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Bold climate policy drives decisive business action

The transition to a net-zero economy has begun. It’s achievable and brings significant benefits.

 

Businesses are calling for bold policy ambition in key areas:

Economies for People and Nature

Now is the time for all countries to commit to the 1.5°C trajectory, translate global goals to policies and deliver climate action in this critical decade. Accelerating action towards the 1.5°C objective of the Paris Agreement will help drive sustainable economic growth, build resilience and solidarity, and create new jobs as part of a just and inclusive transition.  To achieve this, governments must work with business to drive systems transformation across Finance, Energy, Transport, Industry, the Built Environment, Land Use and Nature. 

Business calls on government to:

Put forward strengthened, high quality Nationally Determined Contributions (NDCs) in line with a 1.5°C trajectory and the latest science to halve global emissions by 2030.

Put forward strengthened, high quality Nationally Determined Commit to achieving economy-wide net-zero emissions in a just and inclusive manner by 2050 at the latest and reversing nature loss by 2030.

Develop policies, implementation plans and laws across the economy, including evidence from business, that reach NDC and net-zero targets and are nature positive.

Develop policies that ensure a just transition that is fair and supports NDC achievement, respect the needs of all people and countries, and builds a more inclusive economy.

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FINANCING THE TRANSITION

To finance the transition and encourage environmentally-aligned investment, markets need full information on climate risks and opportunities, clear pricing signals and policies, and public climate finance support. Public and private money must be spent to help countries accelerate towards a green and net zero economy to stimulate net-zero products, services and business models. 

Business calls on government to:

Deliver on the commitment by developed countries of at least $100B per year in support of inclusive climate action by developing countries and agree an ambitious post-2025 climate finance goal.

Put a meaningful price on carbon and implement the Article 6 rules to develop carbon markets that drive ambition while ensuring environmental integrity and avoiding double counting.

Make climate-related financial disclosure mandatory for corporations, in line with the TCFD and ISSB recommendations.

Require companies and financial institutions to put in place climate transition plans for near-term, credible action.

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A New Energy Market

Cutting global emissions by more than 50% by 2030 and achieving a just and inclusive transition to the net-zero economy requires radical transformation across all sectors, in particular the energy system. Despite the remarkable uptake of renewable energy, fossil fuels still account for a majority of energy demand and the transition away from fossil fuels is not happening fast enough. This underscores the need to accelerate the deployment of zero and low-carbon fuels and technologies at scale. 

BUSINESS CALLS ON GOVERNMENT TO:

Commit to reaching 100% decarbonized power systems by 2035 in advanced economies and by 2040 for other countries, at the latest. invest in capacity building that supports a rapid and just transition.

End new coal power development and financing immediately. Develop plans to phase out coal-fired power generation by 2030 for advanced economies, and 2040 for other countries, at the latest.

Set out national action plans in 2022 to eliminate all fossil fuel subsidies by 2025. Repurpose those towards energy efficiency, renewable energy, and other measures to support a people-centred and equitable clean energy transition.

Accelerate the deployment of energy efficiency technologies and solutions in buildings, industry and transport, and integrate energy efficiency criteria into public procurement rules.

Invest in modernizing the grid to improve balancing and resilience.

Commit to public procurement at the national and local level and stimulate corporate procurement of renewables.

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The Road to Clean Transport

The way we move people and goods needs radical change. The transition from polluting internal combustion engines to zero emission vehicles, ships and airplanes is accelerating, but not fast enough. More is needed to achieve zero emission multi-modal freight transport. A holistic approach with policies and programs that drive innovation, enable uptake of solutions, and scale infrastructure can get us there. A parallel decarbonization of the power sector is vital to ensure net-zero transport. 

BUSINESS CALLS ON GOVERNMENT TO:

Implement increasingly stringent emission standards aligned with the 1.5°C pathway for all modes of transport.

Continue to promote fuel efficiency and the shift to low and zero emission transport modes.

Commit to 100% sales of zero emission vehicles (ZEVs) for new light-duty vehicles by 2035, and by 2040 for new heavy-duty vehicles, at the latest, with clear interim targets to support progress towards these goals.

Adopt coherent policies across transport, energy and the built environment, and Work with business to accelerate investment in and deployment of infrastructure for reliable and seamless electric vehicle (EV) charging that is accessible to all.

