ENCAR: Why we need economy-wide national climate action records
Recent moves by the U.S. to roll back climate monitoring, risk reduction, & solutions highlights why we need economy-wide national climate action records, with local detail & investable priorities.
The Paris Agreement calls on all Parties (the countries joining it) to publish Nationally Determined Contributions (to the global climate crisis response) every five years. The first were finalized in 2015, alongside the Paris Agreement; the 2nd round came in 2020 and 2021, some delayed by COVID; the third round are being released this year, ahead of the 30th round of annual UN Climate Change negotiations (the COP30) to take place in November in Brazil.
Whether polluting interests like it or not, these clean economic development strategies are pointing the way to a future in which innovation builds value by eliminating pollution, finance learns to value and protect nature, ecosystems, watersheds, and public health, and trade agreements will be designed to ensure more people benefit in ways that do not produce far-reaching preventable harm. Those nations that lead will shape the most advanced technological period in human history; those that ignore these signals will condemn their people to unnecesssry hardship and health risks.
The Paris Agreement does a number of things that improve the potential for high-value climate cooperation. It requires all nations be a constructive part of the global climate solution, and rewards leadership by:
Aligning both international and domestic financial flows with climate action;
Requiring all nations to consider science and evidence, rather than the preferred revenue-generating plan of the government of the moment;
A stepwise increase in local, national, and global ambition, so no one nation is left carrying the burden for all;
Cooperative mechanisms and incentives to induce high-polluting developing countries to become climate leaders;
The opportunity for the US to boost manufacturing, exports, financial stability, and geopolitical influence, by leading the technological transition.
One of the reasons the Supreme Court of the United States upheld the Paris Agreement as binding without Senate approval was that it provided numerous benefits to the United States under the Climate Convention, which had been formally approved and ratified and under Article VI of the Constitution is now binding Constitutional law. Adding the Paris Agreement would make it easier for the U.S. to honor that facet of Constitutional law, and to derive far-reaching benefits to human health and sustainable economic prosperity.
That the government of the moment seems intent on promoting climate pollution as a national strategy—in violation of domestic and international law—does not change the fact that the United States is legally and Constitutionally bound to act to reduce climate-related risks. The International Court of Justice opinion released in July clarifies this, not only for the US but for all nations. The Court made clear the legal duty to act to reduce climate risk is rooted in:
specific treaties and related implementation agreements;
customary international law;
fundamental human rights, which transcend written law and are irreducible.
Whether the government of the United States (USG) acts appropriately will be a matter for the Courts to address. The answer to that question might be determined, at least in part, by the degree to which the country acts to reduce climate pollution and related climate risks and impacts, at home and abroad. This question opens the possibility of mapping out an Economy-wide National Climate Action Record (ENCAR), to serve as a general assessment of the nation’s contribution to the global climate crisis response.
Some of the elements of an ENCAR assessment would be:
Federal subsidies for fossil fuels
Rate of increase or decrease in fossil fuel production and related emissions
Federal subsidies for clean energy
Rate of increase in clean energy deployment and production
Corporate tax breaks, acting as indirect subsidies
Infrastructure investments, acting as indirect subsidies
Changes in federal policy and related impact on the country’s climate disruption footprint
Most recent NDC
Climate-related effects of government operations—energy, infrastructure, transport, land use, and research
State-level climate and decarbonization commitments and actions
City-level climate and decarbonization commitments and actions
Projected effect of permitting reforms—increasing or decreasing polluting vs. non-polluting energy
Agriculture, land use, technology, and infrastructure
Trade-related trends and international effects
Finance-related trends and international effects
International actions providing financial, technology, or disaster relief and recovery support
This is a preliminary look at how something like an Ecomomy-wide National Climate Action Record might be quantified. This list is by no means comprehensive. It leaves out some key ingredients we would want to see, such as:
an assessment of labeling standards and practices, and other measures of transparency and verifiability;
a hard-wired assessment of emerging financial instruments and portfolio management approaches, accounting for climate vulnerability, risk, impact, cost, and secondary effects;
multidimensional fiscal resilience measures for cities, counties, and states;
leverage for individual consumers, households, and small businesses to onboard new climate-resilience measures and technologies.
These are harder to measure with data that is already in circulation and will need time to develop to the level of precision needed to provide accurate assessments. What they can tell us, however, is how well a country is doing in comparison to others, by advancing work in these areas.
It is also necessary to note that a truly useful Economy-wide National Climate Action Record would consider not only decarbonization actions and effects but also a nation’s record on moving to reduce harm through adaptation and resilience measures, impacts on nature and biodiversity, at home and abroad, and the corrosive or uplifting effects of its treatment of other nations.
The degree to which a wealthy, high-pollution economy enhances or undermines its own ability to be a valued partner to others, by succeeding or failing in creating fiscal space and multilateral and private investment capacity, by reducing vulnerability at home, is also relevant. Such insights would play a critical role in shaping the overall fiscal resilience assessment for the country as a whole.
Finally, we have to acknowledge that ENCAR calculations will have to be, by their nature, evolving. Wherever possible, realtime information can help to add precision, and make ENCAR calculations more locally actionable and relevant to policy choices, legislative efforts, and court proceedings.
For many decades now, we have heard one or another version of the argument that without “burdensome regulation”, the private sector would naturally produce the solutions needed to reduce pollution and mitigate climate-related risk. That has not happened, so the current lapse in proactive federal regulation creates a need for ENCAR assessment and for related efforts to translate climate risk, resilience, transition, and transparency insights into new adaptive management capacity.
A counter-productive federal administration will undermine overall national progress, but the nation is not just the federal government. The American people, American businesses, and other nations working with the U.S., at any level, deserve to know what the real status of progress is, and where climate-related value can be found and expanded. All nations can benefit by developing, detailing, and activating ENCAR assessments, to identify more inroads for sustainable investment and more opportunities for value-building job creation.
Follow news related to ENCAR assessments and multilateral climate cooperation at the Climate Value Exchange (climatevalue.net).