Climate Action for Today and Tomorrow: The Relationship between NDCs and LTSs

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Introduction

Climate change is already wreaking havoc on communities and ecosystems around the world, as they experience heat waves, changes in rainfall, forest fires and more intense storms. The impacts are the result of only 1 degree C (1.8 degrees F) of warming over pre-industrial levels. If we don’t change course, the world will enter uncharted territory, as global average temperatures increase by 3 degrees C (5.4 degrees F) or more by the end of this century.

Recognizing the tremendous gap between where greenhouse gas (GHG) emissions are headed and where they need to be to stabilize the climate at a relatively safe level, countries joined the Paris Agreement to step up climate action. The Agreement contains several mechanisms to raise the ambition of countries’ commitments to better align with the goal of keeping warming well below 2 degrees C and ideally 1.5 degrees C. Chief among these are (1) nationally determined contributions (NDCs), which are countries’ commitments to reduce emissions and strengthen resilience, and (2) long-term strategies (LTSs) that will guide countries’ transitions to a low-carbon, climate-resilient future by 2050.

In 2020, five years after its 2015 signing, the Paris Agreement faces a critical test: for the first time, countries are expected to update or communicate new NDCs and to submit long-term strategies. While NDCs operate on five-year cycles and currently extend roughly through 2025 or 2030, and LTSs involve planning to mid-century, these two different planning tools are closely related. NDC enhancement – whether it involves new or updated NDCs — should be pursued with a country’s long-term goals in mind, reducing the costs and challenges of transformation to a zero-emissions, climate-resilient society.

Yet few countries appear to be pursuing their long-term and mid-term planning in a coordinated manner, developing both enhanced NDCs and LTSs for 2020. Several factors could be at play. Given limited time, staff and financial resources, officials may be overwhelmed by the tasks of updating the NDC and developing a long-term strategy by the end of next year. Their efforts, and resources to support them, could compete with one another, when instead long-term planning ideally would inform the NDC. Officials in countries that don’t yet have an LTS may wish to prioritize developing one, but they may not plan to develop it in time to inform their NDC in 2020. Alternatively, because an LTS would need to be developed from scratch, updating the NDC may be seen as a lighter lift. Some countries see a benefit of deliberately separating the NDC and LTS development processes, so they can adopt visionary goals in the LTS that are unconstrained by today’s political pressures and urgent problems.

Recent elections in the United States, Australia and Brazil have demonstrated how fragile progress on climate action can be. Political polarization and lobbying by vested interests can scuttle technocrats’ best intentions for ambitious, effective climate policy. While this challenge is not specific to NDCs and LTSs, the time horizon that these documents seek to address makes it especially important for countries to consider how NDC enhancement and LTS development – like climate policy writ large – can be pursued in a manner that outlasts political shifts.

Some countries’ experiences offer clues on how to increase policy durability. For instance, the UK has developed an independent Climate Change Committee (CCC), which advises the government in target setting and has remained sheltered from party politics. Mexico has adopted long-term climate targets in legislation, which is more challenging to overturn than other policy vehicles. That said, there are no easy, universally applicable answers. Australia established a body similar to the UK’s CCC, but it did not succeed in protecting climate legislation. It would be naïve to claim that aligned NDCs and LTSs on their own will counter challenging political tides. We propose aligning NDCs and LTSs as part of a comprehensive approach to climate policy that tackles realpolitik head-on.

This commentary explores how NDC enhancement and development of long-term strategies can inform one another, while exploring the rationale for coordinating the two processes and addressing the tensions and tradeoffs that government officials may encounter. It offers options for delivering on the benefits of addressing the NDC and LTS planning processes together, including how target setting, data collection, modeling and other processes can be conducted in a manner that benefits both NDC enhancement and the development of an LTS.

The aim of this commentary is to facilitate alignment of enhanced NDCs and LTSs and the efficient use of scarce resources to develop these two critical plans in a synergistic manner. Alignment of NDCs and LTSs would ensure that climate action in both documents are mutually coherent, based on common data, common or comparable modeling and can be achieved with the same development pathway. Likewise, alignment would ensure that short-term actions are not locking in a trajectory that makes long-term goals challenging or impossible to meet; instead the NDC would facilitate the achievement of the LTS’ development, decarbonization and resilience goals.

The primary audience for this commentary is government officials charged with updating the NDC and developing the LTS. A secondary audience is those supporting government, as well as civil society and journalists following NDC enhancement and LTS development processes. While we do not have many examples of how NDC enhancement and LTS development can be undertaken together, as most countries are just embarking on such processes, we hope this commentary will help identify the benefits of aligning the two processes and the options for doing so.

