drained peatlands currently in agricultural use and establish 250,000 hectares of new forest by 2045. Overall, around 10% of Denmark’s land will be turned into valuable habitat in ways that either reduce carbon emissions or store it. Forest restoration will focus on native trees and those fields that leach the most nitrogen into coastal waters. To support this restoration, Denmark is establishing a new Green Area Fund with 40 billion Danish kroner ($6 billion).
Taken together, the policy is remarkably comprehensive — balancing agricultural production, emissions reductions and nature restoration — and is highly consistent with a WRI 2021 report that set a pathway for Danish agriculture to become carbon neutral and calling for precisely the type of social contract that has emerged.
Unlike some agricultural plans that exaggerate the potential to offset agricultural emissions through soil carbon sequestration on working agricultural lands, this plan focuses primarily on reducing actual agricultural emissions. And unlike a few countries that have turned grazing land into plantation forests to absorb carbon, the ambitious land area restoration will provide valuable habitat and target peatlands, which are the most carbon-valuable form of restoration.
The policy instruments are also generally structured to preserve Denmark’s climate-efficient agricultural production. The well-crafted tax on livestock gives farmers an incentive to increase the efficiency of their production rather than to reduce production.
Nitrogen pollution reductions are to be paid for by redirecting EU farm subsidies, which is a major step forward. A 2020 study by one of us found that almost no such payments have funded climate mitigation, and environment and research groups have long pushed for this kind of funding shift. The policy also includes more broadly worded commitments for necessary research and development, that seeks to create a level playing field for Danish agriculture through EU policy, and to maintain Denmark’s agricultural production.
The coastline of Bornholm in Denmark. The country's agriculture policy aims to prevent pollutants from reaching the sea, as well as restores peatlands, which is the most carbon-valuable form of restoration. Photo by CORTUUM /iStock. How Could Denmark’s Agriculture and Climate Policy Further Improve?Given the agreement’s high ambition, pointing out any shortcomings may seem unfair, but there are a couple of areas on which policy can build further. WRI’s report on Danish agriculture found that Denmark’s vast subsidies for biogas are cost-ineffective: extending biogas facilities to all of Denmark’s manure could require subsidies equal to the value of all Danish agriculture. Biogas plants have also been adding crops to manure to generate sufficient biogas, and we found that the climate costs of devoting land to these crops can wipe out any climate benefits from the biogas.
Denmark has fortunately scaled back its financing for new biogas facilities, although it is still considering a policy that would target more. As the country commits to reforesting significant amounts of agricultural land, it is even more important to ensure that the agricultural land now used for biogas returns to producing food. To the new policy’s credit, however, it identifies several promising, potentially cheaper, manure management technologies as priorities for trials.
The agreement also says little about mitigating Denmark’s contribution to global emissions and deforestation through its large imports of feed crops, particularly soybeans from Latin America. In its 2021 report, WRI encouraged Denmark to invest in projects to boost agricultural yields sufficiently in countries it imports from to avoid contributing to the expansion of agricultural land. For example, to prevent Danish demand for imported soybeans from leading to deforestation in Brazil, Denmark could invest in projects that direct Brazilian soybean cropland expansion into low-yielding pasture while improving the productivity of other pastures enough to make up for lost food production. Even so, the agreement makes a step in this direction by committing Denmark to encourage international efforts, which it can help achieve through the European Union.
Soybeans are harvested at Fartura Farm in Brazil. While Denmark's new agriculture policy focuses on national emissions, it does little to mitigate against its global contributions through its large imports of soybean imports from Latin America. Photo by paulo fridman/Alamy Stock Photo. What’s Next for Denmark’s Agriculture and Climate Policy?However impressive, Denmark’s Green Tripartite Agreement is just a start, and achieving its goals will be challenging. Three parts of that challenge are particularly worth following:
1) Denmark will need to choose the best practices and technologies that mitigate agricultural emissions, including the mitigation of livestock emissions or emissions from use of nitrogen on fields. Unlike energy emissions, which directly reflect the quantities and types of fossil fuels used, agricultural emissions cannot realistically be measured on each farm. Denmark therefore needs to develop sound estimates of the climate benefits of each agricultural technology or management practice and do so using farm information it can verify. This is a challenging task, and one that will evolve with new science over time.
Making these decisions will require more science. When WRI wrote the 2021 report on Danish agriculture, for example, we found that emissions estimates from manure storage facilities varied greatly. Truly addressing these emissions requires more reliable estimates, which could cost only a few million dollars to obtain. To implement its plan well, Denmark will have to spend the money to do the necessary science.
2) Improved technologies to mitigate agricultural emissions will be needed, and the 2021 report identified many with real promise. These range from wheat varieties that reduce nitrogen losses, to feed additives for cows to reduce methane, and even bolder ways of turning grasses into high quality feeds. The agreement specifically recognizes the need for more research and development and calls for new procedures to expedite this work, including for many research priorities identified in our report. Crafting these new procedures and obtaining this funding will be critical. Globally, such agricultural mitigation research has been extremely underfunded. Denmark has properly recognized the importance of enlisting other countries in such expanded research and development efforts as well.
3) Denmark will need to achieve these climate and nature goals without shifting its agricultural production to other countries and continents. Denmark’s livestock production is among the most climate-efficient in the world. For example, while it would be more climate-efficient for people to drink soy milk than cow’s milk, global dairy consumption is rising rapidly and will almost certainly continue to do so. Therefore, it’s better for Denmark to supply daily milk than to shift that production elsewhere in the world. The agreement appropriately recognizes that Denmark should avoid “offshoring its climate footprint” by reducing its food production. Maintaining food production while restoring forests and peatlands requires boosting yields on remaining agricultural land, which should also be a major focus of work going forward.
What Lessons Can Other Countries Take from Denmark?Denmark’s well-balanced policy shows other countries how they can take real action on agricultural emissions. As the policy explicitly recognizes, it will only be a true success if it encourages similar climate ambition for the European Union as a whole. That would also help ensure a level playing field for Danish agriculture and help prevent leakage of food production and its environmental impacts to other countries.
This policy also shows the power of setting ambitious climate targets. Denmark successfully brought together government, the agriculture industry and environmental groups into the Green Tripartite because each group recognized there would be no way to meet the country’s ambitious climate goals without strong efforts by the agriculture and land sector. As countries update their national climate commitments (known as nationally determined contributions or NDCs) in 2025, they should include agriculture-specific GHG reduction targets and incorporate additional agricultural mitigation measures.
Although the right mix of Produce-Protect-Reduce-Restore actions will vary by country and by region across the world, as the world looks to the 2026 UN climate summit (COP30) in Brazil, other countries would do well to learn from Denmark’s comprehensive policy and the solutions the country develops as it moves forward.
denmark-agriculture-policy-dairy-farming.jpg Food Denmark agriculture Climate climate policy pollution COP29 greenhouse gases Type Explainer Exclude From Blog Feed? 0 Authors Tim Searchinger Richard WaiteSTATEMENT: UK Releases Ambitious 2035 NDC, Putting Country on Path to Net Zero
BAKU (November 12, 2024) — The United Kingdom has announced it will cut its greenhouse gas emissions 81% by 2035 compared to 1990 levels as part of its national climate commitment under the Paris Agreement. This is consistent with the UK’s Climate Change Committee’s advice and the UK’s national Climate Act to reach net zero emissions by 2050.
Following is a statement from Stientje van Veldhoven, World Resources Institute’s Vice President and Regional Director for Europe:
“The United Kingdom’s new emissions reduction target is a shining example of climate leadership. Let's hope it will inspire other G20 economies to follow suit. The UK’s ambitious commitment to cut emissions 81% by 2035 sets the country on a path to achieve its net zero goal by 2050.
“Setting this target is a critical step, and the country will now need to strengthen its policies and ramp up its green investments if it is to deliver in full. We strongly encourage the UK government to complement its ambitious, economy-wide goal with bold, sector-specific goals for energy, transport, and land use and agriculture when it submits its new national climate commitment in early 2025. This would build on the recommendations from the Global Stocktake at COP28 and help deliver the country’s ambitious targets. Goals for specific sectors will offer the necessary detail to drive implementation, establish clear policies and send clear signals to the private sector both domestically and abroad.
“To advance its goals, the UK should continue to foster new jobs in the energy industries of the future, while making electricity cheaper and cleaner and providing more efficient and advanced zero-carbon technologies such as electric vehicles. The government should also work in partnership with farmers to support them to adopt low-carbon and other environmentally-friendly practices, and with the whole of society to protect and rewet peatlands and to advance the protection and restoration of nature."
Global Climate Pledges: A Progress Report
In the last few years, coalitions of countries, businesses, governments and other actors have announced increasingly ambitious commitments to address the climate crisis. These have included plans to dramatically ramp up renewables, phase down fossil fuels, green the financial sector, halt deforestation, reform food systems and agriculture, and more. A number of new pledges are expected to be unveiled at the current climate summit in Baku, such as those under the COP29 Presidency’s Action Agenda.
But are parties actually following through on their promises? Here, we track progress towards some of the world’s biggest collective climate commitments:
WRI’s experts are closely following the UN climate talks. Watch our Resource Hub for new articles, research, webinars and more.
EnergyWhat was promised?As part of the 2023 Global Stocktake, which took place at COP28 in Dubai, countries collectively agreed to transition away from fossil fuels in energy systems, accelerate the phase-down of unabated coal power, and, by 2030, triple the world’s renewable energy capacity and double global annual rates of energy efficiency improvement.
Also during COP28, Clean Energy Ministerial countries announced the launch of the Supercharging Battery Storage Initiative to enhance international cooperation, drive development and deployment of stationery battery storage, and reduce battery technology costs.
These promises built on previous commitments, such as 46 countries pledging to phase out unabated domestic coal and the Powering Past Coal Declaration, launched in 2017 to phase out existing unabated coal and place a moratorium on new coal without carbon capture and storage.
Where we standA recent IRENA report found that while renewable energy is the fastest-growing source of power capacity — gaining a record 473 gigawatts (GW) in 2023 — the world is at risk of missing its goal to triple renewables over the next seven years. Renewables capacity increased 14% in 2023; while unprecedented, this is lower than the 16.4% growth rate necessary for renewable energy to triple by 2030.
