International climate negotiations traditionally take a burden-sharing approach to reducing emissions: Which country assumes which burden in reducing emissions to be on 1.5°C aligned pathways?
But a COP29 session hosted by We Don’t Have Time and Exponential Roadmap Initiative (ERI) took a different approach. It highlighted how companies seize opportunities offered by the transformation, drive change through the value chains and call for policies to enable accelerated action. The session also shone a light on the finance needed to enable accelerated action.
Central to this approach is the “Carbon Law,” inspired by Moore’s law – the observation in information technology that the number of transistors on an integrated circuit will double every two years with minimal rise in cost. The Carbon Law demonstrates how exponential scaling of climate solutions can phase out the fossil economy. Johan Falk emphasized:
The science is clear: we need to halve global emissions by 2030 to stay within 1.5°C. While renewable energy and electric vehicles are scaling exponentially, many solutions still haven’t reached their tipping points. We need to accelerate their adoption.
Falk also noted that 90% of the global economy is now covered by net-zero targets. Companies with ambitious transition plans are aligning with national strategies to shift entire value chains toward sustainability. However, this progress hinges on national climate plans and policies, with these plans known as nationally determined contributions or NDCs reflecting technological advancements and existing commitments.
Tracking Country Commitments: Successes and Shortcomings
Lord Adair Turner, Chair of the Energy Transitions Commission, highlighted that many nations can triple the ambition of their NDCs simply by factoring in recent advancements in renewable energy and electric vehicles. Turner cited examples where exponential transitions are underway, saying:
What has happened, fundamentally driven by China on solar PV costs, storage battery costs, and EV costs, is extraordinary. […] We are seeing a huge expansion of electrical two-wheelers across Africa, major development of EVs in Thailand, and the UK—interestingly, one of the countries that has come out with a strong NDC committing to have net-zero electricity by 2030. It is going to be a stretch, but it will force the UK to develop technologies for integrating grids, which will then be applicable across the rest of the world. So we hope to see this tightening of NDCs, both to reflect technological possibilities and to account for where countries already have policies in place but haven’t yet reflected them in their NDCs. This process of NDCs is important because the more ambitious one country becomes, the more it will inspire others to be ambitious as well.
Yet, as Turner pointed out, many nations have yet to capitalize on these opportunities, slowed by fossil fuel subsidies and an absence of sector-specific NDCs.
I don’t think there has been enough response from the rest of the world. If you look at the European automotive industry, they were guilty for quite a long time of precisely the inverse—they believed it wouldn’t really happen or would be delayed. They’ve been late to the party but are now trying to play catch-up.
If you take those positive technologies, there are many countries in the world that can now accelerate, particularly the decarbonization of their power systems, but they are not yet doing it. Let me give you an example: if you look at the sunshine that falls on Indonesia and the current cost of solar PV plus batteries, it is an absolutely enormous opportunity to say, ‘We are now going to put solar PV and batteries all over the country.’
So, we are not seeing enough so far, but we have seen China take a very strong leadership position, and we are seeing a very interesting follow-on.
Companies Leading the Charge Where Countries Fall Short
Where countries and governments lack momentum, many global companies are stepping up to lead by example. They demonstrate how integrating the transition into core business strategies can be both impactful and profitable, with the goal of inspiring nations and global collaborations to follow suit. Ultimately, the business community is being called upon to act as communicators and implementers of economic opportunities. Falk emphasized this point:
Transformation is happening through value chains. Frontline companies need low-carbon transport and renewable energy. National plans should see this as an opportunity to drive growth and secure resilience.
Jennie Cato, SVP at Scania, shared how the company is investing heavily in electrification, marking the biggest transformation since transitioning from horse-drawn carriages to combustion engines. However, the shift requires holistic policies supporting all aspects of the ecosystem, from grid infrastructure to customer incentives. She says:
We decided 10 years ago to drive the shift toward a sustainable transportation system, acknowledging that since we are part of the problem, we need to be part of the solution. We are now spending more than half of our R&D budget on electrification, choosing it as our main technology track to transform the transportation system. This marks the biggest shift since we moved from horse-drawn carriages to combustion engines—now transitioning from combustion engines to electric drivetrains, which are, of course, much more efficient and CO2 emission-free.
We currently have more engineers working in software than in mechanical engineering. Additionally, we have invested in a battery assembly plant in Södertälje [Sweden]. This is our main track for reducing emissions, and we are working to get politicians and policymakers to support and enable this transition as well.
However, as the incentives from the public sector are slow, Scania sees opportunities for the private sector to jointly drive this change and collaborates with the competitors Volvo Group and Daimler Truck to establish 1,700 charging points across Europe, addressing critical bottlenecks for heavy electric vehicles.
Similarly, Sriram Rajagopal from Inter IKEA Group underscored the importance of signaling strong private-sector commitments. He stressed that the transition should be seen not as a reactive hardship but as a proactive business opportunity. Rajagopal explained:
When it comes to the race to the top, IKEA sees this as a business opportunity to be an early mover in this space—both as an economic opportunity and as a way to build business resilience. As a global home furnishing company that has been around for 80 years, we need to do everything to secure our existence for another 80 years and beyond. That’s the premise for why this whole agenda is important.
We have set clear goals and commitments aligned with the science of 1.5°C. We will be halving emissions across the whole value chain, from the extraction of materials to the customer use of our products in their homes.
IKEA is working with thousands of suppliers to scale green materials and support the investment towards renewable energy adoption. While private-sector financing plays a vital role, the panel does however stretch the importance of public-sector support for addressing the initial risks of innovation.
Financing the Transition
The theme of focus of COP29 is indeed finance and the dual responsibility of the private and public sectors in driving investments, especially in low-income countries where private capital investment is limited and the ability to make riskful investments is crucial. Lord Turner noted that developed nations must create incentives for private financial institutions to step in, while public institutions handle high-risk projects. Ariana Giulio Berruti from BSR emphasized that clearer communication in NDCs is essential to attract private investors. Standardized, sector-specific plans will allow financiers to identify opportunities and allocate resources more effectively. Johan Falk echoed this sentiment, pointing out that implementation cannot happen without financing, and financing will not flow without robust policies.
Panelists emphasized the global nature of the challenge. While wealthier countries are expected to lead the way, poorer nations have unparalleled opportunities to leapfrog into clean energy solutions. From Kenya’s burgeoning green energy sector to Indonesia’s untapped solar potential, these nations could play pivotal roles in the global energy transition.
This session at COP29 highlighted that climate action does not need to be seen as a burden but can rather be seen as an opportunity. Create jobs, improve health, and foster prosperity.
