Expert Perspectives

The Relevance of Long-Term Planning to Achieving Climate Goals

The global community witnessed a landmark decision in Paris in December 2015, when the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) agreed to combat climate change and strengthen the actions and investments required to achieve a sustainable low carbon future. The central aim of all such actions is to hold global temperature rise to below 2°C above preindustrial levels by 2100 and pursue efforts to limit the increase to 1.5°C. Among other things, the agreement mandates that Parties develop and submit their efforts through nationally determined contributions (NDCs). Countries are expected to submit updated NDCs every five years, reflecting their higher commitments and ambition to achieve the goal set by the Paris Agreement.

To date, 179 of 197 Parties have ratified the Agreement. Although this is a positive development in the global community’s fight against climate change, a growing body of recent research indicates that countries’ current climate policies and proposed efforts may not be adequate to achieve the Paris targets. At present, the global economy is driven by an energy system heavily dependent on fossil fuels, which are estimated to account for 80 percent of total primary energy consumption. Fossil-fuel-based emissions are responsible for 75 percent of global greenhouse gas emissions. If the current trend continues, it is estimated that the world could be 4°C warmer than preindustrial levels by 2100, causing irreparable damage.

Ramping up climate actions to limit global warming is therefore urgent. Most countries have used short- and medium-term planning and charting as required through the NDCs. However, the absence of long-term strategic planning may prevent countries from appropriately exploiting future technologies and other solutions. Moreover, the missed opportunity and long-term costs arising from delayed intervention will outweigh the cumulative short-term benefits.

Developing a long-term strategy to provide energy security and energy access, while transitioning the energy system and meeting Paris Agreement goals, is challenging, however. Article 4 of the Paris Agreement requires all countries to prepare midcentury, long-term strategies to bring greenhouse gas emissions down significantly. A transition to an environmentally friendly climate system can be achieved with careful long-term planning, enhanced international cooperation, and a sustainable flow of funding, among other factors. Often it is argued that planning itself will eventually attract enough interest to ensure that other factors are implemented, thus presenting opportunities for economic development, promoting progress and equity in society, and restricting further deterioration of environmental quality.

The relevance of long-term planning to meeting the goals of the Paris Agreement

NDCs are not an end in themselves. Rather, they are a starting point for the mainstreaming of policies, including innovative design of implementation strategies in association with different stakeholder organizations so that the desired targets are achieved well in advance and create enough incentives to set more ambitious targets in the future.

Long-term planning creates opportunities to effectively design and implement the future NDCs that will be required for a continuous effort to contain GHG emission and address larger climate goals. Depending on the target dates countries set for their goals with respect to cumulative impact on global warming reduction (say, for example, 2030), future or long-term planning (i.e., 2050 and beyond) enables countries to tap into and possibly leapfrog intermediate solutions that otherwise could have been costly both financially and in terms of the threat to the climate.

The other benefit of long-term planning is that it promotes the formation of partnerships. The outcomes of those partnerships can be new markets for clean technologies and sustainable products, opportunities for public and private financing of green- and brownfield investments, and so on. Long-term plans clearly demarcate countries’ climate agendas as an issue beyond politics, institutional rigidities, and the economic environment. This enhances transparency, strengthens trust among nations, and provides a source of encouragement to other countries. Further, future negotiations become more effective when consensus is built during the interim phase.

Technology and policy choices for long-term planning

Reported NDCs have mostly used short- to medium-term interventions, which indeed are a good starting point. Since transition to cleaner and low carbon energy will go a long way in reducing the carbon intensity of gross domestic product, countries have invested in assessing renewable energy potential and identified timelines for deploying these energy sources. The corridors of such sources have been mapped for better planning and to facilitate land acquisition, the development of a grid for power evacuation, the generation of parks that can create incentives for developers, thus resulting in lower bids and cheaper available power. The Indian government launched an ambitious renewable energy program in 2010, with the aim of deploying 20,000 megawatts (MW) of grid-connected solar power by 2022. In 2015, realizing the potential and the substantial benefits of renewable energy deployment, India further revised its target for grid-connected solar power projects from 20,000 MW to a new goal of 100,000 MW by 2022. Promoting energy efficiency is also key to achieving climate goals. Increasing numbers of public and private sector initiatives promote the efficient use of heat, electricity, and transportation fuels, efforts that will save money and reduce costly energy imports. Pricing has a significant impact on human consumption behavior. While higher oil prices are hurting consumers and putting pressure on governments to introduce subsidies, interventions are being carefully designed and implemented to ensure that the benefits are passed on to the poor and to prevent leakages and exploitation. Consumer awareness is the force driving this transition.