The IEA’s 2024 Energy Efficiency Report affirmed for both 2023 and 2024 that efficiency rates remained at a mere 1% improvement per year. When the doubling energy efficiency goal was set, rates were estimated at 2%, so hitting the doubling goal requires an annual improvement of 4% globally.
Similarly, an October 2024 report from IRENA and the COP28 Presidency found that “across almost all metrics — excepting solar PV capacity growth — the world has fallen further behind” on goals to triple renewables and double energy efficiency. For instance, improvement in energy intensity in 2022 was around 2% — about half the rate needed by 2030 to meet the goal set at COP28.
Meanwhile, investments in energy storage are increasing rapidly, growing more than nine-fold between 2020 and 2024. The IEA finds these investments need to grow 25% each year, among other efforts to enhance storage capacity.
The latest UNEP Emissions Gap report also reveals that the shift towards renewable energy and electrification isn’t happening fast enough. Per the report, “none of the major fossil fuel-producing countries or companies have committed to … fully transition away from fossil fuel extraction or production.” According to IISD, the global oil and gas exploration licenses awarded by governments between late 2023 and late 2024 could lead to an estimated 2 billion tonnes of CO2 emissions over the lifetime of the projects.
One bright spot came in October 2024 when the United Kingdom officially closed its last coal-fired power plant, marking the end of 142 years of coal-generated electricity in the country. However, in data through 2022, coal remains responsible for more than a third of electricity generation globally; progress needs to increase seven-fold to reach near zero by 2030 and align the power system with Paris Agreement goals.
Halting Forest LossWhat was promised?The nexus of forests and climate has garnered significant attention over the last few years. At COP26 in 2021, more than 140 countries (representing over 85% of the world’s forest) signed onto the Glasgow Leaders’ Declaration on Forests, which commits to halt and reverse forest loss and land degradation by 2030.
In 2022, 196 nations agreed through the UN Convention on Biological Diversity (CBD) on 23 targets for 2030, including restoring 30% of all degraded ecosystems and conserving 30% of land, water and seas.
Where we standDeforestation continues to get worse, with few signs of slowing. According to WRI’s Global Forest Review, the rate of global forest loss today is higher than it was in 2021. The world needs to make a dramatic U-turn to achieve the Glasgow Leaders’ Declaration goals by the end of the decade.
Meanwhile, the world has taken a few steps towards the 30% restoration and conservation targets, especially when it comes to finance. A year after the Glasgow Leaders’ Declaration was made, 26 countries and the EU came together to form the Forest and Climate Leaders’ Partnership (FCLP) to help deliver its commitments. In 2023, the FCLP announced nearly $250 million in finance from public, private and civil society partners to reach conservation and restoration goals, with calls to mobilize new financial commitments post-2025 to secure forest tenure rights.
Additionally, President Lula of Brazil proposed the Tropical Forest Finance Facility (TFFF), which would provide 80 countries with annual payments for restoring and conserving tropical forests. This was backed by five countries at the recent UN biodiversity summit (COP16) in October 2024. Also at COP16, governments launched the Kunming Biodiversity Fund with a $200 million contribution from China, and several countries put forth national nature finance plans.
Yet the gap between conservation today and what’s needed to hit the 30% target remains wide: A recent progress report found that over 17% of the world's land area and a mere 8% of marine and coastal areas are currently protected. Countries must collectively protect another 16.7 million square kilometers of land (an area nearly the size of Russia) and over 78 million square kilometers of marine and coastal areas (more than twice the size of Africa) by 2030.
Greening the Financial SectorWhat was promised?In early 2021, the Glasgow Financial Alliance for Net Zero (GFANZ) formed to push the financial sector to reach net-zero emissions. More than 450 financial institutions representing $130 trillion in assets under management joined, with groups forming for insurance, asset owners, asset managers, banks and other financial sectors.
At COP26 in Glasgow in 2021, countries also agreed to phase out inefficient fossil fuel subsidies, a commitment reiterated at COP28.
Where we standWhile financial institutions have made some progress in setting emissions-reduction targets, developing low-carbon transition plans and improving their climate disclosures they haven’t lived up to their stated ambitions.
A WRI study examining two dozen top banks found that none of their “net-zero plans” would actually achieve net-zero emissions. Their pledges also haven’t resulted in the massive increase in private finance needed to achieve net zero.
Additionally, increased political challenges to climate action, renewable energy and sustainable investing, particularly in the U.S., have pushed many financial actors to scale back their net-zero commitments or drop out of net-zero alliances.
In 2022, U.S.-based Vanguard — the world’s second-largest asset manager — left GFANZ’s Net-Zero Assets Managers initiative, which experts in sustainable finance attributed to political pressure. In 2023, several major insurers withdrew from the Net-Zero Insurance Alliance, reportedly due to antitrust concerns. And in 2024, the leader of the world’s biggest asset manager, BlackRock, omitted ESG from his annual letter to shareholders.
Political concerns may also cause signatories to be more reluctant in demanding specific actions and tougher requirements, which significantly blunts GFANZ’s ability to have financial institutions set and adhere to bold climate commitments. This is a worrying development, as government action is necessary to complement sustainable investing.
Meanwhile, pledges to phase out inefficient fossil fuel subsidies have been frequently reiterated but never delivered. A WTO working group continues to meet, and G7 finance ministers brought their own commitment in line with the UNFCCC's definition of inefficiency. In December 2023, a coalition of dozens of countries formed to study their fossil fuel subsidies with the goal of getting rid of them. Nonetheless, countries generally continue to employ fossil fuel subsidies at scale; the EU, for example, spends more on such subsidies now than it did in 2015, when the bloc pledged to phase them out by 2025. Between 2020 and 2022, explicit fossil fuel subsidies more than doubled globally, reaching an all-time high of $1.3 trillion.
Transforming Food SystemsWhat was promised?Food systems took center stage at COP28 in 2023, with a series of major announcements. Most significantly, 162 world leaders signed the COP28 UAE Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action, committing countries to integrate food systems and agriculture into their national climate plans, or NDCs – among other national plans and strategies – by COP30 in November 2025.
Additionally, the Alliance of Champions for Food Systems Transformation (ACF) was launched, with five countries – Brazil, Cambodia, Norway, Rwanda and Sierra Leone – committing to act urgently and together to close the ambition and implementation gaps on food system reform. ACF members have pledged to take a whole-government approach and “go further and faster” by driving progress across 10 action areas in their national policies.
Where we standThere have been encouraging signs of action in the food and land use sector in the past year, but much more is needed to turn promises into reality.
According to the Technical Cooperation Collaborative, around 40 countries are engaging in national policy work and initiatives in line with the COP28 Declaration. Nations such as Cambodia, Norway and Sierra Leone have taken steps to integrate the ACF’s 10 priority action areas into their food and agriculture policies, with Sierra Leone securing $100 million in funding from the African Development Bank earlier this year to deliver “transformative and ambitious” action on food systems.
Meanwhile, there have been new investments made globally in improving livestock production, reducing food loss and waste, developing alternative proteins and more.
As of November 2024, over 300 entities have endorsed the Food Systems Call to Action, including farmer organizations, subnational governments and businesses. One hundred and fifty civil society and philanthropic organizations operating in all regions of the world, of which a third are headquartered in emerging and developing countries, have endorsed the Call to Action and are working to implement its recommendations.
Over the next 12 months, it's vital to strengthen national climate and biodiversity plans with integrated policies, boost investment in food systems and nature, and ensure full, effective participation of farmers, Indigenous Peoples and local communities.
Accelerating Urban Climate ActionWhat was promised?
COP28 was a major moment for cities and other subnational actors. At the first Local Climate Action Summit, 70 countries committed to incorporate urban climate action into their national climate commitments through the Coalition for High Ambition Multi-Level Partnerships (CHAMP) for Climate Action.
Where we standMomentum has continued to build since COP28, with Finland and the United Kingdom recently endorsing CHAMP. The COP29 Presidency has expressed its commitment to emphasize subnational engagement in Baku, most notably through the forthcoming COP29 Multisectoral Actions Pathways (MAP) Declaration for Resilient and Healthy Cities.
However, there is still a long way to go to unlock the full potential of subnational climate action. Analysis by UN Habitat concludes that only 27% of current NDCs contain strong urban initiatives. According to the Data-Driven EnviroLab, just 7% of G20 cities and regions have at least one target that aligns with the global goal to limit global warming to 1.5 degrees C (2.7 degrees F). Roughly 60% are failing to deliver emissions reductions at the pace required to achieve their own targets, let alone the 1.5 degree C goal.
As national governments develop their next round of NDCs in 2025, they should closely collaborate with subnational governments to boost ambition and implementation of climate action.
Shifting to Low-Carbon TransportWhat was promised?At COP26, more than 100 signatories (including countries, subnational governments and major businesses) agreed to advance efforts for all new cars and vans to be zero emissions globally by 2040. At COP27, 10 countries signed an agreement that they would sell only zero-emission medium- and heavy-duty vehicles by 2040. COP28 built on these commitments, with countries agreeing to accelerate the “reduction of emissions from road transport” through a variety of pathways, including infrastructure and zero- or low-emission vehicles.
Where we standEstimates show that to hold global temperature rise to 1.5 degrees C, electric car sales need to increase from 10% of sales in 2021 to over 85% by 2030, public buses from 4% to 60%, and two- and three-wheelers from nearly half of sales now to 85%. The good news is that sales for electric cars appear to be on track for the first time; however, the world remains off track in meeting goals for buses and freight vehicles.
Some countries have delivered policies and finance to back up their commitments. For example, the U.S. 2022 Inflation Reduction Act included several measures to promote electric vehicles, including consumer tax credits for new and used electric light duty and freight vehicles and tax incentives for battery manufacturing. In addition, the Bipartisan Infrastructure Law included funding to create a national EV charging network, while California and 12 other states have adopted regulations to require 100% zero-emission vehicle sales from 2035. There is some uncertainty on these national policies since the 2024 U.S. election, however.
