Emily Murrell
Policy Programme Director
Half of the world’s population will vote in 2024 or shortly after – but what implications will this have for climate policy? Here's a look at where we are now, and what we hope to see next from policymakers.
This year’s political uncertainty will add to ongoing geopolitical and economic challenges and, in some parts of the world, growing anti-climate sentiment. But uncertainty also presents opportunity. New election campaigns offer non-state actors the chance to push leaders to raise ambition on climate policies, reaffirm broad public support for climate ambition, and tackle counternarratives and so-called ‘greenwashing’ head-on.
Alongside elections in the European Parliament and the UK, Azerbaijan will host COP29. A second large oil and gas exporter as the COP host nation reiterates the importance of the shift to clean energy alongside resolving key conditions for progress, such as sufficient climate finance. Many also look to COP30 in Brazil, home to the Amazon which is sometimes known as ‘the lungs of the earth’. Brazil is expected to bring issues including land use change, food security and indigenous rights up the priority list.
The bi-annual UN Biodiversity Summit, CBD COP16, also takes place in Colombia, one of the most biodiverse nations in the world. This offers a chance for the wider adoption of the Taskforce for Nature-related Financial Disclosures (TNFD), as well as much-needed attention on how to protect diverse ecosystems such as marine and coastal areas, and the further integration of climate and nature considerations in policymaking.
Undoubtedly, it’s set to be a pivotal year – here are our expectations and hopes for EU, UK and global climate policies in 2024.
EU sectoral push
The EU has set in place the regulatory foundations to cement its status as the most ambitious continent on climate, but the hardest part is still to come. European Parliament elections come at a time when member states are tilting to the right, with some leaders voicing climate and single market scepticism.
The next mandate will run until 2029, just before the deadline for the ambitious 55% emissions reductions by 2030 target – the green transition must therefore be part of a wider strategy to drive growth, ensure energy security and boost global competitiveness if Europe is to genuinely be ‘Fit for 55.’
A focus on sectoral implementation in 2024 can support this strategy. Our engagements will call for policies which overcome barriers to decarbonising high-emission sectors like steel and support the Commission's plans to upgrade grid infrastructure, as well as increase wind power generation and supply chains. Looking ahead, we will advocate for the European Scientific Advisory Board on Climate Change’s recommendation of at least 90% emissions reductions by 2040.
Concerns remain that existing regulations focus too much on investments in companies and economic activities that are already sustainable.
On the sustainable finance side, this mandate's wave of regulations has slowed as attention turns to implementation, and we hope to see policymakers address some of the usability issues facing investors and corporates across the key regulations in 2024. This year also sees the start of the first reporting period under the Corporate Sustainability Reporting Directive, which should help to improve data availability and quality - though investors remain concerned about the move away from mandatory reporting requirements.
Building on our consultation response in December, we will call for the Commission to commit to meaningful reform of the Sustainable Finance Disclosure Regulation. This should include greater recognition of transition-focused investment strategies as an essential means of driving economy-wide decarbonisation.
More broadly, concerns remain that existing regulations focus too much on investments in companies and economic activities that are already sustainable. We will encourage policymakers to embed the concept of transition finance more formally across the sustainable finance framework to support harder-to-abate sectors. The Corporate Sustainability Due Diligence Directive offers an opportunity to build on transition plan disclosures by requiring companies and investors to implement – we expressed our support for this late last year.
Further, our ‘Investor Expectations of EU Sustainable Finance’ paper in mid-2024 will offer more detailed recommendations for policymakers and investors looking to undertake their own policy advocacy and engagement.
UK Green Finance Strategy
In the UK, 2023 saw the expansion of North Sea oil and gas licenses and reduced ambition on building and transport decarbonisation targets, bringing its status as a climate leader into question. The opposition Labour Party's flagship Green Prosperity Plan, designed to compete with US and EU renewable industry incentives, also looks uncertain in the current financial climate.
The Green Finance Strategy warns that an estimated £44-97 billion in investment is needed to finance domestic nature-related goals.
Positively though, underneath are the foundations of a solid regulatory framework and a world-leading financial centre that has committed to becoming ‘the transition finance capital of choice’ in its 2023 Green Finance Strategy. We will engage with the newly launched Transition Finance Market Review to help support this aim.
From a regulatory perspective, investors need clarity on the core elements of the UK’s sustainability disclosure regime. This includes the taxonomy consultation which is expected in early 2024; the adoption of the ISSB standards for use in the UK; and comprehensive transition plan disclosures that build on the world-leading work of the Transition Plan Taskforce.
UK policymakers must also ramp up nature and biodiversity action to support the government's pledge to halve biodiversity loss by 2030. The Green Finance Strategy warns that an estimated £44-97 billion in investment is needed to finance domestic nature-related goals and we must learn lessons from climate negotiations over the years – finance cannot be an afterthought.
An enormous gap
Globally, significant investments must flow towards clean energy technologies to be able to achieve the climate pledges made at COP28. Despite the headlines, an enormous gap remains between pledged amounts and the actual spending required to meet climate goals.
The Grantham Institute recently warned that USD 2.4 trillion of investment is needed per year for developing countries to meet their goals by 2030.
Tipped as ‘the finance COP,’ delegates in Azerbaijan will look to iron out the operalisation of the Loss and Damage Fund, which to date covers just 0.2% of required funds. Establishing a clear long-term governance structure and fund ownership will be a key ask from the nation’s most vulnerable to climate shocks.
Many more also depend on the Collective Quantified Goal on Climate Finance (NCQG), to be set this year. The NCQG was established to channel funding from wealthier nations towards sustainable development with an initial floor of $100 billion per year, a target which advanced economies were years late to meet. This delay damaged trust as the urgency increased.
The Grantham Institute recently warned that USD 2.4 trillion of investment is needed per year for developing countries to meet their goals by 2030. making clear public-private collaboration on climate finance vital. This will be the focus of many of our engagements in 2024.
Alongside this, nations must revise their National Biodiversity Strategies and Action Plans at the Biodiversity Summit in Colombia, while Brazil holds the role of G20 President. The rich biodiversity and ambitious conservation strategies of both nations, as well as their increasing appetite to influence international negotiations, could help push countries in their region and beyond to increase ambition. Integrating nature across all of our work at IIGCC will be a core focus for 2024.
From London to Brussels, Baku to Bogotá, this year could see enormous progress for climate and nature policy. But to do so we need the political will, more policy stability, and the urgency from all key players in society.
With so much at stake, from the rising threat of conflict to the loss of human life and increased suffering from climate disasters, we know that our greatest asset, our planet, needs climate action now.
If you’d like to take part in our working groups and be the first to see our policy insights and analysis, why not contact us today to find out more about becoming a part of IIGCC.