Updating Nationally Determined Contributions

NDCs are countries’ commitments to international climate action, demonstrating how countries are willing to contribute to the collective global goals of the Paris Agreement. For the most part, the first round of NDCs targeted 2025 or 2030. Most NDCs contain economy-wide quantified emissions reduction targets (for example, reduce 25% below 1990 levels by 2030), which send a signal about where a country’s emissions are headed. Many NDCs also contain non-GHG targets, such as a certain percentage of renewable energy generation or amount of forest restoration to be achieved. Most NDCs also articulate specific actions or policies they will pursue to achieve their targets. Many also contain adaptation actions and goals. If NDC implementation is successful, planning and finance ministries, sectoral agencies, local governments and the private sector will align their activities with the NDC.

The Paris Agreement establishes a cycle every five years for countries to communicate an updated NDC, which is to show progress beyond the current NDC and reflect the highest possible ambition. While countries can update their NDC at any time, the Agreement requests them to come forward for the first time by 2020. The current NDCs have different timeframes, so the specifics for communication are slightly different. Those countries with a timeframe up to 2025 are requested to communicate a new NDC by 2020. For those that have a timeframe up to 2030, they are requested to communicate or update their NDC by 2020.

All countries are requested to continue to update their NDCs every five years after 2020, informed by a global stocktake that will assess the state of collective progress towards the Agreement and its goals.

Long-Term Strategies

The Paris decision invites countries to communicate mid-century, long-term, low-GHG emissions development strategies by 2020. To date, a dozen countries have submitted them, including seven in the G20. An LTS typically contains several elements, including a long-term vision and goals (e.g., related to sustainable development, mitigation and adaptation) and sectoral pathways for achieving the strategy’s objectives, including ensuring a just transition (Levin et al. 2018).

While long-term planning is not a new concept to many countries, the invitation to submit an LTS under the Paris Agreement challenges countries to plan for mid-century in the context of the Paris Agreement’s goals, namely a climate-resilient, zero-carbon future. The process of developing an LTS allows the government and its citizens to collectively decide what future they want for their country while meeting sustainable development priorities and safeguarding the climate (Vener et al. 2019).

How Do NDCs and LTSs Relate to One Another?

An LTS can inform near-term decisions by offering a long-term vision of where a country’s development trajectory should go. In theory, an NDC can help make that vision a reality by demonstrating a country’s commitment to short- and medium-term action consistent with the goals of its long-term strategy. Next year presents an opportunity for countries to update their NDCs in a way that brings further alignment with their LTSs.

That being said, there are real differences between the two documents. While the rationale for a coordinated approach is clear, NDCs and LTSs serve distinct functions, beyond their distinct timelines. NDCs are more closely tied to implementation than LTSs. Although some LTSs offer sectoral plans and strategies, NDCs are typically translated into detailed implementation plans given countries’ international obligation to achieve them.

Also, LTSs are voluntary under the Paris Agreement, while the Agreement states that countries shall prepare and communicate NDCs. And although there is a mandate under the Agreement for accounting and tracking and reporting progress, as well as review, towards NDCs, this is not the case with LTSs. Finally, while there is a clear means and timeline for updating NDCs, this does not exist for LTSs. Accordingly, the legal nature and accountability mechanisms for NDCs and LTSs do differ.

Benefits of Aligning NDCs and LTSs

Aligning NDCs and LTSs brings substantial benefits. First, doing so can ensure that both are mutually coherent and consistent. If they are instead treated as unrelated, distinct processes, there is the risk that they conflict with each other (e.g., the NDC spurring investments in a certain technology that may make the achievement of long-term goals more difficult). Accordingly, if NDCs take into account the long-term goals in the LTSs, lock-in of carbon-intensive, non-resilient infrastructure, technology and behavior can be avoided. Countries will cut costs by investing in appropriate infrastructure that will not need to be phased out later, designing consistent policies and sending consistent signals to the private sector to invest in climate action. The NDC could take these into account and identify what types of policy signals and targets would be necessary in the nearer term to spur such technological development.

Aligning NDCs and LTSs

Costa Rica’s Decarbonization Plan, released in February 2019, outlines 10 focus areas to achieve decarbonization by 2050, including milestones to be achieved prior to 2030. The LTS will be the basis for updating Costa Rica’s NDC, stating, “The Plan will feed the ambition and transparency system of the country and will be the basis for updating and improving our following Nationally Determined Contributions or NDCs.”