On the other side of the Atlantic, The E.U. adopted ambitious goals for reducing emissions of medium- and heavy-duty vehicles, requiring a 45% reduction by 2030 and 65% reduction by 2035. In addition, 26 new signatories have signed on to the global agreement on medium- and heavy-duty vehicles in 2024. Still, much progress remains to be seen, particularly for low- and middle-income countries.
Lastly, while pledges have spurred vehicle electrification, meeting the wider goals of decarbonizing the transport sector remains challenging. A quantified emissions-reduction target for the entire transportation sector and explicit inclusion in the new NDCs would be instrumental for making progress.
Curbing Methane and Other Super PollutantsWhat was promised?Super pollutants such as methane, hydrofluorocarbons (HFCs), black carbon, nitrous oxide and ground-level ozone are responsible for about half of the global temperature rise to date due to their short-term potency in warming the atmosphere. Methane, for example, has a global warming potential 80 times greater than carbon dioxide over a 20-year period. Removing these non-CO2 GHGs and particulate matter from the atmosphere could prevent up to 0.6 degrees C of global temperature rise by 2050, as well as millions of premature deaths each year.
Since 2021, 158 countries have signed on to the Global Methane Pledge to reduce methane emissions by 30% (compared to 2020 levels) by 2030.
Meanwhile, countries agreed through the Global Stocktake to accelerate their reductions of non-CO2 emissions in their next NDCs. In 2024, 70 countries committed to include economy-wide, 1.5-degrees C-aligned emissions-reduction targets for all GHGs in their NDCs, noting that action to reduce super pollutants is one of the fastest and cheapest ways to limit global warming.
Where we standDespite strong support for the Global Methane Pledge, methane emissions from the energy sector measured at near-record highs in 2023. The atmospheric concentration of nitrous oxide, the third-most significant human-caused greenhouse gas after methane and CO2, also continued to climb in 2023 — mostly due to the use of fertilizers and other agricultural practices.
More encouragingly, new grant funding totaling $1 billion for methane action has been pledged in the last year to support initiatives like the World Bank’s Global Flaring and Methane Reduction Partnership, aimed at reducing methane leaks from oil and gas supply chains, and the Enteric Fermentation Accelerator for Livestock Methane Mitigation Research. Three methane satellite detection and notification initiatives also emerged — the International Methane Emissions Observatory, MethaneSAT and CarbonMapper — which use remote-sensing to bring greater transparency and accountability to methane-emitting industries.
During COP29 in Baku, the U.S., China and Azerbaijan are slated to host a second Summit on Methane and Non-CO2 Greenhouse Gases, where more announcements are expected.
Turning Pledges into RealityIn sum, while these varied pledges are strides towards addressing the climate crisis, efforts are largely off-track to fully deliver on them. WRI research shows that such global pledges and similar cooperative initiatives need to evolve from loose knowledge-sharing networks into platforms of true accountability and action.
With the COP29 Presidency set to launch a number of new pledges and initiatives, it is a reminder of the need to strengthen mechanisms that hold members accountable and ratchet up ambition to reflect the scale of the climate challenge. Transforming intentions into measurable, inclusive actions requires those involved to regularly prove their mettle by transparently and regularly demonstrating progress. In the global climate fight, we need coalitions to be credible forces for change.
wind-turbine.jpg Climate NDC COP29 Energy Forests Finance climate finance National Climate Action transportation pollution Cities Urban Efficiency & Climate Urban Mobility Featured Popular Type Commentary Exclude From Blog Feed? 0 Projects Authors Nathan Cogswell Anderson Lee Michael Doust Max Jamieson Rod Taylor Beth Elliott Ben Welle Klara Nilsson Edward Davey Katie McCoshan Gaia Larsen Schuyler Null Hayden HigginsHow Rethinking ‘What Is a Forest’ Can Result in More Effective Conservation
Although intuitively it may seem obvious what a forest is, there are actually hundreds of definitions used by different countries and organizations throughout the world. This can have major implications for how forests — and more importantly, changes to forests — are measured.
Without a common and standardized way to define “what is a forest?” it is impossible to consistently track global deforestation. Many countries now use satellite data for this tracking because it provides more timely, accurate and efficient information. But most existing forest definitions do not align with what satellites can actually measure. This makes it challenging for countries and organizations to use satellite data to comply with deforestation regulations or participate in carbon markets.
Monitoring forests and deforestation with satellite data is critical to accurately and consistently implementing and evaluating the success of forest conservation policies, but to do so we must rethink how forests and deforestation are defined.
Trees dot the landscape of a savanna in Tanzania, Africa. Under the UN's Food and Agriculture Organization's definition, sparsely-treed areas, like savannas, could be defined as a forest. Photo by incamerastock / Alamy Stock Photo. 3 Issues That Limit Existing Forest DefinitionsA few key issues limit the ability of countries, organizations and others to monitor forest change and consistently track global deforestation:
1) Inconsistent Definitions Lead to Inconsistent Deforestation EstimatesThe first issue with existing forest definitions is that there are too many of them. Nearly three decades ago, the Food and Agriculture Organization of the United Nations (FAO) defined forests as having a minimum of 0.5-hectare area (a hectare is equivalent to 10,000 square meters or about 2.5 acres), 10% canopy cover and 5-meter (16.4-feet) tree height. Countries were encouraged to adopt this definition, but FAO pushed for “harmonization, not standardization.” As a result, definitions can vary widely across organizations and countries and can even vary within a single country.
For example, Indonesia’s definition includes a minimum area threshold of 6.25 hectares while Côte D’Ivoire in West Africa uses 0.1 hectares, so all else being equal, an area in Indonesia must be at least 62.5 times as large as an area in Côte d’Ivoire to qualify as forest. Brazil’s official forest definition has a minimum area of 0.5 hectares, but an area doesn’t count as deforestation in their National Forest Reference Emission Level submission to the UN’s Framework Convention on Climate Change until it reaches twice that, or 1 hectare.
Land use is another complication. Many countries, like Canada, include timber and rubber plantations as forests, so replacing clearcut trees in natural ecosystems with a commercial plantation is not defined as deforestation because the land remains a working forest. Areas with trees considered agricultural crops, like almonds and apples, are generally not counted as forests, but areas with trees growing alongside row crops may be, like cocoa agroforestry systems.
These inconsistencies greatly affect what counts as forest and deforestation in different corners of the world. Unlike currency, there’s no international exchange rate to convert forest area reported by one country into an equivalent area using another country’s definition. The result is a smorgasbord of different forest and deforestation estimates that aren’t comparable to each other or to a globally consistent measure like satellite data, because they depend on who’s doing the counting and which rulebook is being followed.
2) Prioritizing Measuring Forests Over DeforestationWhat if all countries applied the same forest definition? Problem solved? Not quite.
Even if FAO’s definition were applied across all countries, the thresholds chosen for area, canopy cover and height have important tradeoffs that matter for forest conservation. Under FAO’s definition, sparsely-treed areas, like savannas, could be considered forests. This has allowed for these ecosystems, which are home to iconic wildlife, help prevent desertification and support local communities, to be included in forest conservation frameworks.
But the flip side of applying an overly inclusive forest definition is that it may obscure the loss of high priority tall forests with dense tree canopies. These forests store the most carbon, harbor the greatest biodiversity and play the most crucial role in global climate regulation.
For example, a 0.5-hectare patch of dense forest could lose up to 90% of its tree cover and still be counted as a forest, since it would continue to exceed FAO’s minimum 10% canopy cover threshold. This wouldn’t be much of an issue if most deforestation occurred at a larger scale. But in many places throughout the world, deforestation occurs at small scales that fall within this 0.5-hectare minimum threshold.
For example, in the Democratic Republic of Congo, where subsistence agriculture — or the practice where people clear small patches of forest to grow food primarily to meet their own needs — is common, satellite data reveals that over 20% of the country’s 2023 primary forest loss occurred in patches smaller than 0.5 hectares. This is a significant area: The country had the second highest annual rate of primary forest loss in the world over the past two decades.
Those small patches of forest loss add up and risk being omitted from the global deforestation record when definitions prioritize the measurement of forest area over deforestation.
3) Lack of Alignment with Satellite DataThe third issue with many forest definitions is that they’re a relic from a time before satellites, when foresters went out on foot to measure forest attributes like how much timber could be sold and tree species in permanent inventory plots.
Forest inventories created through fieldwork remain essential in providing today’s forest managers with vital information that satellites can’t about how forests’ many ecological, economic and social functions are changing. Yet when it comes to monitoring deforestation — the loss of forest area — scientists have shown that it can be tracked with higher accuracy and lower costs than ever before using satellite data. Crucially, this data is free and openly accessible through platforms like Global Forest Watch.
But the definitions originally designed to monitor forests on the ground just don’t work with data collected from satellites. One reason is that satellites commonly used for operational forest monitoring capture information in different sizes that don’t perfectly align with the 0.5-hectare minimum size commonly used in many forest definitions. Further, by using a 0.5-hectare minimum size for forest mapping, the level of detail in the satellite data is reduced, effectively "blurring" the finer information. Forcing a 0.5-hectare minimum forest area threshold onto a satellite image can result in forest and deforestation measurements that are 5 to 50 times less precise than if the satellites’ original pixel size was retained.
How Do Definitions Impact Policy?The inconsistencies in forest definitions for countries and organizations using satellite data create challenges when complying with conservation efforts that require the reporting of deforestation across many sites and countries.
For example, companies trading in products that fall under the European Union’s Deforestation Regulation (EUDR) may need to comply with the EU’s laws following one forest definition and with national environmental laws following a different definition.
Further, even though the regulation requires that companies provide geotagged evidence that certain commodities were not produced on deforested or degraded land after 2020, in reality this is difficult and inefficient to prove with satellite data because the EUDR’s forest definition isn’t designed to work with satellite data.
Another example is carbon credits, which are designed to reduce carbon emissions from deforestation.
For a carbon market to function, carbon credits must be fungible, or mutually interchangeable, such that an emission reduction credit can be used to offset an emission elsewhere. But when both the area of forests and the amount of deforestation are measured differently across different locations, the quantity of credits generated by reducing emissions from deforestation may vary depending on where they originate, potentially eroding buyers’ trust in the system. It therefore becomes impossible to evaluate consistently across jurisdictions or against global data sets whether deforestation has declined.
