The Role of Governance in the Development of Long-term Strategies
The Paris Agreement laid the groundwork for a new era in which climate action will be central to national and international policies. Reaching the agreement’s long-term goal will require in turn that the Parties develop long-term strategies (LTSs). In other words, if Article 4.19 hadn’t existed, the signatory countries would have had to invent it!
Implementing LTSs is thus essential to implementing the agreement. These strategies, which will underlie the development of each sector by aiming for carbon neutrality, will be based on trajectories updated every five years in nationally determined contributions (NDCs). At the international level, the aggregation of NDCs will make it possible to assess the degree to which the contributions determined by countries individually converge toward the collective goal of the Paris Agreement.
These strategies thus can become tools for facilitating international dialogue. Sharing them at the international level will constitute a collective exercise in evaluating each Party’s action, avoiding nonresiliant investments, and determining needs, new opportunities for investment, innovation, or capacity building. It will also be a way to maintain engagement and nurture the trust and solidarity created with the signing of the agreement.
It is clear, however, that these strategies will vary in their strength and ambitions and will be shaped by the political, economic, and social situation of each country. The success with which they are implemented will also depend on political leadership, institutional organization, available legal tools, financial and fiscal policies, and the accompanying plans for social transition.
Although these strategies are cornerstones of implementation of the Paris Agreement, they are often difficult for decision makers to grasp, in both developing and developed countries. These difficulties result from the strategies’ time frames, with their associated uncertainties and dependence on international ground rules. The reforms the strategies entail are often unpopular and not always in step with politicians’ agendas. The key to their success thus lies not only in good governance with respect to national and local policy but also in leadership and good governance at the global level, that is, on an integrated and systemic implementation plan that takes into account the imperatives of economic and social transition.
Long-term low carbon strategies are in fact transformations of conventional economic development strategies in a new generation of development policy. These policies bring together economic actors and factors with environmental and climate ones and link social and human imperatives to create greater sustainability.
Long-term strategies and existing sectorial strategies
Long-term low carbon strategies cannot be established by simply erasing existing development strategies and plans. Such strategies must be developed based on existing sectorial strategies that have been strategically assessed, then analyzed and revised based on the goals of carbon neutrality, resilience, and sustainability.
The first step is strategic assessment, sector by sector in collaboration with the relevant ministry or authority. Development scenarios are then developed at all administrative levels (services, directorates, general secretariat, etc.) before being presented to political leaders.
The development of these scenarios gives political leaders tools to understand trends; efforts required at the institutional, legal, social, and financial levels; as well as the engagement needed from operators and civil society. Dialogue must then be organized by the sector with the different operators, legislators, and trade union representatives, as well as civil society, to ensure the buy-in of all partners. If the revision or review of the sectorial strategy entails significant social impacts, a social transition plan is developed and validated by the sector’s federations and unions. The different sectorial strategies are then collected, prioritized, and presented as part of a national long-term strategy, first to the cabinet and then to the parliament. Based on the level of transformation involved, debate is organized at the national and regional levels to facilitate complete buy-in from all political and social forces in the country.
Governance: A must for LTS development and implementation
The process of developing and implementing LTSs involves numerous governmental and nongovernmental actors, as well as civil society. The number of these actors and the need to mobilize and coordinate them are key factors of both the development and implementation of LTSs.
The development and implementation of LTSs thus requires a participatory and local approach, because in this process all actors become essential players. All sectors and jurisdictions must be involved and cognizant of the broad transformation that the Paris Agreement entails for modes of production and consumption as well as for society as a whole. The development of sectors and jurisdictions in a participatory framework at the national level will encourage buy-in by nongovernmental actors to the global transformation, as well as their dialogue with the government on the institutional, legal, socioeconomic, financial, and fiscal reforms needed to enable them to anticipate, innovate, and invest—in other words, to trust.
The cross-cutting nature of these strategies requires a meticulous effort to reconcile public policies, which will save time, increase effectiveness, avoid duplication of effort and investment, and often avoid investments that are unsustainable. In these early stages of LTS development, the participation of the ministry of finance is also vital to the adoption of an optimal development scenario (that is, a technically valid and economically viable one).