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A Pathway for Industry

Heavy industries are responsible for over 30% of global emissions and roughly 37% of global energy consumption, with steel, cement and chemicals being the top emitting sectors and among the most challenging to decarbonize. Decarbonization must address these sectors’ reliance on fossil fuels for feedstock and heat, and the need for their products to continue to meet stringent quality criteria. Inter-connected decarbonization strategies exist: energy efficiency and broad deployment of low carbon heat; increasing demand for zero carbon materials and products; and deployment of circular economy approaches; innovation and mass scale deployment of zero emissions production processes. With the right policy support, these strategies are economically and technically feasible as well as offering other social, public health and environmental benefits in addition. 

Business calls on governments to:

Put sectoral decarbonization roadmaps in place with interim targets and milestones to accelerate transition in the 2020s towards net-zero emissions by 2050 at the latest.

Facilitate financing and R&D, demonstration and deployment of zero emissions technologies to accelerate public and private sector investment and drive innovation at scale.

Implement policies and regulations to overcome the green cost premium that businesses face for production of low-CO2 steel, cement and chemicals.

Drive demand for low carbon and circular materials via sustainable public procurement policies and creation of lead markets.

Combine ambitious carbon pricing instruments with focused regulatory action to drive and de-risk investment in hard to abate sectors, with provisions for preventing unfair competition and carbon leakage.

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A Sustainable Built Environment

The Built Environment is responsible for almost 40% of global energyrelated GHG emissions and 50% of global resource extraction Its demands on natural resources accelerate climate change, and inefficient buildings negatively impact human health and wellbeing. Governments must target a 50% reduction in CO2 emissions from the built environment by 2030 in order to reach net zero by 2050. They must implement bold national and local roadmaps and policies that address whole life carbon emissions of existing and new assets. Radical collaboration with all stakeholders will be critical to accelerate action in this decade to achieve the paradigm shift to a net zero and resilient built environment.   

Business calls on governments to:

Develop national and sub-national decarbonization and resilience roadmaps aiming to address whole lifecycle emissions and promote multi-stakeholder collaboration with cities, regions, businesses and civil society actors to accelerate action.

Implement mandatory, performance-based building codes and planning standards addressing whole life carbon and lifecycle emissions for new buildings as well as major refurbishments, as well as measures to enhance building resilience.

Increase deep renovation rates of the existing building stock to 3% per year by 2030 and beyond, focusing on heating and cooling systems, insulation and building materials.

Establish data tracking standards and systems to track and assess progress towards decarbonization and reduction of lifecycle emissions.

Align public procurement standards to incentivize low carbon solutions along the value chain and build zero carbon, circular and resilient buildings and infrastructure.

Accelerate deployment of public funding for innovation and R&D projects, for workforce development and to de-risk private sector investment in the built environment.

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Protecting Land and Nature

Biodiversity loss and environmental degradation are both accelerated by climate change and exacerbate its impacts. Addressing climate change strengthens nature’s ability to absorb carbon and adapt to climate impacts. Nature-based climate solutions only receive 5% of global public finance dedicated to mitigation measures, despite the potential to abate 30% of greenhouse gases by 2030 to achieve a 1.5°C pathway. The interlinked crises of climate change and biodiversity loss are most effectively solved if addressed in tandem. Resilient economies and thriving businesses also rely on nature as more than half of the world’s GDP is moderately or highly dependent on nature. 

Nature-based climate solutions should promote measures to protect, improve management and restore forest and other biomes aligned with the Natural Climate Solutions (NCS) mitigation hierarchy. Initiatives should strive to achieve positive impacts on biodiversity and contribute to food security,  livelihoods, and other ecosystem services. 

See our integrated policy recommendations with Business for Nature for further detail. 

BUSINESS CALLS ON GOVERNMENT TO:

Deliver Nationally Determined Contributions (NDCs) by COP27 that establish bold targets for food systems transformation and reflect the ambition of the Glasgow Leaders Declaration on Forests and Land Use on Forests and Land Use to reverse forest loss and land degradation by 2030.

Eliminate commodity-driven deforestation by 2025 through trade policies developed in collaboration between producer and demand-side countries.

Recognize the important role of public subsidies in harmful land-use change and ecosystem degradation by reforming $520 billion in agricultural subsidies by 2030 through alignment with climate and biodiversity objectives.

Ensure 30% of international climate finance is channeled to high quality, nature-based climate solutions by 2025 to reflect their potential to provide 30% of the emissions reductions and removals needed to limit global warming to 1.5°C.

Align climate policy with the Convention on Biodiversity by integrating targets within (NDCs), National Adaptation Plans (NAPs) and National Biodiversity Strategies and Action Plans (NBSAPs) to ensure policy coherence and adequate finance supports the transition towards a nature positive world by 2030.

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