Toward Consistent Measurements of Forests and DeforestationPhilosophical debates about “what is a forest?” will always endure, but the urgency to conserve forests and cut carbon emissions has never been greater. Timely, accurate and efficient monitoring is key to evaluating the success of forest conservation and emissions reductions policies.
We need a pragmatic approach to deforestation monitoring that balances the ecological value of forests with technical monitoring requirements. Internationally coordinated conservation action requires internationally coordinated monitoring systems. Though absolute consistency is not necessarily the goal, nor would it be realistic, standardizing key elements of forest definitions would go a long way to achieving this:
- Definitions of forest extent and change should have standardized minimum area thresholds that align with public satellite data capabilities (10 to 30 meters or 33 to 98 feet)
- Forest definitions should distinguish between natural forests and other types of tree cover, thereby excluding plantations of wood or other agricultural products.
Reducing the minimum area threshold in forest definitions doesn’t mean that every pixel with trees will be considered a forest. Pixels can be assigned to different categories to differentiate between types of tree cover — such as trees in primary forests versus secondary forests, or trees in dense forests versus areas with sparse trees — and use that information to determine what counts as a forest in different contexts.
Likewise, not every pixel with tree loss counts as deforestation. For example, trees lost to natural disturbances like storms or landslides aren’t considered deforestation.
All these distinctions can be made either by using maps that show additional contextual information, or using sampling methodologies, where analysts can carefully look at individual pixels to determine which category they belong to.
It is time to rethink forest definitions so that forests and deforestation are quantified consistently and reliably enough to evaluate whether global forest conservation outcomes have been achieved. When the policy community asks, “is deforestation going up or down?” an acceptable answer can no longer be, “it depends."
forest-monitoring-definition-villagers.jpg Forests global forest watch deforestation forest monitoring international climate policy Type Commentary Exclude From Blog Feed? 0 Projects Authors Viviana Zalles Nancy Harris Fred Stolle Matthew C. HansenChina Is Providing Billions in Climate Finance to Developing Countries
The climate crisis is escalating at an alarming rate, causing devastation around the world — especially in countries that contribute little to the world’s greenhouse gas emissions.
Coping with climate impacts and investing in the transition to a low-carbon, climate-resilient future present special challenges for developing countries. Global climate goals can’t be reached unless developing countries are part of the effort, too — but given their reduced responsibility and resources, they need and deserve help from the global community. This is especially true for the poorest and most vulnerable countries.
Very soon, world leaders will have a chance to show their resolve to meet this need. The main agenda item for COP29 is adopting a new global climate finance target. This new collective quantified goal, or NCQG, would replace the goal set in 2009 for developed countries to mobilize $100 billion a year, from 2020 to 2025, for climate action in developing countries. A new target, with increased financial support for developing countries, should enable their ambitious investment in climate mitigation and adaptation.
The NCQG has its share of complications, however. One of the most hotly contested topics is the role that emerging economies like China should play. China remains a developing country according to UN classifications, but it has grown impressively in recent years — and its emissions have risen along with it. Many developed countries argue that such rapidly growing economies should be required to contribute to the NCQG. Developing countries have had no obligation to contribute to the $100 billion goal, but many have been doing so voluntarily — including China, a fact that has often been overlooked.
The upcoming NCQG negotiations should be founded on a clear understanding of the climate finance that’s already flowing, including from China and other non-traditional donors. However, little official reporting on developing countries’ voluntary activities is available.
To help address this challenge, new research from WRI presents a fuller picture of the climate finance China has been providing and mobilizing to support other developing countries’ climate actions. We estimate that China’s climate finance provision averaged close to $4.5 billion per year between 2013 and 2022. Our research also highlights how China’s contribution compares to existing efforts, details the channels through which its finance flows and sheds light on the pieces of the larger climate finance puzzle that are still missing.
China Is a Significant Climate Finance ProviderTo date, China’s contributions have been a blind spot in the climate finance discussion. Little data is available, and unofficial disclosures often show only partial glimpses of the picture because many estimates only consider a single type of financing, like bilateral or multilateral. What’s more, those frameworks typically don’t facilitate a useful “apples-to-apples” comparison with other countries’ financing.
Our research presents one of the first analyses to allow face-value comparisons of climate finance mobilized by China and developed countries. To foster greater comparability, we adopted the most widely used framework on climate finance, borrowing the methodology that the Organisation for Economic Co-operation and Development (OECD) uses to assess developed countries’ progress towards the $100 billion goal. (This method counts all types of finance in the same way, regardless of its terms. For instance, grants and concessional finance, with interest rates or repayment periods that are friendlier than what is available on the open market, are valued equally with market-rate loans.)
Our estimate shows that the climate finance flowing from China to other developing countries, via four distinct channels, amounted to just below $45 billion between 2013 and 2022. That equals 6.1% of the total climate finance developed countries provided during the same period.
What do these new findings mean for China’s “fair share” contribution to global climate finance? Neither the data nor existing United Nations Framework Convention on Climate Change agreements provide unequivocal answers about who should pay what. Moral and technical choices need to be considered, and could be informed by different scenarios reflecting on countries’ historic responsibility and capacity to pay.
Estimates based on historical emissions and income offer an idea of efforts proportional to China’s role. (One analysis by Center for Global Development, for example, calculated its responsibility to be between 3.4 % to 6 % of international climate finance.) But our interest doesn’t lie in a definite answer on China’s fair share. Instead, we aim to spotlight China as a significant climate finance provider and acknowledge that China and other emerging economies’ voluntary climate finance contributions could better inform the NCQG process in the leadup to COP29 and beyond.
How China Is Funding Climate Action in Developing CountriesHow does money move from China to developing countries’ climate projects? The OECD methodology we used in our analysis breaks its contributions into four categories:
- Bilateral public, provided by China’s development finance agencies and institutions
- Multilateral public, provided through multilateral development banks and climate funds
- Export credits, provided by China’s official export credit agencies like China EXIM and SINOSURE
- Private finance, mobilized by China’s development financial institutions or guarantors
Both China and conventional contributors channel over 70% of their climate finance through bilateral and multilateral public mechanisms. But whereas developed countries rarely deploy export credits in their climate finance — they make up only 3% of their contributions, on average — export credits account for more than a quarter of China’s climate finance.
The inclusion of export credits (as well as mobilized private finance) in climate and development finance is a topic of ongoing debate. Some argue that these financial instruments do not necessarily represent additional resources for climate action and can even potentially exacerbate debt burdens in developing countries. However, export credits have frequently supported large infrastructure projects, which could help fill developing countries’ funding gap in meeting climate and other development goals. Notably, some conventional contributors like Japan and Italy increased their development finance through export credits between 2009 and 2018. We need further examination and deliberation to address the role of export credits in climate finance and China should be part of these essential, collective efforts.
Missing Puzzle PiecesLike conventional climate finance contributors, China’s climate finance flows through a complex and interwoven architecture. Governmental agencies responsible for financial decisions related to climate include environmental, economic and aid ministries as well as financial regulators; they may also rely on implementors, in and outside of China, to identify opportunities and channel the funding. Developing countries must navigate this complex web to access the climate finance China can provide. This makes it hard for participants and observers to know exactly what’s going on.
Key government agencies in China's climate finance architectureAgencyRoleCategoryChina International Development Cooperation AgencyManages and coordinates China’s foreign aid with other ministriesBilateral publicMOFFunds China’s foreign aid and other bilateral financeBilateral publicPBC and SAFEFunds bilateral public financeBilateral publicChina EXIMProvides concessional loans and sponsors overseas investment fundsBilateral publicCDBManages special overseas lending and sponsors overseas investment fundsBilateral publicMOFFunds multilateral financeMultilateral publicPBC and SAFEFunds multilateral financeMultilateral publicChina EXIMFunds multilateral financeMultilateral publicChina EXIMProvides export creditsExport creditsSINOSUREProvides guarantee and insuranceExport creditsChina EXIMProvides loansMobilized privateCDBProvides loansMobilized privateSINOSUREProvides guarantee and insuranceMobilized privateExternal actors trying to count climate finance also find it hard to do so in a comprehensive way. Due to the conservative approach we took in our research, in addition to the limited publicly available information, China’s nominal climate finance contributions are likely much higher than we estimated.
For instance, since 2013, China has established several overseas investment funds and lending programs to support projects in areas including climate change, agriculture, food security and development. But since these fund managers disclose very little on how funding is allocated across these priority areas, we couldn’t identify or quantify the climate elements of that $140 billion in funding.
Our calculations also under-captured the amount of private finance China has mobilized. Using the current OECD framework, private finance can be attributed to Chinese official actors, but very little qualitative information on such arrangements is available. Estimates show that at least 10% of China’s total overseas lending was enabled through the state-owned export credit insurance corporation, SINOSURE, and we know that CDB and EXIM China are the two largest Chinese lenders on renewable energy projects abroad. But, in our research, we could only confidently attribute 15 projects as mobilized by China, which we recognize is an underestimate.
Greater transparency on China’s part would enable a more consistent and comparable evaluation of China’s role in climate finance that, in turn, would facilitate climate finance negotiations and provide greater clarity for those seeking to access climate finance. Greater transparency could also motivate required contributors to ramp up their commitments to climate finance. Finally, transparency could provide leadership to other voluntary contributors on how they can report their own climate finance, giving a clearer picture of the whole landscape.
Toward the New Global Finance TargetAcknowledging that China is already a significant, voluntary contributor to climate finance could make developed countries more comfortable increasing their own contributions, and ultimately facilitate negotiations for larger collective climate finance commitments. The discussions could also be better informed by evaluating countries’ responsibility for climate change and capacity to pay.
A robust climate finance goal agreed upon at COP29 should include a roadmap for improving the consistency and quality of climate finance reporting. The existing framework and practices governing mandatory reporting need to be reformed to provide a clearer picture of the quantity and type of finance available and to better hold countries accountable for fulfilling their climate finance commitments. China should be part of this global effort to enhance transparency and coherence — a move that will help the country overcome the siloed structure of its domestic international development governance and facilitate better communication of its efforts.
