Next wave of opportunities for climate action are in agriculture and forestry

Policy Pulse - 15 August 2019 - George Anjaparidze

Last week, the International Panel on Climate Change (IPCC) released a report on land. Highlighting that land is a critical resource. The report indicates that about 23% of all human-caused greenhouse gas (GHG) emissions are attributed to land, or those related to agriculture, forestry and other land uses. However, agriculture and forestry are even more important to climate policy than their relative share of global GHG emissions. The next wave of opportunities for scaling-up climate action are in agriculture and forestry.[i]

Achieving the current targets communicated through Nationally Determined Contributions (NDCs) implies reducing the 2030 GHG emissions trajectory by 4.8 Gt CO2e or about 8%.[ii] Countries can largely achieve this trajectory by focusing on win-win solutions, where GHG abatement measures create cost savings. Within the basket of such cost-effective measures, agriculture and forestry can contribute about 11% of all GHG abatement potential. However, if countries start raising the level of ambition, they will increasingly need to rely on agriculture and forestry. A more “ambitious NDC” scenario that targets reducing the 2030 GHG emissions trajectory by 9.6 Gt CO2e or about 16%, would result in 49% of all cost-effective abatement potential to be in agriculture and forestry (see chart above). In fact, nearly 70% of all additional cost-effective abatement measures, beyond those in the NDC scenario, would be in the agriculture and forestry sector.

Even the more “ambitious NDC” scenario, presented above, falls short of the effort needed to limit global warming to 1.5° to 2°C. The “1.5° to 2°C” scenario would imply reducing the 2030 GHG emissions trajectory by 27 Gt CO2e or about 44%. Under this scenario, agriculture and forestry would also be a major source of abatement potential, with over 33% of all cost-effective abatement measures.

Targeting agriculture and forestry for GHG emission reductions is also attractive because approaches used generally rely on proven technology and are relatively less capital intensive.[iii] This means that these measures are more conducive to be taken up in developing countries and can more rapidly be deployed at scale. In many cases, there are also significant co-benefits that could be generated beyond climate change mitigation.

The IPCC report on land concludes that, despite human activity, this sector managed to on net remove 6 Gt CO2e from the atmosphere between 2007 and 2016. Increasing international support for mitigation measures in agriculture and forestry, channeled through development banks and others, can serve as a catalyst to realizing potential opportunities. Companies involved in producing agricultural products and managing large areas of land would stand to benefit from this additional support. The world as a whole would also benefit. Agriculture and forestry offer an opportunity to scale-up action on climate change by leveraging a natural advantage.

[i]SeeMcKinsey analysisof global GHG abatement costs (version 2.1).

[ii]See earlier analysis from Veritas Global Paris Agreement: the inconvenient gap between ambition and reality

[iii]SeeMcKinsey analysisof global GHG abatement costs (version 2.0).

About Veritas Global: Our vision is to have a positive impact on the world through truthful advice informed by robust analysis. We are a premier provider of tailored solutions on climate change, international conflict economicsand infrastructure. 

#climateaction #climatechange #forestry #agriculture #economics

Paris Agreement: the inconvenient gap between ambition and reality

Policy Pulse - 17 April 2019 - George Anjaparidze

Key policy messages:

• Nationally Determined Contributions (NDCs) represent an improvement in the emission trajectory but fall short of achieving the temperature goals of the Paris Agreement

• There is an immediate need to scale-up support, particularly by OECD countries, to fast track NDC implementation in developing economies

• This will enable countries to implement their NDCs sooner and create a conducive environment to raise their ambitions as part of the global stocktake

The IMF/World Bank Spring meetings, a gathering of Finance Ministers and Central Bank Governors, concluded on 14 April 2019. Climate change did not feature prominently on the agenda, despite an immediate need to further scale-up efforts to meet the Paris Agreement temperature goals.  This places even more pressure on the UN Climate Action Summit in September to accelerate support for climate action.

The Paris Agreement is a major milestone in international efforts to address climate change. It strengthened the political ambition to hold the increase in global average temperature to well below 2°C and pursue efforts to limit the increase to 1.5°C above pre-industrial levels. Crucially, it also broadened the climate mitigation efforts in developing countries.

The Paris Agreement is a bottom-up policy framework where each country independently determines the appropriate level of mitigation effort. Through Nationally Determined Contributions (NDCs) countries have communicated their planned actions, which taken together represent an improvement in the global GHG emission trajectory. However, it falls short of the trajectories that would be consistent with achieving the Paris Agreement temperature goals.

The UNFCCC estimates that compared with the emission levels under the least-cost 2°C scenarios, aggregate emission levels resulting from the implementation of NDCs are expected to be higher by 15.2 Gt of CO2 equivalent in 2030 (See Chart). Our assessment indicates that the NDC emission trajectory is most consistent with about a 3°C warming. This means governments need to further scale-up efforts to achieve the Paris Agreement temperature goals. 

The global stocktake, scheduled for 2023, aims to assess the collective progress towards achieving the long-term goals of the Paris Agreement. The outcome of the global stocketake is aimed to inform governments in updating and enhancing their actions for addressing climate change. In the absence of progress in implementation of NDCs, it will be unlikely that governments scale up actions. However, fast tracking NDC implementation can build confidence in the ability of countries to achieve their NDCs and create a more conducive environment to raise their ambitions.

Therefore, OECD countries need to immediately scale-up their support for NDC implementation in developing countries. In particular, they should increase their support for initiatives that target NDC implementation, such as the Asian Development Bank`s NDC Advance platform. To further build confidence, they need to ensure a successful replenishment of the Green Climate Fund and scale-up support through bilateral agencies, as has been done by Agence Française de Dévelopment.

In the absence of an immediate scale-up in support for NDC implementation, the global stocktake will likely be a frustrating affair and the Paris Agreement goals are unlikely to be met.

About Veritas Global: Our vision is to have a positive impact on the world through truthful advice informed by robust analysis. We are a premier provider of tailored solutions on climate change, international conflict economics and infrastructure. 

#climatechange #economics #finance #springmeetings2019