BROADENING OUR HORIZON TO NON-CLIMATE POLICIESEmilie Prattico, Edward Cameron, Christoph Karge (BSR), Andrew Wood, and Bryce Rudyk (NYU)
To realize the full ambition of the Paris Agreement, we need to think beyond traditional climate policy tools to encompass non-climate policies that can help to catalyze ambition among a global set of actors.
The We Mean Business coalition is embarking on a multi-year structured dialogue to identify those non-climate policies that will strengthen the capacity of the private sector to be a partner to governments across the globe, both in ambition and implementation. In 2015 we championed eight “policy asks” essential to a global climate agreement.
Having secured those asks we will now begin to explore the non-climate policies required to realize our collective ambition. At COP22 we will begin the conversation by looking at what is required to progress on climate finance, carbon pricing and adaptation. Some common themes have already emerged:
Domesticate The Paris Agreement
The challenge is to understand the national circumstances of each country and what additional domestic action is needed to enhance climate compatible development. Some countries will need policies to drive R&D investments, others will need to revise governance systems to attract inward investment. The prevailing political culture in some countries will favor carbon pricing, while others will find this politically implausible and will need to find a different mechanism.
Adaptation is a clear example of an issue that requires domestication. While international finance is a vital ingredient to building adaptive capacity, truly addressing vulnerability requires approaches that respond to local ecosystems and local communities. These include addressing economic disparities that restrict availability of and access to finance; political systems that prevent access to information, decision making and justice; cultural norms that exacerbate the vulnerability of marginalized communities; and processes that prioritize built infrastructure above building capabilities through social, political, natural, financial and human capital.
Strengthen the Rule of Law
Realizing the ambition of the Paris Agreement requires the mobilization of significant amounts of private capital and the development and deployment of low-carbon innovations, including clean-energy technology. The private sector, both domestic and global, will be unwilling and unable to contribute to this unless they are confident that laws will be fairly and transparently applied and enforced.
Financial services companies are more likely to build the right products and vehicles if they trust that capital will be protected from graft and corruption. Protection of intellectual property encourages business investments in the R&D that leads to breakthrough technologies. And companies are more likely to invest if contract law is fairly enforced, tax law is transparent, and government red tape is minimized.
Coherence Across Policy Frameworks
The Paris Agreement signals structural transformations across sectors and throughout the global economy. It is hard to drive this transformation in the absence of coherent international policy frameworks, in all areas that touch on this global transformation. Public investments in changing energy infrastructure become more difficult when faced with competing trade rules. The challenge of reducing emissions from land use and driving equitable access to sustainable development is enhanced when agriculture and climate policies are out of sync.
The drive for ambition within the UNFCCC will be diluted significantly unless International Civil Aviation Organization (ICAO), International Maritime Organization (IMO), and other global bodies are as committed to decarbonization. Emissions reductions identified in Paris will be difficult to achieve unless the multilateral development banks are as clear in their commitment to fundamentally changing their energy investments. And committed countries need to recognize that this is best achieved by improving human rights – particularly access to information, decision-making, and justice under the Human Rights Council in Geneva.
Allow Coalitions and Clubs to Become the New Normal
While the objective of the Paris Agreement is to shift the entire economy, this can happen in pieces and at varying speeds. This disaggregation allows leaders and sectors to move further faster and to take their ambition to the highest level. Policies that incentivize first movers and enhance cooperation can build confidence in peers to raise their own ambition.
There are already a number of examples of disaggregated action, including the rise in carbon pricing initiatives. Enhanced cooperation is already taking place between governments, businesses, and civil society, such as the Carbon Pricing Leadership Coalition (CPLC), which launched at COP21 with the backing of the World Bank and IMF. Or the International Emissions Trading Association (IETA), which started in 1999 and provides the data and evidence base of pooled information necessary for improved regulation, as well as by disseminating information and building capacity amongst private sector stakeholders for better decision-making.
The blueprint and overarching framework laid out in the Paris Agreement is a historic feat to be celebrated. While the French gavel signaled the end of an age of diplomacy and negotiation, it also opened a brand new era where the incentives we design to catalyze action must be comprehensive, and look beyond environment and energy to include non-climate policies.