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Distinguished guests, colleagues, friends all,
Thank you for the opportunity to share a few thoughts on Nationally Determined Contributions and their role in climate and economic policy.
At the OECD we are fully committed to help secure global net zero by 2050.
What we bring to the table our multidisciplinary capabilities, helping to deliver better policies through our data and information sharing, our evidence-based mutual learning and advice, the development of best practices and standards and by providing a platform for inclusive multilateral dialogue, to help facilitate better and more effective international cooperation.
This includes supporting governments with the design of their Nationally Determined Contributions, the foundation for achieving our shared climate goals.
Today we are presenting the highlights of an OECD-UN Development Programme report that shows how ambitious Nationally Determined Contributions – if underpinned by robust implementation and investment plans – can provide economic opportunities, unlock investment, and support sustainable development and growth.
Our analysis shows how proactive climate action reduces economic risks, protects against systemic shocks, and safeguards long-term prosperity.
We estimate that by helping to reduce climate-related damages, strengthening Nationally Determined Contributions could increase global GDP by up to 13% over the next 75 years.
The benefits are not limited to economic growth – our analysis also highlights the potential of climate mitigation policies to advance other important national policy priorities, including in relation to public health, reliable access to energy and poverty reduction.
Our Environment Director Jo Tyndall will provide further details of this analysis in her presentation.
To help realise these benefits, the OECD is supporting countries in developing and implementing Nationally Determined Contributions for 2025 that are ambitious as well as achievable.
First, by tracking the ambition and implementation of current climate commitments.
Our 2024 Climate Action Monitor shows that current Nationally Determined Contributions amount to a collective reduction in greenhouse gas emissions of 14% by 2030, compared to 2022 levels.
This is well below the estimated 43% emissions reduction that is required to keep global temperature increases below 2 degrees Celsius consistent with the Paris Agreement.
Data from our Climate Actions and Policies Measurement Framework, which measures the stringency of climate policies across 52 economies, also shows the need to accelerate implementation of commitments:
Environmental policy stringency increased by only 1% in 2022 and 2% in 2023, compared to an average 10% annual increase between 2010 and 2021.
Second, by providing policy advice to ensure that Nationally Determined Contributions are financially viable and effective in stimulating investment.
OECD-IEA Climate Change Expert Group analysis shows that Nationally Determined Contributions currently lack sufficient information on how they will be delivered, meaning investors and the private sector don’t have the certainty that they need to commit the necessary financing.
To address this challenge, we recommend:
- Breaking down Nationally Determined Contributions to a more granular, sectoral level, with detailed costings of investment needs and financing strategies,
- Building confidence that Nationally Determined Contributions are achievable by providing detailed information on supporting legislation and regulations, and
- Ensuring strong coordination across the whole of the government, so that Nationally Determined Contributions are no longer developed in an isolated way by the Ministry of Environment but are anchored in overall national development strategies.
Third, by helping ensure national efforts are globally more effective and better coordinated through our Inclusive Forum on Carbon Mitigation Approaches.
The OECD’s IFCMA is designed to help optimise the global emissions reduction impact of emissions reduction efforts around the world – through better data and information sharing about the comparative effectiveness of different carbon mitigation approaches, through evidence-based mutual learning and advice on policy best practice and through inclusive multilateral dialogue involving advanced, emerging and developing economies.
To facilitate more coherent and better co-ordinated mitigation policies across countries,
To maximise positive cross-border spillover opportunities through shared innovation, cost savings and shared benefits from the climate transition,
And at the same time to avoid negative cross-border impacts such as carbon leakage or trade distortions.
We are working towards developing an IFCMA database of mitigation policies, and an assessment of their emissions impact, by the end of 2025.
This data and analysis will help to identify opportunities for enhancing Nationally Determined Contributions.
In closing,
There is a great deal to do to ensure that Nationally Determined Contributions take us to where we need to be in terms of progress towards our shared climate goals,
But the OECD and the UNDP, working together, have the tools, the data and the analysis to support countries in their efforts to get there.
Thank you.
Working with over 100 countries, the OECD is a global policy forum that promotes policies to preserve individual liberty and improve the economic and social well-being of people around the world.