In the lead-up to the annual U.N. climate conference (COP28) starting next month, this forecast should put policymakers and business leaders on notice. On top of that, early analyses show the month of September breaking a global heat record by a wide margin. Yet the news is not all dread and despair. The U.N. report also touts the progress made since the Paris agreement was negotiated in 2015, including “early signs of transformation and urgency” that could remake the climate fight. To be sure, these green shoots of innovation are not enough — but they can provide evidence-based building blocks for the crucial next decade of climate action.
One glimmer of progress is that more places are starting to price carbon emissions. A market-based approach that requires those who pollute to pay for it remains the most efficient way to reduce the emissions that drive global warming, because it forces individuals and companies to think about reducing their carbon footprints without clunky government mandates.
For decades, carbon prices were found primarily in wealthy nations. With the exception of the United States, every Group of Seven country prices carbon through either an emissions-trading scheme or a tax. But now, more middle- and low-income nations are joining the trend. China’s national trading scheme launched in 2021 after a long pilot period. Though concerns remain about data accuracy, on which these programs’ effectiveness rests, their existence still signals a step forward in intent and infrastructure.
India, too, is starting to experiment with market-based regulations. In the state of Gujarat, researchers from the University of Chicago, Yale University, the University of Warwick and the Abdul Latif Jameel Poverty Action Lab investigated the impact of a market for particulate matter emissions. Economist Michael Greenstone and co-authors found that industrial plants that participated in the market reduced emissions by 20 to 30 percent; the market mechanism also lowered the costs of achieving this decline, compared with other emissions-cutting approaches. While the program targeted local air pollutants, these emissions are closely linked with greenhouse gases. Based on the results, other Indian states and cities are launching similar programs, and the central government has started working toward a national carbon market.
Another encouraging sign is the growing openness to innovative ways to help countries pay for green development. Since 2021, several countries have entered agreements known as Just Energy Transition Partnerships, multibillion-dollar ventures leveraging public and private capital. Under these models, developing nations build investment plans to move away from fossil fuels, with a focus on local contexts. Not all of these partnerships have operated smoothly — but, as they adapt, these models could become a promising way to support sustainability in the developing world.
Then there are the strides in climate technology. In a new report, the International Energy Agency concludes that existing technologies could deliver 80 percent of the emissions reductions necessary by 2030. The scaling up of renewables, improvements in energy efficiency, and surges in battery storage and production in recent years are especially worth celebrating.
These technologies are rapidly becoming more cost-effective. Solar panel costs have fallen approximately 98 percent in the past three decades, while the cost of electrolyzers — critical technology for some uses of renewable and nuclear power — is projected to fall 60 to 80 percent in the next 10 years. These developments mean green technology could finally be attainable for developing nations. The challenge is deploying them to meet growing demand.
For any of these transformations to move the climate needle, countries need accurate monitoring, particularly of emissions. Though low-cost emissions sensors are now readily available, many places have been slow to build transparent monitoring systems. The United States and other delegations at the U.N. need to make serious data-gathering an international priority.
As COP28 approaches, the focus should remain on the significant challenges ahead: investing in climate resilience and adaptation; helping vulnerable communities adjust to the green transition; and improving voluntary markets and registries so they become an additional tool to reduce emissions. But world leaders should also take a close look at models and transformations that already seem to be working — and find ways to scale and leverage them for the future.
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