Whichever direction negotiations on climate finance take, all countries have a shared interest in the ultimate goal of ensuring sufficient finance for developing nations to achieve an inclusive, low-carbon, climate-resilient future. Cracking the code of how emerging economies — including China — should contribute will play an important role in achieving this shared outcome.
china-climate-finance.jpg Finance climate finance Climate Finance COP29 Type Commentary Exclude From Blog Feed? 0 Authors Shuang Liu Lihuan Zhou Chris Qihan Zou Yan Wang Ziyi MaRELEASE: High Ambition Coalition for Nature & People Wins 2024 Earthshot Prize
CAPE TOWN, (November 6, 2024) — Today, at The Earthshot Prize Awards ceremony in Cape Town, South Africa, Prince William named the High Ambition Coalition for Nature & People (HAC for N&P) the winner of The Earthshot Prize in the “Revive our Oceans” category. During the ceremony, the HAC for N&P was one of five chosen from nearly 2,500 nominees and 15 finalists and awarded a catalytic £1 million prize to help scale its solutions and accelerate its growth and impact.
Co-hosted by World Resources Institute (WRI) and the Global Environment Facility (GEF), the HAC for N&P, now comprising 120 countries, was recognized for its work on pushing governments to commit and act to protect 30% of the world’s land and oceans by 2030.
Co-chaired by Costa Rica and France, with the UK as its oceans champion, the HAC for N&P played a pivotal role in securing this agreement, also known as the 30x30 target, at COP15 (United Nations Convention on Biological Diversity) in 2022. Currently, only 17% of the world’s land and 8% of its oceans are protected. HAC for N&P is now working to help governments go beyond their pledges, pushing for these commitments to be written into law, sustaining political momentum, and addressing financial and technical barriers to action.
“With ocean conservation currently lagging behind land protection, we are grateful to the Earthshot Prize for highlighting the urgency of HAC for N&P’s bold but essential mission for this decade,” said Ani Dasgupta, President and CEO, World Resources Institute. “Like our ocean, the HAC for N&P connects people and nations across continents. We thank the Earthshot Prize for recognizing the importance of coming together to build a safe, prosperous and inclusive world where the climate is stable and nature is revitalized.”
The annual Earthshot Prize, founded by Prince William and The Royal Foundation, awards inspiring and innovative solutions to the world’s most pressing environmental challenges. Each year, it awards £1 million each to five initiatives, enabling them to scale efforts that repair the planet, enhance biodiversity, and promote sustainability.
“Receiving this award is not just an honor, it’s a call to action,” said Rita Maria El Zaghloul, Director of the HAC for N&P Secretariat. “We must now accelerate efforts to ensure governments fulfill their commitments to vastly expand and improve protected areas and conservation measures, stop illegal land grabs, prevent resource extraction, and end illegal overfishing. We’ll also engage with leaders at the highest levels to keep 30x30 a global priority.”
About the High Ambition Coalition for Nature & People (HAC for N&P)
HAC for N&P is an intergovernmental group of 120 countries united by a shared ambition to implement the global goal of effectively conserving and managing at least 30 percent of the world’s land and ocean by 2030. The HAC for N&P is co-chaired by Costa Rica and France with the UK as Ocean Champion.
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 people’s essential needs; to protect and restore nature; and to stabilize the climate and build resilient communities. We aim to fundamentally transform the way the world produces and uses food and energy and designs its cities to create a better future for all. Founded in 1982, WRI has nearly 2,000 staff around the world, with country offices in Brazil, China, Colombia, India, Indonesia, Mexico and the United States and regional offices in Africa and Europe.
ADVISORY: Post-US Election Press Call Featuring Leading Global and US Climate Leaders
WASHINGTON (November 6, 2024) – World Resource Institute (WRI) will host a press call featuring Gina McCarthy, Jonathan Pershing and Dan Lashof to discuss the implications of Donald Trump’s election victory for climate action, both in the United States and internationally.
The diverse group of experts will explore how Trump’s election victory will influence the global climate agenda, including the COP29 climate summit, the Paris Agreement and national commitments of other countries. They will also address the opportunities and challenges of advancing climate action and the clean energy transition at federal, state and local levels in the U.S. You can read WRI’s Statement on the U.S. election here.
Following brief remarks, ample time will be provided for questions from the media.
WHAT
Press call on the implications the U.S. presidential election on global and U.S. climate action.
WHEN
November 7, 2024, at 10:00am ET / 4:00pm CET
WHO
- Gina McCarthy, Managing Co-Chair, America Is All In, Former White House National Climate Advisor, Former Administrator, U.S. Environmental Protection Agency (EPA)
- Jonathan Pershing, Program Director of Environment, William and Flora Hewlett Foundation
- Dan Lashof, Director, World Resources Institute, United States
- Alison Cinnamond (moderator), Global Director for Strategic Communications, World Resources Institute
WHERE
Please RSVP at this link for the Zoom webinar. This call is open to journalists only.
STATEMENT: Climate Action Faces a Setback with Trump’s Second Term; Momentum for Clean Energy Transition to Continue
WASHINGTON (November 6, 2024) — The Associated Press has declared Donald J. Trump and JD Vance the winners of the 2024 U.S. presidential election. Republicans won the majority in the U.S. Senate while control of the U.S. House of Representatives is yet to be determined.
Following is a statement by Dan Lashof, U.S. Director, World Resources Institute:
“There is no denying that another Trump presidency will stall national efforts to tackle the climate crisis and protect the environment, but most U.S. state, local, and private sector leaders are committed to charging ahead. And you can count on a chorus of world leaders confirming that they won’t turn their back on climate and nature goals.
“Donald Trump heading back to the White House won’t be a death knell to the clean energy transition that has rapidly picked up pace these last four years. Both Republican-led and Democratic-led states are seeing the benefits of wind, solar, and battery manufacturing and deployment thanks to the billions of dollars of investments unleashed by the Bipartisan Infrastructure Law and the Inflation Reduction Act. Governors and representatives in Congress on both sides of the aisle have come to recognize that clean energy is a huge moneymaker and a job creator. President Trump will face a bipartisan wall of opposition if he attempts to rip away clean energy incentives now.
“From Appalachia to the Gulf Coast to the Mountain West, Americans are reeling from devastating climate-fueled disasters. Turning a blind eye to the climate crisis that is costing billions of dollars in damage and killing hundreds of people would be irresponsible and immoral. Polls show most Americans want the federal government to take action to address climate change and protect the air we breathe and the water we drink. President Trump has a responsibility to heed their calls with not just rhetoric, but real policies that improve Americans' lives.
“Trump has every reason to build on transformations already underway. Electrifying buildings and transportation — including school buses — benefits rural and urban communities alike by cutting costs and improving efficiency. At the same time, America’s croplands, wetlands and forests desperately need more investments to protect them from intensifying wildfires, droughts and flooding.
“While President Trump may retreat, leaders from states, cities, businesses and elsewhere will eagerly step into the breach to take forward ambitious climate action. Thanks to the generous tax incentives and investments from the Inflation Reduction Act and Bipartisan Infrastructure Law, subnational actors have more resources than ever to cut emissions, expand clean energy and electric transportation and address environmental injustices.
“There are important bipartisan opportunities to advance climate action that must be seized upon. For instance, leaders on both sides of the aisle support climate-smart trade policies and harnessing the power of geothermal energy. And there is bipartisan and business support for decarbonizing heavy industry and investing in international supply chains to keep the U.S. competitive and secure. These actions would be a win for U.S. manufacturing, national security and the climate.
“Global support for addressing the climate crisis has grown significantly since Donald Trump first took office. Country leaders know that reducing emissions and supercharging clean energy growth strengthens their economies and competitiveness. That’s why China has invested heavily in wind, solar and battery manufacturing at home, and supply chains and markets abroad. If Donald Trump pulls out of the Paris Agreement again, it would simply diminish the United States’ influence and give other countries a leg up in the booming clean energy economy.
“One can only hope that Donald Trump will put conspiracy theories to the side and take the decisive action to address the climate crisis that the American people deserve. But I won’t hold my breath, and neither will the global community nor U.S. state and local leaders. We are moving forward.”
U.S. Climate United States climate policy Climate Type Statement Exclude From Blog Feed? 0UN Biodiversity Talks Stalled, but Protecting Nature Cannot Wait
Between Oct. 21 and Nov. 2, Cali, Colombia hosted some 23,000 people at the UN biodiversity summit. Political leaders from nearly 200 countries were joined by representatives from Indigenous communities, youth groups, business leaders, NGOs and others. All came for a shared purpose: to halt Earth's rampant biodiversity loss.
Momentum going into the summit seemed strong. At the last biodiversity conference in 2022, national leaders reached a historic agreement to protect 30% of the world's land and water by 2030 and to mobilize billions of dollars for nature conservation. This year's summit, COP16, offered a chance to put forth concrete plans for achieving those goals.
But while the "People's COP" in Cali brought diverse voices to the table and highlighted growing urgency around the biodiversity crisis, progress on its core objectives came up short. Negotiators faced gridlock over key finance decisions and many countries showed lagging ambition. The summit ultimately ended before Parties could reach agreement on a range of issues — most importantly, how to finance conservation at the scale needed.
Still, COP16 offered a pulse check on the world's biodiversity efforts to date. It revealed how far the world has come toward its collective targets and what exactly needs to be done this decade to safeguard the world's precious remaining species.
COP16 Revealed Some Progress on Conservation — but Major Financial PotholesThe first official progress report on the global "30x30 goal," which calls on countries to protect 30% of the world's land and water by 2030, was released during COP16. It found that just over 17% of the world's land area and a mere 8% of marine and coastal areas are currently protected.
This shows progress: Over 2.3 million square kilometers were added to the total since 2020, an area twice the size of Colombia. Yet, the road ahead remains steep. To meet the target, countries must collectively protect another 16.7 million square kilometers of land (an area nearly the size of Russia) and over 78 million square kilometers of marine and coastal areas (more than twice the size of Africa) by 2030.
Much of the discussion at COP16 focused on how to pay for conservation and restoration at this speed and scale — particularly in developing countries, which house much of the world's biodiversity but have the fewest resources to protect it.
