CDKN's Sam Bickersteth weighs up the prospects for serious climate action in a year of economic and political uncertainty, technological innovation, and climate change impacts.

Nationally Determined Contributions (NDCs) – the national climate action plans – sit at the core of the Paris Climate Agreement. Over the past two years, there have been several international initiatives to support their implementation.

The NDC Partnership provides a mechanism for exchanging lessons learned. In May 2017, the LEDS Global Partnership, UNDP and GIZ convened representatives from 80 countries at the Global NDC Conference to take stock of progress in delivering NDCs. The Climate Finance Accelerator illustrates the considerable activity underway to finance NDCs in countries that are progressive on climate policy. As we look ahead in 2018, what can be expected of the NDCs?

NDCs set out carbon emissions reduction targets. They vary in level of ambition and realism but when added up they are insufficient to keep global temperature rise to less than 2C.   Consequently, the Paris Agreement presents them as an initial statement of ambition, which will need to be ratcheted up through mechanisms of reporting and review.

Will the world dodge further emissions growth in 2018?

There has been substantial progress in decoupling emissions from economic growth: PwC’s Low Carbon Economy Index reported that global carbon intensity declined by 2.6% in 2016. But nonetheless, total greenhouse gas emissions have traditionally risen in step with global prosperity and in 2017 they increased by 2% after three years of plateauing. With global economic prospects for 2018 looking good at an estimated 3.7%, the highest for seven years, there are serious risks of an upturn in emissions.

The question is whether, with nearly all countries having acceded to the Paris Agreement, global emissions will start to fall despite the expected economic growth? Will the relationship between growth and emissions be truly broken? Can we expect other countries to emulate Ethiopia by tackling poverty reduction alongside a decrease in emissions? Better still that decarbonisation is directed towards addressing the absurd levels of inequality where billioniares who make up just 1 percent of the world's population are reported to own 82 percent of the world's wealth.

Global policy as a driver for national action

In 2018, the UNFCCC is focussed on developing the rule system for the Paris Agreement. The so-called Talanoa Dialogue of parties to the Agreement is designed as a collaborative opportunity to review progress and ramp up longer-term ambition. The Paris Agreement only comes into force in 2020, so the horizon for the Talanoa Dialogue is several years beyond that.

We may, understandably, expect developing countries to increase their calls on the global stage for accelerated action by the large, polluting nations to cut emissions in the pre 2020 period, as well as to call for more finance to assist their national actions.   Other mechanisms are required to emphasise the urgency of action particularly by the large polluters. It is important to ensure that NDCs sit at the heart of all national policy making with an appropriate pathway to decarbonisation. What are, therefore, some of the other drivers for NDC progress over the next 12 months?

Climate related disaster risk is on the agenda

Last year was also the hottest non-El Nino year on record and we saw an increased awareness of human impacts on oceans in part awakened by the BBC’s Blue Planet 2 series. Impacts of sea level rise are driving people from their island homes in countries such as Vanuatu. Forward-thinking politicians, policy makers, businesses and financiers have been giving attention to these climate threats in part alarmed at losses from climate related disasters. These were reported to be $330bn last year by MunichRe, second only to record-breaking losses in 2011. They understand the need to value climate risk as climate related financial disclosure starts to become mandatory and hence many businesses are setting science based targets for their own emissions.

Action by subnational actors adds up

Cities and subnational states and regions are clubbing together to take action in the Under 2 Coalition – a cohort of like-minded local governments that have committed to moving toward net zero carbon emissions by 2050. All of this indicates the on-going integration of climate actions into the policies and plans of governments, both local and national, and businesses.

Accelerated ambition requires finance and, for developing countries, new green finance instruments are emerging through the launch of green bonds, targeted use of national and international public funds and demonstration projects.   NDCs will only succeed where they are integrated into the national plans and budgets (as set out in 10 Propositions for Success – integrating international climate change commitments into national development planning).   However, CDKN has examined the evidence of financing for NDCs in four African countries, and shown that budget allocations are currently limited and in many cases reliant on donor support.   The clamour for international climate finance particularly for adaptation will continue through 2018, but as Green Climate Fund finance flows more widely their ability to catalyse larger funds from national public and private sources will be examined.

Fourth Industrial Revolution and trade could impact emissions

CDKN has been considering how emerging technologies (fast developing as the Fourth Industrial Revolution – 4IR) can be harnessed to drive NDCs. The current exponential rate of change is illustrated by wind and solar power costs continuing to fall such that two-thirds of new power installed last year was renewable. Similarly, the Government of India has announced that all cars sold will be electric with many other countries setting ambitious targets. Artificial intelligence, blockchain and new advanced materials could all improve efficiency of and access to energy systems. Drones can be used for remote sensing and better use of agricultural inputs or even plant trees.  With $90trillion worth of infrastructure systems to be built by 2030 and most of it in developing countries there is an enormous potential to provide NDC coherent technology solutions. To achieve this, governments need to establish policies and capacities that facilitate early adoption of 4IR technologies and to understand their potential.

Besides technology, trade has the potential to be an enabler for NDCs.   CDKN has concluded that there are opportunities for triple wins with the potential for free trade agreements (of the type that the UK is considering post Brexit) that could deliver commercial, climate and developmental outcomes with minimal trade-offs in tariffs, trade in services, and product standards.

During 2018, there will be many political and economic distractions but it is important that the NDCs remain as the locus of climate action at both international and national levels.   Efforts at NDC mainstreaming will drive climate action into normal planning, budgeting and implementation processes. This hard work of translating the NDCs into sectoral actions across key sectors of energy, transport, infrastructure and land use will need to go on, competing with other priorities. As anticipated in the Paris Agreement it will take time to build foundations for the essential deep decarbonisation that all economies must follow and the next round of NDCs have an opportunity raise ambition and be better aligned.   Whether this will result in a reduction of emissions at global scale is far from certain.

Image: Sandia Labs