The development of the national low carbon emission strategy must therefore be led by an institution invested with cross-cutting coordinating authority but also with the power to involve all actors, to facilitate dialogue, and to manage interests and conflicts. Few countries in the world today have climate agencies with these powers.
Whatever the position of such agencies in their governmental hierarchy, climate leadership must come from the government’s supreme authority, and that leadership must be implemented within the executive branch by the agency in charge of climate issues (usually the ministry of the environment). This often requires cabinet reorganization, as the French government recently carried out.
At the operational level, the head of the government establishes under his or her authority a commission facilitated by the ministry of the environment to examine the cross-cutting aspects of the strategy, pursue the convergence of policies, and prioritize the national intervention plan.
At this stage, two questions arise: (1) Are political leadership and power sufficient to impel these strategies? (2) Is their development at the national level sufficient to ensure their implementation? The answers to these questions can be summed up in three words: consistency, financing, and simplification.
Consistency is a key factor in the successful implementation and sustainability of long-term policies.
At the national level, consistency must be the rule in implementation of development policies, which must be rethought from a fiscal point of view, as well as from those of funding and improving the general business environment, in order to accelerate the global transformation called for in the Paris Agreement.
At the international level, developed countries, international organizations, and trade and financial institutions must work for the adoption and implementation of consistent international rules (especially in terms of international financial flows and fiscal matters) in order to accelerate worldwide development and implementation of sustainable, low carbon emission LTSs. In the context of bilateral relations, developed countries must also seek to make all the programs and projects that their development agencies cofinance consistent with worldwide sustainable, low carbon emission goals. The Paris Agreement, with its goal of carbon neutrality, must be one of the baselines to which all international, regional, and national trade agreements refer in terms of not just trade but also investment and business accountability.
The lack of a basic policy linking the fight against climate change, the transition to a green economy, and world trade limits application of the Paris Agreement. Similarly, the near complete absence of the World Trade Organization (WTO) from the process of negotiation and engagement is unhelpful, considering the key role that trade plays in the dissemination of green technologies and services and renewable energy sources by creating mass markets through lower prices, and systematically as an economic stimulus.
Long-term strategies must incorporate the transformation of world trade into green trade. Although this transformation of course includes the progressive decarbonization of transport, we must go further and build climate into the institutional architecture of world trade, for example by supporting the successful conclusion of sectorial negotiations on environmental goods and services. We also must ensure that climate clauses become constitutive elements of bilateral and multilateral trade agreements, for instance by connecting the level of certain trade preferences in free trade agreements to the level of ambition and verified results in beneficiaries’ implementation of the Paris Agreement.
Access to financing and support for SMEs
I will not go into detail here on the essential nature of financing for acceleration of Paris Agreement implementation; this topic has been the focus of many reports. I do wish, however, to underscore the importance in this context of small and medium-sized enterprises (SMEs).
In all countries, SMEs employ the greatest number of workers and create the most jobs. Supporting or encouraging the development of a dynamic fabric of SMEs, well distributed throughout the country, is vital to reducing unemployment and, especially in emerging or developing countries, to managing population growth, all the more so if we want that growth to be accompanied by the realization of sustainable development goals (SDGs). No long-term strategy can ensure low carbon emission growth and an acceptable level of human development without policies that holistically take into account the needs of SMEs. Many developing countries are having difficulty achieving the goals of their national SME plans. The strengthening of international cooperation in favor of SMEs must be a priority in strategies for implementing the Paris Agreement.
Simplification of bureaucracy
In most countries, red tape, bureaucratic complexity, and the lack of tools to guide and facilitate people’s interactions with government agencies constitute permanent obstacles to initiative, business creation, and general economic prosperity. The digitization of human activities offers the twin advantages of easing procedures and decarbonizing bureaucracy by reducing the use of paper, ink, and other physical resources. Digitization must be part of long-term strategies, for example through the goal of 100 percent coverage of the population by 2050, because the global transformation called for in the Paris Agreement and the SDGs puts significant pressure on all aspects of human activity. The energy, costs, and time saved in bureaucratic procedures would unchain individual and collective initiative, accelerate the application of public policies, and further goals for sustainable growth.