Thinking on long-term strategies is nascent and mostly confined to a few countries. For example, Germany has set the goal of reducing GHG emissions by 95 percent below 1990 levels by 2050. Japan aims to achieve the 80 percent reduction of GHG emissions by 2050, as a long-term target while pursuing both global warming countermeasures and economic growth. Further, the European Union roadmap suggests that the region could cut its emissions to 80 percent below 1990 levels through domestic reductions. Canada’s long-term plan aims to reduce emissions by 80 percent or more below 2005 levels by 2050, and Mexico plans to reduce emissions by 50 percent from 2000 levels.

Long-term planning requires a blend of strategies that stimulate breakthrough innovation in science and technology to promote low carbon processes and products, support policies that steer the economy toward climate-friendly growth trajectories, and, most important, encourage consumer preferences and behavior that supports sustainable consumption and lifestyles. Such an integrated document needs to be a living document, one that will evolve over time as priorities and parameters change. It should be able to align short-term and medium-term goals, as mostly reflected in NDCs with long-term targets. Fact-based monitoring will enable the detection of progress and indicate when and where course correction is necessary. While a nodal agency needs to be responsible for maintaining a repository of data across sectors on energy deployment, usage, emission profiles, and so on, this needs to be accompanied by a system for timely collection and periodic updates.

Countries need to have standardized climate models that assess the implications of continuous policy decisions and their impact on the overall emissions inventory. For countries with limited capacities, in terms of knowhow and computing facilities, strengthening North-South and South-South cooperation will become essential. Periodic reporting and free public debate will help modify such models through the creation of scenarios and long-term projections that in turn will lead to informed policy choices. Such activities can create a unique platform for academia and policymakers to communicate, exchange, and work together in making information-based decisions.

Disruptive changes in low carbon technologies would include promoting public and private sector research and development in low-cost energy storage, closed-loop recycling, new energy carriers like hydrogen, biofuels (e.g., algal and other strains that have no implications for food security), future power electronics, and carbon capture and storage, as well as the use of these tools. Non-energy-based emissions can be reduced by making greater use of the carbon sinks in forests (afforestation) and land and as well as by reducing nitrous oxide, methane, and fluorine-based gases from agriculture, waste, and industry. Of course, appropriate risk assessment of these technologies will be needed to promote their acceptance.

Large capital investment will be required to facilitate such transitions. For low carbon economic growth, the global investment required between 2015 and 2030 would be more than US$90 trillion. Long-term sustainable finance will require considerable new thinking to improve existing financial products. At the same time, new hybrid financing models will need to be developed that reflect distributed risks, requiring the participation of government, the private sector, and multilateral development banks. Making the transition as cost effective as possible will require carefully designed public policies, strengthened by stakeholder consensus about the overall direction of change, as well as a greater appetite for risk.

Changes in consumer behavior can lead to big reductions in emissions, particularly in areas such as transport, food, housing, and appliances, curbing energy use and the carbon footprint along the life cycle. Countries should pursue a significant transition from personalized mobility to a reliable mass transit system by the middle of this century. For example, Singapore plans to increase use of public transport, particularly during peak hours, from its current level of 65 percent to 75 percent by 2030 and to 85 percent by 2050.

A major effort should be made to replace household electrical equipment with new efficient equipment. The process can start simply, with lighting systems, heating and cooling equipment, and other consumer durables addressed largely through short- to medium-term interventions. The objective should always be to improve existing products and bring new ones online. Standards for new products will be crucial to enhancing consumer acceptance and demand. Greater demand will create economies of scale, thereby reducing prices over time. Since industries are major consumers of different forms of energy, energy efficiency targets need to be phased in to reduce industry resistance and gradually cover all categories and types of industries.

To achieve climate targets, effective long-term strategies will need to send clear signals to economic agents and clearly understand their expectations. At the same time, policies and interventions must provide flexibility to economic actors, thus encouraging acceptance and a more holistic and inclusive transition. Long-term aspirations need to be reflected in interim sectoral targets and action plans. Finally, the targets and effective path to this transition need to withstand all the political cycles that countries will experience in the future, a resilience that will only come through awareness, dialogue, and the building of consensus.

All the interpretations and findings set forth in this expert perspective are those of the author alone