Furthermore, alignment can reduce costs and increase efficiency in the planning process. As described below, some of the underlying processes involved in updating NDCs and developing LTSs — including data collection, modeling and stakeholder consultation — could be undertaken together, where relevant.

Challenges in Aligning NDCs and LTSs

Ideally, neither NDCs or LTSs are seen as climate-specific exercises intended to only fulfill international obligations, but ones that are rooted in – and integrated into – existing development plans and policies. If this were the case, it would facilitate policy coherence between NDC enhancement and LTSs. However, too often these planning processes are not integrated into other planning processes and remain disconnected from each other.

Frequently the process of updating the NDC and developing the LTS are on completely different timelines. Different ministries, or at least different staff, may be charged with developing the NDC and the LTS, with different stakeholders involved. Sometimes targeted support may only be available for NDC enhancement – or perhaps less often for LTS development – which can starve the less-favored effort. And one document may be prioritized by leaders over the other.

Sequencing NDC Enhancement and LTS Development

In an ideal scenario, countries would design their LTSs before updating their NDCs to establish a long-term vision that would inform the formulation of national climate commitments. In practice, however, most countries developed NDCs before developing LTSs. This is due at least in part to the negotiations leading up to the Paris Agreement, in which countries were invited in 2014 to communicate their intended nationally determined contributions (INDCs), but no similar invitation was issued for LTSs until 2015. As a result, only a dozen countries have formally submitted LTSs to the UNFCCC (sometimes with multiple emission objectives), while 184 countries have submitted NDCs. For countries that lack an LTS, the timeline for developing one may not accommodate a two-step process in which the LTS is designed before the NDC is updated. Furthermore, given that countries already have submitted a first NDC, they are not starting from a blank slate, and there is likely inertia behind some of the content in the NDC which may make it more challenging to fully align with the LTS.

Depending on whether a country has an LTS, the coordination and timeline between NDC updating and LTS design may differ:

1. If a country has an LTS: This is the ideal case in which there is an established LTS (an official LTS submitted to the UNFCCC and/or other domestic long-term development strategies or long-term sectoral strategies)  and — to the extent it is aligned with the Paris Agreement’s goals – it can be used as the basis of the enhanced NDC. The long-term goals and targets, for example, can inform the choice of NDC targets and sectoral actions. In this case, NDC enhancement presents a significant opportunity to bring further alignment between short-, medium- and long-term planning.
2. If a country is in the process of developing or revising an LTS concurrent with the process of updating the NDC: This is a more challenging case because the 2020 timeline for NDC enhancement and LTS submission does not necessarily accommodate a sequential process in which the LTS is developed before the NDC is updated. And neither the LTS nor NDC enhancement process should be rushed if time does not accommodate a sequential process. In this situation, some aspects of the development process, e.g., data collection or stakeholder consultation, as described further below, may be able to be pursued jointly, depending on specific timelines. At a minimum, there should be a mechanism to review alignment on a regular basis before the plans are finalized.
3. If a country does not plan to submit an LTS by 2020 or plans to update the NDC more quickly than developing an LTS: While there are many benefits of using an LTS to inform NDC enhancement, if a country does not plan to submit an LTS by 2020 or is on a faster timeline with NDC enhancement, the NDC will need to be updated without being guided by an agreed long-term vision and strategy. In this case, it can be worthwhile to include a discussion with stakeholders, as well as pursue analysis, on how the NDC can be aligned with the necessary transitions to achieve a country’s development goals and the Paris Agreement’s climate goals. Most critical is ensuring that the short-term policies and investments advanced under an LTS do not lock in carbon-intensive technologies, infrastructure and behavior, which would make any future long-term goals challenging or impossible to meet. The lack of an LTS should not hold up the process of updating the NDC.

Soon after releasing its LTS Tile Til Eo: 2050 Climate Change Strategy “Lighting the Way,” the Republic of the Marshall Islands revised its NDC. This updated NDC links to the 2050 Climate Strategy. The revised NDC affirms GHG reduction targets for 2025 and 2030 and includes an indicative target for 2035, targets that align with a pathway to achieving net zero emissions by 2050.

