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Policies enabled by changing economics and innovation are supporting decarbonization. The emission reduction pledges governments made as part of the Paris Agreement on climate change will not suffice to limit global warming to 1.5°C above pre-industrial levels. In addition, following a COVID-19-related dip, carbon emissions from burning fossil fuels have rebounded sharply - suggesting that they’ll continue to rise, barring stronger intervention. There are opportunities to invest in clean energy infrastructure in ways that could help positively shape the global energy system for years to come. However, since the signing of the Paris Agreement, progress on climate and energy policy has primarily taken place at the federal, state, and local level - rather than internationally. For example, the European Union aims to reduce greenhouse gas emissions to net-zero by 2050, and some member states have set even more ambitious net-zero targets. California, which boasts the world’s 5th-largest economy (it has been projected to surpass Germany), has set 100% clean electricity standards together with other US states and territories; hundreds of cities and counties have followed suit. This progressive leadership is in part a response to delayed international action, and to increasing pressure from activists and political campaigns around the world. Policies that spur innovation and reconfigure markets are needed to enable the widespread deployment of clean technologies - and to achieve long-term emissions-reduction targets. Policy-makers can build on an increasingly large body of successful efforts around the world, and send the right signals by removing fossil fuel subsidies, introducing carbon emission pricing schemes, and creating efficiency targets that can be reached using existing technologies. One example of policies that can reconfigure markets is support for renewable schemes; falling renewable costs have made these resources competitive with alternative technologies, and as a result, policies to procure renewables have evolved into more competitive, market-based mechanisms like auctions. Net-zero plans that put economic development and distributional equity at the centre of climate policies have gained popularity in the US and Europe; while their ultimate success remains to be seen, it is clear that any successful climate plan must consider related impacts on inequality and justice. In addition, the corporate world has not been absent from the changing policy landscape. Corporate targets for decarbonization are becoming increasingly popular, and several oil and gas supermajors have pledged to reduce emissions in line with a 1.5°C warming target.

Strengthening Energy Policy and Governance

KEY TRENDS

Strengthening Energy Policy and Governance