Reflections on the latest report by the Global Commission on the Economy and the Climate

With less than five months to go before the UN climate conference (COP21) in Paris in December, countries are bringing forward their national mitigation pledges. The EU, USA, Russia, Mexico, Canada and Japan have all published their so-called “intended nationally determined contributions” (INDCs) – and were joined in the last couple of weeks by China, which has promised to peak its greenhouse gas (GHG) emissions by 2030 or earlier.

But a serious problem has emerged. It is now clear that added together, these pledges are not going to get close to a sufficient level of emissions reduction to put the world on a pathway to holding global warming to under 2°C. Even if countries reach a new international agreement in Paris, there is still a severe risk that it fail to achieve the goal they have themselves set to limit climate change.

But a new report published this week argues that this need not be the outcome. Seizing the Global Opportunity: Partnerships for Better Growth and a Better Climate, the second report of the Global Commission on the Economy and Climate, shows that achieving a low-carbon growth pathway to 2°C remains possible – and argues that this year’s INDCs should not be seen as the final word on countries’ climate targets.

Chaired by former Mexican president Felipe Calderon, the Commission is made up of leading figures from government, business, and finance from 20 countries, including Grantham Research Institute Chair Nicholas Stern. Last year it published the influential New Climate Economy report, Better Growth, Better Climate. Its new report shows that momentum towards a low-carbon economy is beginning to emerge, but the pace of change needs to be rapidly accelerated. So it recommends a set of ten actions in key areas – from clean energy to forest protection – which could drive economic growth and cut emissions at the same time. Together, it estimates that these could achieve up to 96% of the emissions reduction needed by 2030 to put the world on a 2°C pathway.

The key insight of the report is the potential for international cooperation of various kinds to galvanise stronger action. It acknowledges that INDCs represent “nationally determined” commitments. But it argues that national action can be strengthened by a variety of international and multi-stakeholder partnerships – not just among governments, but among city authorities, businesses, investors, international organizations and civil society. These forms of cooperation can help scale up technological change, expand markets, reduce costs, spread best practices, increase the flows of finance, and address concerns about international competitiveness.

The report’s recommendations include:

• City-level partnerships like C40 and initiatives like the Compact of Mayors should be scaled up to help drive low-carbon urban development. 80 cities have already signed-up to the Compact. Investment in public transport, building efficiency, and better waste management could save around US$17 trillion globally by 2050. This could save up to 3.7 Gt CO2e a year by 2030.
• Partnerships such as REDD+, the Initiative 20x20in Latin America, and the Africa Climate-Smart Agriculture Alliance should be scaled up, bringing together forest countries, developed economies, and the private sector to halt deforestation and restore degraded farmland. This can enhance agricultural productivity and resilience, strengthen food security, and improve livelihoods for rural and forest communities. This could save up to 9.0 Gt CO2e a year by 2030.
• Multilateral and national development banks should work should together with governments and the private sector to reduce the cost of capital for clean energy, aiming for total global investment to reach US$1 trillion by 2030. This would improve energy security and reduce the costs of air pollution from fossil fuels and could save up to 7.5 Gt CO2e a year by 2030.
• The G20 should aim to raise energy efficiency standards in the world’s leading economies to the global best for goods such as appliances, lighting, and vehicles. G20 countries, for example, produce 94% of vehicles globally, so their standards determine the market. Investment in energy efficiency could boost cumulative economic output globally by US$18 trillion by 2035, increasing growth by as much as 1.1% per year and saving up to 6.9 Gt CO2e a year by 2030.
• Action should be taken under the international aviation and maritime treaties and the Montreal Protocol on hydrofluorocarbons (HFCs) to reduce emissions by as much as 2.6 Gt in 2030. In shipping alone, higher efficiency standards are expected to save an average of US$200 billion in annual fuel costs by 2030.

The report notes that a new international climate agreement in Paris would send a strong signal to businesses and investors that the global economy is heading towards a low-carbon and climate-resilient future. It argues that a strong agreement would include a long-term goal for emissions to reach near-zero or below in the second half of the century, a mechanism for regular strengthening of commitments, and a strong and equitable package of support for developing countries. And it urges the INDCs being published in 2015 should be considered as “floors, not ceilings” to national ambition, which can be strengthened over the coming years as technological change and international partnerships create new low-carbon opportunities at lower cost.

Michael Jacobs was the Report Director for the Seizing the Global Opportunity: Partnerships for Better Growth and a Better Climate report.