Source: Enhancing NDCs: A Guide to Strengthening National Climate Plans, 2019

Processes and Options to Maximize Synergies Between NDC Enhancement and Long-term Strategies

Governance: Both NDC enhancement and LTS development will require political support, ideally from a head of state and planning or finance ministry, to ensure buy-in and steer coordination efforts. The office or institution providing political support will then typically identify and charge a lead institution with managing the process. This may be in the institution that initiated the development process (for example, a prime minister’s or president’s office), or in an institution that leads on issues related to the UNFCCC (such as an environment ministry) or a different institution altogether. In addition to a lead institution, for both the NDC update and LTS, intra-governmental coordination will be critical to ensuring that relevant planning, finance and sectoral ministries inform the process. Finally, enhancing the NDC and designing an LTS should involve consultations with stakeholders.

There are significant benefits associated with aligning processes related to NDC enhancement and LTS development. If the lead institution, coordination mechanism and/or stakeholder engagement processes are one and the same, a single process makes administrative and economic sense. For example, coordination committees, and their associated personnel, may be joined up and two separate ones – for NDC enhancement and LTS – may not have to be created. The same ministry could be charged with leading the NDC enhancement and LTS processes, rather than separate teams in different ministries. Convenings on NDC enhancement and LTS could be held jointly with stakeholders, and the associated resources required could be streamlined. In addition to saving administration costs, importantly, there would be a higher chance of the two plans informing one another.

While there are many benefits to aligning governance of the two processes, there are also challenges. It is possible that the two processes are on different timelines, with some institutional arrangements or stakeholder engagement already established. It is also possible that an institutional arrangement and/or engagement process was established for the INDC design and will be continued for the NDC update, and it may not be fitting to use the same for the development of the LTS. Also given the different nature of NDCs and LTSs, a country may not deem it appropriate to combine the two processes. Lastly, the more exploratory and transformational nature of the LTS may require different kinds of stakeholders, with issues that are outside the scope of the NDC, which more closely informs sectoral implementation.

If the NDC enhancement and LTS processes can be pursued on a similar timeline, it is worth considering whether they can be led by the same institution and whether coordination mechanisms and stakeholder engagement can be pursued jointly. There are risks that if these processes proceed in an uncoordinated fashion they could lead to conflicting policy directions.

Modeling and Analysis: LTSs and NDCs commonly rely on modeling to analyze the implications of development pathways for GHG emissions, GDP and other indicators, to weigh benefits and trade-offs, and to identify options that will remain robust over a variety of possible futures. Modeling future scenarios is subject to inherent challenges, including the possibility that underlying assumptions will become outdated, a problem that grows more acute the farther into the future a scenario extends. Nevertheless, it stands to reason that LTSs and NDCs should be informed by a common set of underlying data and assumptions, given path dependency of 2050 outcomes on the situation in 2030. For this reason, it makes sense for countries to base LTSs and NDCs on a common set of modeling scenarios and approaches. This is simpler than developing separate analyses for each exercise and then attempting to reconcile them. Countries that have already undertaken modeling studies to inform an LTS can simply use the same studies to inform their updated NDCs. Countries jointly embarking on an LTS and an updated NDC should develop a single study or set of studies to inform both processes. Countries that intend to update their NDC prior to developing an LTS should consider extending any modeling underlying the NDC update to mid-century, so that it can inform a subsequent long-term strategy. They should also consider the sectoral transformations necessary to align with the Paris Agreement goals – for example, those documented in the 2018 IPCC Special Report: Global Warming of 1.5 Degrees C – to ensure that their updated NDC does not lock out such alignment as a result of not having considered an LTS first.

Canada has drawn on a range of mostly pre-existing modeling studies to identify GHG abatement opportunities, emergent technologies and challenges to emissions reductions in the context of its mid-century strategy. Canada’s mid-century strategy is intended to inform the pan-Canadian Framework for Clean Growth and Climate Change, a 2030 plan that could also, in turn, inform Canada’s NDC. This example illustrates how the same modeling analysis can inform plans and policies on a range of timescales, helping to ensure their mutual coherence.

Source: Canada’s mid-century strategy

Target Setting: As noted above, LTSs and NDCs commonly include economy-wide, GHG reduction targets, as well as sector-specific targets. Development is path-dependent, and countries can only follow a single development pathway at a given time. Logically, then, targets in NDCs and LTSs must be set so that it is possible to achieve both via the same development pathway. Nevertheless, different considerations may inform targets for LTSs and NDCs. Because NDCs are more closely tied to implementation planning than LTSs, and are subject to international accountability mechanisms, countries may be inclined to approach NDC targets with a degree of conservatism. They will be understandably reluctant to set NDC targets that they are not sure how to achieve. An LTS, on the other hand, can provide a venue for more aspirational target setting, guided by a long-term vision of alignment with the Paris Agreement and with long-term development considerations.

