“The most important policy documents of this century” – that’s what the Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC) says of the national climate action plans, or nationally determined contributions (NDCs), that parties to the convention are expected to submit in the lead up to COP30 in Brazil next year.
A broadcast event from the We Don’t Have Time Climate Hub that Exponential Roadmap Initiative co-organised with the World Business Council for Sustainable Development (WBCSD) highlighted how public-private collaboration can increase the ambition level in the NDCs under preparation.
The need for ambitious and effective NDCs
According to a new report by the Energy Transitions Commission (ETC), the NDC targets set in 2020 are projected to achieve only about six gigatonnes of emissions savings annually by 2035. This falls significantly short of the reductions needed to meet the Paris Agreement’s goal of limiting global temperature rise to 1.5°C.
ETC Director Ita Kettleborough:
There are three major areas which aren’t being reflected in today’s NDCs: existing progress of clean technologies. existing commitments which were made by countries at COP28 in Dubai, as well as existing industry commitments. If we were to reflect these areas into NDCs, global ambition could be three times higher than what it is based on current NDCs.
Now, even a tripling of ambition, wouldn’t take us all the way to where we need to be, but it gives you a sense in how behind we are today and of how much further we could go based on existing technological progress, country commitments and industry commitments already made today.
Kettleborough stressed there was a critical window of opportunity to use the NDCs to be delivered by early 2025 as an “incredibly powerful tool in the global toolbox to tackle climate change”.
The role of the private sector: “loud, vocal, and showing that it works”
The private sector plays an important role in enabling governments to design NDCs as these “powerful tools”.
Dr Jennie Dodson, Senior Director for Policy & Advocacy at WBCSD:
Governments increasingly recognize they need to engage the private sector because that private sector balance sheet of finance is critical to achieving national climate plans.But also, companies that are developing their corporate transition plans and looking to decarbonise their supply chains are also seeing how essential it is to engage on policy to enable achieving their goals. It’s really important that NDCs and corporate transition plans are not just setting out individual plans but there is a co-creation to see how plans align and how each can help the other to move in order to get this ambition loop going.
Dr Lutz Morgenstern of Germany’s Federal Ministry of Economic Affairs and Climate made clear how the private sector was needed to increase ambition from governments.
We need the private sector to be loud and vocal in favour of strong and ambitious climate policies. We also need companies’ advice and dialogue to understand what they actually need in these NDCs so they can be real investment plans. And we need the private sector to showcase that the transition works on the ground, making it easier for governments to convince others that are not yet convinced that it’s possible.
For the company Nestlé, Owen Bethell, Environmental Impact Lead of Global Public Affairs, said they were “happy to be loud about climate change” because companies needed the supportive policy environment:
NDCs offer a really good opportunity to send a strong signal about what the world will look like over the next 10 years, giving businesses the confidence to decarbonise and invest in things that make sense from a policy and business perspective.
By way of a concrete example to improve the next round of NDCs, Bethell highlighted the importance of including emissions from food and land use.
Agriculture is linked to up to one third of global emissions. These emissions are quite hard to abate because there are no easy technological fixes. It’s more about moving long-term to a more regenerative approach and implementing policies that stop negative aspects of agricultural production such as deforestation.
If all countries included a no-deforestation approach into NDCs that could actually tackle a lot of emissions in the short and medium term alongside more longer term plans to move to more sustainable food production.
We’re seeing encouraging moves in that direction, for example from Colombia, which has embraced a food-systems approach to decarbonisation. If other countries follow suit, that then becomes an attractive proposition for us to think about how to reform the sourcing of coffee and cocoa and other food ingredients.
From ambition to implementation
But countries must also implement any higher-ambition NDCs – and even there, the right design helps.
Ita Kettleborough, ETC:
There’s a tendency to put the target out there and hope that that’s enough. But while the target is important, it is even more critical to link it to national policies and other strategies. Nowhere is that more important than with regard to investment requirements. So especially in cases where targets are conditional on finance, it’s important to state clearly what the policies are and what the investment needs are and what the implementation plan is.
NDCs need to set out the targets in a comprehensive and comprehensible way and hopefully increasingly standardised fashion. NDCs are powerful because they are nationally determined and countries can shape them to their growth and development plans, but it would be helpful to have more NDCs that are moving to targets that are absolute rather than relative, that covers all sectors and all greenhouse gases and that are very granular on what the sectoral transition pathway looks like for the country.
This granularity doesn’t have to be in the NDC itself but ideally links to sectoral transition plans with details such as gigawatt installation targets for renewables or dates for bans of internal combustion engine vehicles.
How can then the private sector support on achieving the national ambition? Owen Bethell offered an example:
If you look at countries like Brazil, they’re hosting COP30 and they also have a strong focus on the concept of the bioeconomy, ie growing the food and agriculture sector in a way that is compatible with nature and climate.
We at Nestlé can help deliver that. We have big plans for Brazil and are investing big money in moving to regenerative agriculture and in measures to reduce and prevent deforestation and all that can contribute to achieving the ambition that countries lay out.
Jennie Dodson had more examples in store of how public-private collaboration could help achieve targets:
Denmark set a very ambitious emissions reductions target of 70% by 2030 but they didn’t just model what each sector could achieve. They threw that gauntlet to the private sector and asked a few CEOS to lead in bringing the private sector together and then coming back to say how far the companies could go and what they needed from government in order to achieve that and what investments could be unlocked, all while the government itself considered what it could make possible. The companies arrived at recommendations and the government is now implementing some of these policies.
India wanted to scale freight vehicles but was struggling with putting policy instruments in place because there wasn’t that sense of ambition and support from the wider landscape. We managed to bring together business organisations – not the manufacturers, but companies that require zero emissions vehicles for their operations. They made demand commitments for thousands zero emissions freight vehicles provided the enabling policy environment was put in place. That unlocked $350 million in investments. The key here was getting together business, governments and finance for one, as well as leveraging the entire supply chain to make a strong case about demand in order to unlock investments.
WBCSD has kicked of work to look more closely at how such cases could be scaled and is aiming to develop an “how to” framework for unlocking co-investments from companies and countries for transitions on the corporate and national levels.
Watch the event recording in full length:
