25 Feb 2021

Guest Blog: 2021 - The Super Year for Sustainability and Climate Policy

In November, 168 states will provide National Climate Plans (NDCs) ahead of the United Nations’ 26th Climate Summit (COP). Whether the focus is on halving emissions with the aim to limit the steady yearly increase in global temperature to below 1.5 degrees or slashing all atmospheric CO2 emissions by 2050, national governments are responsible for doing a lot more than incrementing targets and making public pledges.

The Gap Between Climate Ambition and Climate Action

While the pursuit of ambitious revised climate targets will occupy the international climate policymaking in 2021, expect national governments and policymakers to start waking up to the urgent reality that climate ambition will need to be backed up by tangible climate policy action.

Governments will also accelerate national policymaking efforts by activating multi-stakeholder consultations, utilising multilateral organisations of all types and sectors to identify adoptable best practices across a broad range of policy issues such as energy efficiency, procurement models, urban design and public services.

That said, state-centred climate governance in most national jurisdictions will remain weak, with no single country on track to meet 2030 emissions obligations and the necessary policy frameworks to deliver on 2050 net zero targets remaining little, if at all, addressed.

To drive home this overall lack of policy preparedness by governments, consider Sony’s response to Japan’s net zero announcement in September last year, when the company indicated it was considering shifting its manufacturing from Japan to overseas due to the country’s strict new rules on renewable energy and carbon emissions, warning that government policy pronouncements were not aligned with market realities and highlighting the scarcity and premium costs of renewable energy in Japan.

In light of this, expect a greater share of the climate leadership burden to fall to businesses and tech companies in particular. Governments’ and policymakers’ expectations of large business and big tech to not only reduce their own industry-specific emissions but also to provide leadership and solutions to decarbonise the entire economy will only continue to grow.

Net Zero Is a Bet on the Tech Sector

In committing to net zero, governments are betting big on the tech sector to deliver rapid and sustained technological innovation capable of driving decarbonisation across the economy. The biggest obstacle to stronger business leadership and climate action, according to our client engagements, is the overall lack of policy direction and certainty from governments.

For businesses to act means investing money in changing their entire business models, finding new technology to boost efficiency and adaptability or simply making sure they are informed and compliant – a series of long-term decisions that are entirely dependent on existing and future legislative and regulatory conditions.

For governments to reap the rewards, urgent clarity is required on how governments intend to use legislative and regulatory instruments available to them to shape the market signals. Now is the time for enterprising business and tech companies to aid this process by engaging governments with firm proposals on the optimum mix of taxation, subsidies, loans, investments and grants that will support research and development, facilitate market access and drive consumer demand for green products and services.

In summary, 2021 will be a “super year” for climate policy, and while international policymakers will remain fixated on ambitious target- setting, national policymakers in advanced economies will begin the work of translating ambition into hard policy action. With the tight deadlines required to stave off climate change, enterprising businesses and tech companies can engage with governments in developing the legislative and regulatory environments that will support the rapid and sustained technological innovation capable of driving decarbonisation and achieving net zero by 2050.

This article was originally authored by Gordon Mackay and Ivan Suarez, Access Partnership

The article is part of Access Partnership's Tech Policy Trends 2021

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