Countries developing LTSs and NDCs in parallel should ideally first establish ambitious long-term goals in their LTSs, and then work backwards from those goals to adopt 2030 milestones in their NDCs. If this is not possible politically, long-term targets can still be articulated as aspirational, so that near-term political obstacles do not cause countries to lose sight of the necessary transformation in the long term. Countries that will not develop an LTS prior to updating their NDC should consider adopting sector-specific targets that align with the benchmarks laid out for key sectors, drawing for example from the IPCC Special Report: Global Warming of 1.5 Degrees C.

France’s long-term strategy establishes four-year target periods with indicative, sector-specific targets, Germany’s sets 2030 sectoral targets, Mexico defines milestones for 10-, 20-, and 40-year periods and the United Kingdom establishes a series of five-year carbon budgets out to 2032 with a view to its 2050 target (Levin et al. 2018). In the case of the UK, the budgets are informed by an independent Climate Change Commission. In some cases – for example, Costa Rica – this may involve re-visiting targets established in the first round of NDCs. Countries that have already developed long-term strategies can re-visit their NDC targets to ensure that they align with the long-term strategy and with the long-term goals in the Paris Agreement.

Source: Long-term strategies of Costa Rica, Germany, Mexico, and the United Kingdom

Prioritizing Policies and Actions: A full implementation roadmap typically is not included explicitly in either LTSs or NDCs, but policies and actions are typically necessary to achieve the visions and goals laid out in either document, and both LTS and NDCs should be developed with a view to informing sector-specific action domestically. Ideally, an LTS will include Paris-compatible pathways, consistent with limiting warming to well below 2 degrees C and ideally 1.5 degrees C, across all key sectors of a country’s economy. This could then serve as a basis to ensure that NDCs – and in turn domestic policies and actions – address all the key sectors in a timely manner. In both documents, countries can articulate clear, sector-specific targets and policies in order to highlight those areas where domestic policy is needed. Countries can also use the LTS, which may include highly aspirational goals, to prioritize areas where greater innovation is needed, and design policies accordingly.

Transparency: Under the Paris Agreement, certain information provisions have been established for communication of NDCs. There is a list of information elements that countries are to provide to enhance clarity, transparency and understanding. While this list is voluntary for the first NDCs, it is to be used for the subsequent NDCs in 2025 and beyond. On the other hand, while efforts outside of the UNFCCC have established lists of possible elements that could be communicated in an LTS (see Appendix A in Levin et al. 2018), there is no such list agreed to in the UNFCCC. Furthermore, while the enhanced transparency framework under the UNFCCC establishes reporting and review procedures for NDCs, these do not exist for LTSs.

It can be advantageous to communicate an enhanced NDC and LTS with consistent category information where relevant. And investing in robust, up-to-date data is essential for both exercises. For example, when reporting targets, the same types of information, such as timeframes and the scope of greenhouse gases, should be reported so that domestic and international stakeholders can understand the relationship between the two documents and the longer-term emissions trajectory. Similarly, it can be helpful to report detailed information in both documents regarding assumptions and methodologies so that stakeholders can understand how they may differ. And in addition to communicating common elements, where relevant, it can also be helpful to explain in both documents how they relate to one another. For example, the enhanced NDC can explain how its revised target is aligned with its long-term goals; an LTS may explain interim milestones which informed the NDC. For example, Mexico’s LTS provides interim milestones for 10, 20 and 40 years related to development, ecosystem management, emissions reductions, private sector action and sectoral action. For countries that lack an LTS, it is helpful to transparently explain how the enhanced NDC aligns with a country’s longer-term sustainable development goals and the long-term goals of the Paris Agreement.

Conclusion

Long-term strategies and NDCs are designed to work hand-in-hand to steer countries and their development toward alignment with the ambitious goals put forward in the Paris Agreement. This process could work relatively seamlessly when a robust long-term strategy is available to inform NDC design and subsequent updates and enhancements. While limited resources and tight timeframes can pose a challenge to this synchrony, countries still have ample opportunities to consider these processes in a coordinated manner, whether they are starting with an LTS in hand, developing an LTS and updated NDC in parallel, or holding off on a formal LTS until a later date, while still needing to update the NDC with a long-term view in mind. Ensuring that NDC updates are guided by a long-term vision will not only save costs in the short run, through the process of developing both documents, but in the long run, by avoiding investing in the wrong development pathways that are not compatible with the Paris Agreement.