In 2022, developed nations promised $20 billion per year by 2025 to support developing countries' biodiversity efforts. They delivered $15.4 billion that same year (the latest data available) and made additional pledges at COP16. But these total in the millions rather than the billions still needed. And negotiations stalled around how to mobilize the funds; specifically, whether they should be channeled through a new dedicated vehicle, as some developing countries have asked for, or through the existing Global Biodiversity Framework Fund.
Other tools to raise public and private finance for nature also proved divisive. Much talk was spent on whether companies should have to pay countries for digital genetic information (known as "DSI") used to develop vaccines, medicines and other products, if it originally came from organisms within their borders. This was seen as a potentially enormous new source of money for nature in developing countries. But while negotiators succeeded in creating a new DSI fund (the Cali Fund) at COP16, contributions were made voluntary. This means it's unlikely to deliver the amounts hoped for.
In short, countries are nowhere near closing the $700 billion annual gap in finance for nature.
The world needs to see much more clarity on how leaders plan to close these gaps in action and finance. All 190+ countries represented in Cali were expected to submit National Biodiversity Strategies and Action Plans (NBSAPs) by the end of the summit outlining concrete steps to meet their collective goals. Yet just 44 did so. More than 100 put forth high-level biodiversity targets, but without formal action plans to achieve them.
World leaders at the 16th UN biodiversity summit (COP16) in Cali, Colombia. While the summit made progress on some fronts, discussions around finance stalled and the summit ended with some key agenda items unresolved. Photo by Xinhua/Alamy Stock Photo What's Still Needed to Meet Biodiversity Targets on Time?Halting biodiversity loss will require billions more in finance to protect and restore nature by 2030. But that's just one piece of the puzzle. Leaders also need to:
Boost conservation and restoration, especially in 'megadiverse' countriesWhile all countries should deliver ambitious, actionable biodiversity plans in line with meeting the 30x30 goal, a few are critically important. The vast majority of species inhabit a relatively small swath of the planet, from the tropical rainforests of the Amazon, Congo Basin and Southeast Asia to coral reefs in the Pacific's "Coral Triangle." Countries that house these megadiverse ecosystems have an outsized impact on species health and survival worldwide.
Some have already submitted national biodiversity strategies. Colombia's aims to expand protected land area from 24% to 34% and grow the country's bioeconomy from 0.8% to 3% of its GDP, helping ensure that healthy ecosystems go together with economic benefits. Others, such as Brazil and the Democratic Republic of Congo, have yet to put forth national strategies (though Brazil aims to do so in 2025). Many megadiverse countries are developing nations that will need increased financial support from developed countries to set and meet bold targets — a message that rang out at the summit.
Fulfil promises to support traditional land managementCOP16 shined a light on the critical role that Indigenous Peoples and local communities play in protecting nature. Many areas traditionally managed by these groups are among the most biodiverse on the planet — often more so than publicly or privately managed lands. Yet, few have seen their customary land tenure rights reflected in law.
This year's summit elevated the voices of Indigenous and local communities in high-level discussions. Representation was more diverse than in the past, and countries agreed to create a new permanent body to ensure these groups' participation in the negotiations moving forward. Now, governments need to translate talk into action by ensuring that Indigenous and local communities have a say in national conservation policy (as they agreed to do under the Global Biodiversity Framework) and enshrining their traditional land rights into law. Countries should also fulfil their promise to direct at least $1.7 billion in nature finance to Indigenous groups; in a step forward at COP16, nations committed to spend 50% of money raised in the Cali Fund on activities linked to Indigenous Peoples and local communities.
Bolster biodiversity efforts with economics, policy and dataEven the best-laid plans will not succeed without policy and enforcement backing them up. To meet their goals, governments must shift toward economic models that work with rather than against nature. That starts with fulfilling their promise to reform $500 billion per year in nature-harming subsidies (such as those for unsustainable farming and fishing practices), on which almost no progress has been made so far.
Countries also need stronger measures to suppress organized nature crime — including illegal forms of logging, land clearing, mining, fishing, and wildlife exploitation and trade — as well as associated financial crimes, corruption and human rights violations. Addressing these threats is critical to enabling progress on biodiversity conservation.
Finally, biodiversity efforts and finance need to be paired with transparent monitoring and tracking to hold governments and other stakeholders accountable.
With Nature on the Brink, Leaders Can't Delay Any LongerFormal talks at COP16 proved slower and more contentious than hoped. But outside the negotiating halls, along Cali's crowded streets, the summit took on a life of its own. From song and dance to networking and open discussions, people from around the globe gathered to celebrate biodiversity and build momentum for protecting it. A raft of new initiatives emerged from this broader engagement, including on cities, restoration, food and land use, finance for tropical forests, and more. The summit proved that a diverse array of people is already rising to the task of tackling the biodiversity crisis.
Now, the question is whether governments, companies and other leaders will harness that energy and urgency to help enable transformative action on a global scale. They know what needs to be done. Now it's time to act.
tahuayo-river-amazon.jpg Forests COP16 biodiversity Finance conservation restoration Type Commentary Exclude From Blog Feed? 0 Projects Authors Crystal Davis Charles (Chip) BarberBy the Numbers: The Climate Action We Need This Decade
The UN’s most recent Emissions Gap Report issues a clear warning: Current policies and national climate commitments fall well short of what’s needed to rein in climate change.
Here’s the science: Limiting global temperature rise to 1.5 degrees C (2.7 degrees F) above pre-industrial levels is essential for avoiding increasingly severe and widespread climate change impacts, but doing so requires cutting greenhouse gas (GHG) emissions 42% by 2030 and 56% by 2035, relative to 2023. Current policies alone will achieve less than a 1% reduction by 2030 and 2035.
Closing these emissions gaps means deploying action at a pace and scale that are unprecedented. Unless countries can collectively and dramatically reduce GHG emissions by 2030, it will become impossible to make up enough lost ground by 2035 to limit warming to 1.5 degrees C with no or limited overshoot.
Fortunately, the year ahead presents a prime opportunity to shift the trajectory: Countries will put forward their next set of climate commitments, or nationally determined contributions (NDCs), by early 2025, detailing their intended climate actions over the next decade. Keeping the 1.5-degree C temperature goal within reach will require these next NDCs to achieve a “quantum leap in ambition” and deliver immediate action across all sectors of the economy.
What Are NDCs?
Countries are set to announce new NDCs under the Paris Agreement by early 2025. Updated every five years, these pledges underpin national climate action, outlining the mitigation and adaptation targets countries promise to achieve, as well as specific measures they plan to pursue. NDCs form the foundation of international efforts to combat the climate crisis.
But today’s commitments — even if fully implemented — put the world on course for 2.6-2.8 degrees C (4.7 to 5 degrees F) of warming and increasingly catastrophic impacts.
In this next round of NDCs, countries should set new economy-wide GHG emissions reductions targets for 2035 and stronger targets for 2030 that collectively put the world on track to limit temperature rise to 1.5 degrees C. Achieving these topline targets will require rapid, far-reaching changes across the economy. To help jumpstart them, countries should also include additional sector-specific targets within their NDCs. While most NDCs include pledges to reduce economy-wide GHG emissions, fewer have featured timebound, quantitative sector-specific goals.
So what exactly does that look like in terms of how we power our homes, grow our food, move people and goods, and more? Here, we break down the transformational changes needed in every sector of the economy to slash GHG emissions over the next decade.
Limiting Warming to 1.5 Degrees C: Sector-Specific Targets for 2030 and 2035First and foremost, countries must strengthen their economy-wide GHG emissions reductions targets for 2030, as well as set new and ambitious targets for 2035, to get the world on track to limit warming to 1.5 degrees C. Going one step further to nest sector-specific targets under these topline, economy-wide targets – particularly those expressed in more concrete, real-world indicators like sales of electric vehicles or hectares of mangroves restored – can help make NDCs more actionable.
While many countries haven’t comprehensively included sector-specific targets in previous NDCs, doing so this time around can set clear benchmarks for both the public and private sectors. These targets, for example, can not only guide implementation across the whole of government, but also signal to companies and investors a country’s future direction.
To help inform this next round of NDCs, new research from Systems Change Lab translates the Paris Agreement’s 1.5 degrees C temperature goal into global, sector-specific targets for 2035, complementing previously published targets for 2030 and 2050.
Critically, countries do not need to progress at the same pace to collectively achieve these global sectoral goals. Developed countries have a responsibility to go furthest, fastest, and while other major emitters will also need to decarbonize rapidly, some may require finance and other support to do so. Still, these targets, alongside collective sectoral goals outlined within the Global Stocktake, offer a helpful starting point for countries as they develop their NDCs by specifying the pace and scale of transformational change needed across the most emissions-intensive sectors:
WRI’s experts are closely following the UN climate talks. Watch our Resource Hub for new articles, research, webinars and more.
PowerDecarbonizing the power sector to help limit warming to 1.5 degrees C will require countries to rapidly transition away from fossil fuels in electricity generation, scale up zero-carbon sources like wind and solar, modernize power grids, expand energy storage, improve efficiency and better manage demand. To ensure a just low-carbon transition, countries should pair these mitigation measures alongside those that provide affordable, reliable and sustainable electricity for all.
Phasing out coal and unabated fossil gas is an immediate priority for the next generation of NDCs. For example, coal-fired power should see immediate and steep declines, with global shares in electricity generation falling 89% by 2030 and 97% by 2035 relative to today’s levels. The scale-up of renewables must also occur rapidly, both to replace these fossil fuels and to keep pace with growing demand. Our research shows the share of zero-carbon sources in electricity generation must increase 125%-133% by 2030 and 150% by 2035 from current levels. Wind and solar power, specifically, should account for the lion’s share of this growth.
BuildingsRapid reductions in GHG emissions across the buildings sector will require improving energy efficiency within buildings; decarbonizing the remaining energy used for heating, cooling and appliances; retrofitting existing buildings; and ensuring all new buildings’ operations are zero-carbon.
