Author: Mariana Vedoveto

Long-term decarbonization targets signal that climate action is here to stay

A group of academics, researchers, and policy leaders recently released a blueprint for an International Climate Agenda for the incoming Biden administration. The report lays out recommendations of how the next U.S. Administration can embed climate action as a central pillar into its foreign policy doctrine. While this report is intended for the Biden White House, it may also shed some light on how the broader international community could more effectively address climate change.

Within its first year, the report recommends that the U.S. Government lay out ambitious Nationally Determined Contributions (NDC) for 2030 as required by the Paris Agreement. In addition, the authors of the report call for the Biden team to make a long-term commitment on climate by setting a backstop goal of net-zero economy-wide emissions by 2050. The authors argue that setting a long-term goal sends a long-term market signal to the private sector “that will help shape markets, influence investment patterns, [and] spur market innovation.” Indeed, the architects of the Paris Agreement understood the importance of these long-term signals and called on all signatories to “strive to formulate and communicate long-term low greenhouse gas emission development strategies.” The COP also declared countries should begin submitting these plans by 2020.

Seventeen countries and the European Union have submitted their long-term emissions strategies to the UNFCCC. These include the U.S. Mid-Century strategy, which targets 80% reductions by 2050. This goal is likely to be ratcheted up by the Biden Administration to 100% reductions by 2050. Several other countries have come out with their own long-term goals for net-zero emissions by 2050 including Japan, South Korea, and the European Union. China has also announced its new target to achieve net-zero emissions by 2060.

These long-term emissions targets serve as crucial long-term signals to every sector of the economy that decarbonization and policies intended to push emissions down are here to stay. An OECD report on long-term targets notes that these policy levers “promote fiscal, legal and regulatory certainty.” But how can these long-term targets be even more effective and mobilize every economic sector?

The International Climate Agenda report recommends that climate goals be time-bound, and both economy-wide and sector specific. Sector-specific targets (for instance in power generation, transportation, and buildings) enable governments to send even more effective and tailored market signals, as well as enhance the understanding of these goals by public, private, civil society, and other key players. The report highlights that targets that include specific milestones, such as a precise number of electric vehicles on the road or solar panels on roofs, can increase awareness of the required scale of ambition and rally the public behind these efforts.

As countries announce a flurry of long-term climate commitments, it’s important for the international community to leverage these targets in a way that sends effective long-term signals to the private sector. Leveraging these targets mean coordinating countries’ goals and integrating sector specific milestones across borders. The international community should utilize harmonized targets to push climate laggards towards greater ambition through international trade and other bilateral and multi-lateral negotiations.

For climate resilience there is no silver bullet, but there may be a quilt

When it comes to climate change, reducing greenhouse gas emissions often overshadows the need to help communities adapt to the impacts of climate change. Reducing emissions is often easily quantifiable and results are relatively transparent. Boosting resilience is not always easy to measure or quantify, and results don’t always appear right away. Solar panels and wind turbines are highly visible “sexy” symbols of climate mitigation. Climate resilience lacks these visible, easily understood solutions. These challenges do not mean resilience should be deprioritized, however.

At the 2010 UNFCCC meeting in Cancun, Mexico, the participating parties established the Green Climate Fund (GCF), a non-profit entity to finance projects in developing countries that would help address climate change. The GCF framework emphasized the need to reduce greenhouse gas emissions and increase resilience to the impacts of a changing climate. The fund’s budget reflects the equal importance of these goals with 50% of financing going towards climate mitigation and 50% towards adaptation.

Over the past several years, project implementers have found creative means to boost resilience to the impacts of climate change, like flooding or increased exposure to wildfires. A recent webinar with the American Society of Adaptation Professionals (ASAP) featured several speakers from the public, private, and non-profit sectors, which covered a few of these lessons learned.

Shaun O’Rourke, Chief Resilience Officer for the state of Rhode Island noted that when it comes to climate resilience, “there’s no unique silver bullet. A quilt is needed to move these initiatives forward.” That quilt consists of many different partners, financing mechanisms, capital sources, and projects.

Joyce Coffee, Founder and Principal of Climate Resilience Consulting, framed one of the main challenges. She observed that climate resilience is often a local problem. Municipalities and local governments lack the resources to successfully address these threats. Coffee observed, “States have the ability and responsibility to make a difference in building climate resilience. States have more economic stability to build local resilience for their constituencies.”

In short, Coffee makes the case that states can and should do a better job to support local governments when it comes to climate resilience. A recent report that Coffee co-authored highlighted several key domains. States can help foster seven capacities of local resilience building: scientific foundation, intergovernmental alignment, communications, technical design, equitable adaptation, inclusive community engagement, and financial resources.

Pubic Private Partnerships are a powerful tool that have led to positive results when it comes to climate resilience. The Rhode Island Infrastructure Bank is a case study in how public private partnerships can stretch precious public resources further and lead to better outcomes to communities. As part of the state’s “Resilient Rhody” program, the quasi-public entity that serves as a centralized hub of local infrastructure investment is working to address the impacts of climate change. The program has identified 61 actions on 1, 3, and 5-year timelines that would help boost resilience to the impacts of climate change across the state such as sea level rise. The program leverages innovative financing mechanisms and has identified a pipeline of climate resilience projects.

Quantified Ventures (QV) is a outcomes-based capital firm that plan, finance, and develop projects that create health, social, and environmental impact. Outcomes-based financing helps governments transfer the performance risk of innovative projects to investors and increases issuers’ access to new sources of capital. Among several mechanisms, QV utilizes environmental impact bonds to provide upfront capital from private investors for environmental projects.

QV is involved in a project in Colorado’s San Juan Forest to help local communities reduce the risk of wildfires. QV is working with the state and local nonprofits to form the Environmental Impact Fund (EIF) through the issuance of public bonds. The EIF finances forest management at scale to reduce wildfire risk. EIF proceeds are complemented by private cost-share, federal contributions, and revenues from biomass sales. Rural communities repay loans based on risk mitigation outcomes associated with these projects.

Ben Cohen, Director of Urban and Coastal Resilience at QV summed up this unique project: “The goal of this project is to use a multi-payor, outcomes-based fund to enable long-term cross-boundary wildfire risk mitigation. By stacking payors, capital, biomass revenues, and public and philanthropic contributions we can minimize fire funding required of small rural communities.”

This project in Colorado’s forests represents one example of leveraging partnerships across multiple stakeholders to improve outcomes. To boost resilience across the entire U.S. and beyond across the globe, will require a patchwork of projects that each fit the local threats, partners, and resources on the ground.

To create lasting resilience to climate change, we will need to stitch together a quilt that is more than the sum of its parts, and it will take cooperation and creativity from many different partners across the public, private, and non-profit sectors. This quilt might be the most precious heirloom we could pass on to future generations.

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