Buildings’ current levels of energy and carbon intensity must decline by 17%-41% and 58%-66%, respectively, by 2030. At the same time, annual retrofitting rates should increase by at least 150%-250% from recent levels to meet 2030 and 2035 targets, while today’s share of new buildings that are zero-carbon should grow by more than 1,000%.
Because built environments vary across countries, the mitigation targets nations opt to include within their NDCs may also differ. Some, for example, may choose to prioritize building retrofits that increase energy efficiency and reduce emissions, while those undergoing rapid urbanization may focus on ensuring that new buildings’ operations are zero-carbon.
IndustryLowering consumption through demand reduction and increased circularity; improving energy efficiency; electrifying industrial processes that rely on low- and medium-temperature heat; and developing new solutions like green hydrogen for those that cannot be easily electrified represent the most critical strategies for transforming the global industrial sector. Carbon capture and utilization and carbon capture and storage technologies can help mitigate remaining, harder-to-abate emissions from the sector.
As countries prepare their next NDCs, adopting targets focused on improving energy efficiency and electrifying low- and medium-temperature-heat industrial processes represents relatively low-hanging fruit. For example, the share of power coming from electricity instead of fossil fuels should increase 21%-48% in 2030 and 48%-59% in 2035, relative to today’s levels.
At the same time, countries must lay the groundwork for reducing harder-to-abate emissions, for example, by investing in research, development and deployment of alternative cement materials or green hydrogen to produce lower-carbon steel. Such innovations are critical for lowering the carbon intensity of cement and steel production, two of the highest-emitting industrial sub-sectors. Current levels of carbon intensity for both need to decline by relatively similar magnitudes by 2030 — upwards of 45% for cement and upwards of 30% for steel.
TransportReducing GHG emissions from transport will require a three-pronged “avoid-shift-improve" approach. First, bringing jobs, services and goods closer to where people live can help avoid some motorized transport. The world must also shift away from vehicle trips to public transportation, walking and cycling, while simultaneously improving existing modes by replacing internal combustion engines with electric cars, buses and trucks. Scaling sustainable and zero-emission fuel alternatives for aviation and shipping is also essential.
While unique country contexts will influence the transport targets that countries adopt in their NDCs, the scale of required changes globally are substantial across all prongs. For example, today’s rapid transit networks like metro rails, light-rail trains and bus lanes must expand by 90% by 2030. Electric vehicles’ current share of light-duty vehicle sales must increase by upwards of 690% by 2030 and 730% by 2035, while shares of sustainable aviation fuels and zero-emissions fuels in maritime shipping must both grow by more than 1,000% by 2030, relative to today’s levels.
Though the scale of change required is substantial, adoption of new zero-carbon technologies can occur rapidly, particularly when governments implement supportive policies. Already, some countries around the world are deploying these innovations at the global pace needed to limit warming to 1.5 degrees C.
Forests and Land UseLoss and degradation of the world’s ecosystems — particularly forests, peatlands, coastal wetlands and grasslands — release GHGs into the atmosphere, while protecting, restoring and sustainably managing these same ecosystems can lower GHG emissions and enhance carbon sequestration and storage. If implemented appropriately, these land-based mitigation measures can help limit warming while delivering substantial benefits for sustainable development, adaptation and biodiversity.
Among the most urgent priorities for this next round of NDCs is effectively halting deforestation and degradation of carbon-rich ecosystems. To limit warming to 1.5 degrees C, the annual rate of permanent forest loss must fall 65% by 2030 and 72% by 2035, relative to today’s levels. These declines must be even steeper for wetlands, with recent rates of peatland degradation and mangrove losses decreasing 100% and 85% by 2030, respectively.
Restoration across all ecosystems must also scale up immediately. Current reforestation efforts must increase 77% by 2030 and 115% by 2035; for mangroves and peatlands, this figure jumps to over 1,000% by 2030, relative to recent restoration levels. Continued delays in action not only endanger the 1.5-degree C limit, but also threaten irreversible damage to ecosystems, weakening their ability to provide life-sustaining services.
Food and AgricultureLimiting global warming to 1.5 degrees C will require nothing short of transformational changes across the world’s food systems. Dramatic reductions in food loss and waste (in all countries) and over-consumption of beef, lamb and goat meat (primarily across the Americas, Europe and Oceania) can help curb GHG emissions from both agricultural production and associated land-use changes like deforestation. At the same time, shifts in on-farm practices and new technologies will be needed to sustainably produce more food on existing farmlands, thereby halting expansion into carbon-rich ecosystems like forests. Such changes to agricultural production must simultaneously lower the amount of GHGs emitted per calorie of food produced, safeguard soil and freshwater, bolster livelihoods and food security, and build resilience to climate change. Failure to deliver such holistic changes risks trading one crisis for another.
New NDCs can help bring about the transformation the agricultural sector needs by targeting major emissions cuts. For example, the amount of GHGs emitted per calorie of food produced needs to fall 28% by 2030 and 35% by 2035 relative to recent levels. Crop yields per hectare, which have remained relatively flat in recent years, must also increase 16% by 2030 and 22% by 2035 from today’s production levels to avoid spurring further deforestation and degradation, as well as feed a growing population. Demand-side shifts must occur at a similar pace and magnitude, with countries halving food loss and waste by 2030 and lowering current consumption levels of beef, lamb and goat in high-consuming regions (primarily the Americas, Europe and Oceania) by 21% by 2030 and 26% by 2035.
Technological Carbon Dioxide RemovalAlongside deep and rapid emissions cuts across all sectors, pathways that limit warming to 1.5 degrees C all rely on carbon dioxide removal. More specifically, solutions that remove carbon dioxide directly from the air will be needed to reach net-zero emissions and eventually net-negative emissions. Balancing the tradeoffs associated with different carbon removal approaches will require a diverse portfolio of technologies, like direct air capture and carbon mineralization, as well as land-based measures like reforestation.
Today’s estimates show that all technological carbon removal approaches remove and store less than 1 MtCO2 per year, or less than 1% of what will be needed in 2030. The next round of NDCs provides an opportunity for countries that have capacity and/or have already expressed interest in using carbon removal to communicate plans for developing these technologies. Nations should be transparent by considering separate targets for emissions reductions and removals, what carbon removal approaches they will deploy, and how they will establish policy, governance and financing mechanisms to nurture the growing carbon removal industry and ensure its responsible development.
Moving from Rhetoric to RealityAs the deadline to submit their new NDCs approaches, countries are grappling with how they will transform their economies to drastically cut emissions and meet development goals — and on what timeframe.
By communicating ambitious, timebound and sector-specific targets within their forthcoming national climate commitments, countries can demonstrate to the world how they will approach this fundamental challenge. Now is the time to seize the opportunities present in every sector of the economy. Time is pressing, and the stakes couldn’t be higher.
bike-lanes-sao-paulo.jpg Climate Climate climate change NDC Buildings net-zero emissions industry transportation Forests Food agriculture carbon removal COP29 data visualization Type Finding Exclude From Blog Feed? 0 Projects Authors Sophie Boehm Clea Schumer Kelly Levin Joel Jaeger Judit Hecke Danial Riaz Raychel Santo Katie Lebling Anna Nilsson Emily Daly Marie-Charlotte Geffray Neil Grant Louise Jeffery Michelle SimsWhat Is 'Loss and Damage' from Climate Change? 8 Key Questions, Answered
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The planet has already warmed by approximately 1.3 degrees C (2.3 degrees F) due to human-induced climate change. Millions of people today are facing the real-life consequences of higher temperatures, rising seas, fiercer storms and unpredictable rainfall.
Rapidly reducing greenhouse gas emissions is essential to limit temperature rise and secure a safer future for us all. So is making major investments to protect communities from severe impacts that will continue to worsen.
Yet, collective efforts to curb emissions and adapt are currently not enough to tackle the speed and scale of climate impacts — meaning that some losses and damages from climate change are inevitable. How countries handle these losses and damages has been a key issue at UN climate negotiations and beyond.
Here, we provide an explainer on the concept of “loss and damage” and what’s needed to address it.
1) What Is Loss and Damage?“Loss and damage” is a general term used in UN climate negotiations to refer to the consequences of climate change that go beyond what people can adapt to; for example, the loss of coastal heritage sites due to rising sea levels or the loss of homes and lives during extreme floods. This also includes situations where adaptation options exist, but a community doesn’t have the resources to access or utilize them.
To date, there is no official definition of loss and damage under the UN.
Loss and damage is harming and will continue to harm vulnerable communities the most, meaning that addressing the issue is an urgent matter of climate justice. But the subject has historically been fraught with contention both inside and outside of UN climate negotiations. In particular, countries have struggled to reach agreement on how much money developed countries should supply to address loss and damage in developing nations, which have contributed the least to the climate crisis but are often hit hardest by its impacts.
2) What Counts as Loss and Damage?Loss and damage can result from extreme weather events like cyclones, droughts and heatwaves, as well as from slow-onset changes such as sea level rise, desertification, glacial retreat, land degradation, ocean acidification and salinization. In some cases, damages may permanently alter places; for example, rising seas encroaching on low-lying islands, or drought shrinking water supplies or turning once-productive farmland into barren land.
Harko, 12 years old, walks across the land with her younger brother in search of water during a drought in Ethiopia. Photo by UNICEF Ethiopia/2016/AyeneDamages from the effects of climate change can be further divided into two categories — economic and non-economic — though there is overlap between the two.
Economic losses and damages are those affecting resources, goods and services that are commonly traded in markets, such as damage to critical infrastructure and property or supply chain disruptions. This can play out at an international or national scale as well as locally, such as impacts on individual farmers or communities.
In coastal Bangladesh, for example, salt farming is a major source of employment. Yet in recent years, frequent cyclones, tidal surges and heavy rainfall have hampered salt production, eroding the country’s self-sufficiency and forcing it to import salt to manage the market shortfall.
Non-economic losses and damages can be some of the most devastating — such as the incalculable toll of losing family members, the disappearance of cultures and ways of living, or the trauma of being forced to migrate from ancestral homes.
Take the communities in Kosrae, Micronesia, who have lost burial grounds due to coastal erosion caused by sea level rise. Likewise, the loss of sea ice in the Arctic has affected the cultural identity and hunting practices among Inuit communities. While harder to quantify and monetize, non-economic losses have severe and detrimental effects on communities’ well-being.
3) What Is the Difference Between Mitigation, Adaptation and Addressing Loss and Damage?Under the international Paris Agreement on climate change, countries recognized the importance of “averting, minimizing and addressing” loss and damage. Loss and damage can be “averted” and “minimized” by curbing greenhouse gas emissions (mitigation) and by taking preemptive action to protect communities from the consequences of climate change (adaptation). Climate adaptation measures include protecting communities from sea level rise by helping them move to higher ground, preparing for extreme weather disasters by investing in early warning systems, protecting food supplies, switching to drought-resistant crops and much more.
Addressing loss and damage is the crucial third pillar of climate action: providing support to people and communities after they have experienced climate-related impacts.
Loss and damage is linked to adaptation and mitigation because it happens when efforts to reduce emissions are not ambitious enough and when adaptation efforts are unsuccessful or impossible to implement. The second installment of the Intergovernmental Panel on Climate Change (IPCC) 6th Assessment Report, published in February 2022, acknowledges that as the magnitude of climate change increases, so does the likelihood of exceeding adaptation limits. It differentiates between “soft” limits — when adaptation options exist but communities don’t have the financial resources needed to pursue them — and “hard” limits, where “there are no reasonable prospects for avoiding intolerable risks.” These limits are particularly acute in vulnerable communities that lack the resources needed to implement effective adaptation options.
Coral reefs offer a good example of where adaptation is likely to reach its limits. The IPCC found that 70% to 90% of tropical coral reefs will die by mid-century even if temperature rise is limited to 1.5 degrees C (2.7 degrees F), with nearly total loss under 2 degrees C (3.6 degrees F) of warming. This will lead to irreversible losses of biodiversity and have a major impact on coastal communities that eat and sell fish that live along reefs.
While further research is needed to fully understand the limits of climate adaptation, it’s clear that losses and damage are already happening, and many communities lack the resources to deal with them. Climate plans and policies should account for loss and damage alongside mitigation and adaptation.
Damage to buildings caused by Hurricane Irma in Nanny Cay on the British Virgin Island of Tortola. The Caribbean island suffered widespread damage and destruction when Hurricane Irma passed over in 2017. Photo by Russell Watkins/DFID 4) What’s the History of Loss and Damage in UN Climate Negotiations?The issue of loss and damage has been a lively one in UN climate negotiations for over three decades.
When the United Nations Framework Convention on Climate Change (UNFCCC) was first being drafted in 1991, the island nation of Vanuatu (on behalf of the Alliance of Small Island States) proposed creating an insurance scheme to provide financial resources to countries impacted by sea level rise. Under its proposal, each country would contribute funds based on their relative contribution to global emissions and their share of the global gross national product. However, the proposal was rejected, and the issue of loss and damage was not mentioned when the text of the Framework Convention was adopted in 1992.
Driving Action on Loss and Damage
ACT2025 is a consortium that aims to elevate the voices of climate-vulnerable countries on issues such as loss and damage at UN climate negotiations. Learn more about ACT2025.
Loss and damage first appeared in a negotiated outcome of the UN climate talks in 2007 as part of the Bali Action Plan. Yet it wasn’t until 2013 that the issue gained real traction in these negotiations, when parties formed the Warsaw International Mechanism on Loss and Damage to avert, minimize and address loss and damage. The Warsaw Mechanism was mandated to share knowledge, strengthen dialogues among stakeholders, and mobilize expertise to enhance action and support for loss and damage. But neither the Warsaw Mechanism nor any other established mechanism delivered funding to help countries manage loss and damage.
In 2015, developing nations successfully pressed to include an article on loss and damage (Article 8) in the Paris Agreement. However, finance related to loss and damage was ignored. Not only that, but developed countries secured language in the accompanying COP decision explicitly stating that loss and damage “does not involve or provide a basis for any liability or compensation.”
A large coalition of climate-vulnerable countries advocated at COP26 in 2021 for creating a new finance facility or fund dedicated to loss and damage. But developed nations again rejected their proposal. Instead, a two-year Glasgow Dialogue was established to discuss possible arrangements for loss and damage funding. They also agreed to fund the Santiago Network on Loss and Damage (SNLD), which aims to provide developing countries with technical assistance to address loss and damage. Some EU member states pledging more than €30 million ($32 million) towards the network.
At COP27, countries agreed for the first time to put loss and damage funding arrangements on the formal agenda. This culminated in a historic decision to establish a “loss and damage fund,” which governments aimed to operationalize the following year. Countries also resolved key questions around the SNLD’s governance structures, paving the way for its full operationalization in 2023.
On day one of COP28, after months of intense negotiations, countries set the loss and damage fund in motion and agreed on critical details, like selecting the World Bank as its host. Over the following two weeks, countries pledged almost $700 million to start filling the fund. The Santiago Network on Loss and Damage was also operationalized, with the UN Office of Disaster Risk Reduction and UN Office for Project Services as its hosts and the U.S. pledging an additional $2.5 million.
This was a landmark moment for loss and damage negotiations — but the work is far from done.
Since COP28, work is underway to operationalize the fund, which is now officially named the Fund for Responding to Loss and Damage (FRLD).
The Philippines was confirmed as the host country, an executive director was appointed and the World Bank successfully met the conditions required to host the FRLD.
Some of those conditions include the ability to institute firewalls to ensure the independence and integrity of the fund’s board and secretariat; allowing countries direct access to resources from the fund; and ensuring universal access to all parties of the Paris Agreement, even if they are not members of the World Bank. Countries will also be watching the Fund’s board for institutional arrangements that ensure resources are delivered at the speed and scale that’s necessary.
Meanwhile, the SNLD Advisory Board now meets twice a year, Geneva was confirmed as a host city for the SNLD, and efforts are underway to mobilize the SNLD’s first round of technical assistance which has been requested by Vanuatu.
WRI’s experts are closely following the UN climate talks. Watch our Resource Hub for new articles, research, webinars and more.
At COP29 in 2024, developing countries will be looking for more progress on mobilizing finance for loss and damage, mainly through additional pledges to the FRLD and SNLD, as well as through the inclusion of loss and damage as a subgoal of the new climate finance goal, which is expected to be negotiated.
While the $700 million pledged at COP28 is a start, vulnerable countries may face as much as $580 billion in climate-related damages by 2030.
5) Is Loss and Damage an Issue of Liability and Compensation?One reason loss and damage has been so contentious historically is due to developed countries’ concerns that compensating for losses and damages caused by adverse climate impacts may be construed as an admission of legal liability, triggering litigation and compensation claims on a major scale. As such, developed countries fought to include language in the Paris Agreement to prevent them from being legally on the hook to provide compensation.
This concern was addressed in loss and damage funding discussions at COP27 and in the final decision at COP28, which states that “funding arrangements, including a fund, for responding to loss and damage are based on cooperation and facilitation and do not involve liability or compensation.” This provided the assurance that developed countries were looking for to continue negotiations and set the loss and damage fund in motion.
6) What Are Some Possible Sources of Funding for Addressing Loss and Damage?Beyond the FRLD, some developed countries point to humanitarian aid, disaster-risk management and insurance as sources of finance for loss and damage. Other, more innovative sources have also been proposed, such as levies on air travel and shipping, financial transactions taxes, taxes on windfall profits of fossil fuel companies, and other non-public sources. But these can’t function separately. To address the scale and scope of the problem, they all need to be part of the “mosaic of solutions.”
For example, in the wake of devastating floods in 2022, Pakistan needed short-term humanitarian assistance as well as long-term support for rebuilding. Meanwhile, Palau is concerned that tuna are migrating out of its fishing areas as the ocean warms. Without the ability to fish for tuna, some Pacific Island nations could lose income averaging 37% of government revenue. While humanitarian aid would not be poised nor mandated to address this problem, other forms of finance could.
Thai and migrant workers from Laos and Myanmar line up to collect donations after floods, 2011. Photo by ILO/Sai Min ZawThis underscores the need for broader funding arrangements, including the dedicated loss and damage fund, which can coordinate and align various types of funding from both within and outside of the UNFCCC to adequately address loss and damage. The new fund could facilitate coordination with a wide variety of funding arrangements through multilateral development banks, relevant UN agencies, multilateral climate funds, the International Office of Migration, the Santiago Network and others.
Outside of the UNFCCC, there have been additional important developments for financing loss and damage. These include the Climate Vulnerable Forum and Vulnerable Twenty (V20) Group’s crowd-sourced loss and damage fund and the G7 and V20’s Global Shield Against Climate Risks initiative, which aims to enhance existing financial structures on climate risk and loss and damage finance.
7) What Activities Could Finance for Loss and Damage Support?Action to address loss and damage could span a range of activities and should be shaped by the communities experiencing climate change impacts. Examples include weather-indexed crop insurance for farmers or proactively setting aside funds to rebuild critical infrastructure when disaster strikes.
It could also entail providing immediate humanitarian assistance after an extreme weather event; offering relief and rehabilitation to victims through provision of basic amenities; enabling social protection systems to provide emergency cash transfers to the poor; and enhancing microcredit institutions to provide financing for livelihood restoration.
Loss and damage funding could also help people rebuild when their homes are destroyed. For example, while early warning systems in Bangladesh have helped radically reduce fatalities from extreme weather events, people leave the storm shelters to find their homes and livelihoods destroyed, and have thus unquestionably experienced loss and damage.
Finally, when necessary, funding for loss and damage can assist with migration and relocation of people who are permanently displaced, and/or help diversify skills if their original livelihoods are no longer available.
8) What Needs to Happen Next to Address Loss and Damage?Climate impacts are already causing widespread disruptions and are only poised to worsen, even with ambitious action on emissions reductions and adaptation. The need for loss and damage solutions — most notably, finance to enable them — is more urgent than ever before.
With the loss and damage fund now in motion, the international community will have to work diligently to finalize the details of new funding arrangements and to mobilize finance at scale. Developing countries and communities on the front lines of climate impacts are counting on them.
This article was originally published in April 2022. It was last updated Nov. 4, 2024, to reflect the latest state of play for loss and damage in UN climate negotiations.
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