Enhancing the ambition and ability to implement and finance the next round of NDCs is critical to address current gaps and chart a credible course to 2035 to keep the 1.5oC goal within reach. The next NDCs need to be both more robust than current efforts and simultaneously advance efforts to implement and finance climate action. This chapter briefly sets out the state of play with implementing and financing current NDCs. Building on insights from experiences, this chapter also sets out the key dimensions of ambitious, implementable and investable NDCs that can catalyse the growth and development benefits of accelerated climate action.
Investing in Climate for Growth and Development

6. Unpacking implementable and investible NDCs
Copy link to 6. Unpacking implementable and investible NDCsAbstract
6.1. State of play with implementing and financing current NDCs
Copy link to 6.1. State of play with implementing and financing current NDCsA greater focus on implementation in the next NDCs will be important in light of current experiences. As noted in the 2024 UNEP Emissions Gap Report, “ambition means nothing without action” (UNEP, 2024[1]). Many developing countries continue to face challenges in delivering their current NDCs, particularly when it comes to mobilising and accessing finance from different sources to meet their climate commitments (NDC Partnership, 2023[2]; Gerhard, Ellis and Abebe, 2022[3]). Many developed countries are not on track to meet their current NDC targets and face obstacles to adopting more ambitious climate action, both at the global level (Chapter 1) and domestically as further emission reductions require politically difficult shifts, including in behaviour and infrastructure (OECD, 2025[4]). Without a clear direction of travel, investors also find it challenging to support NDC implementation as it is not easy to identify concrete, investment-ready, bankable projects and pipelines that contribute to a country’s NDC (IIGCC, 2024[5]).
Despite efforts, there are large gaps in implementing countries’ current climate mitigation targets. Countries are not on track to deliver their current NDCs and there remain significant gaps in collective progress towards the long-term goals of the Paris Agreement as recognised in the first Global Stocktake (GST1) (UNFCCC, 2023[6]). The 2024 UNEP Emissions Gap Report estimates the implementation gap between projected GHG emissions based on policies in place as of 1 June 2024 and those pledged in current NDCs to be around 2GtCO2e for unconditional NDCs and 5GtCO2e for conditional NDCs in 2030 (UNEP, 2024[1]). The UNEP report also estimates that while implementation gaps vary across individual G20 countries (see Figure 6.1), collectively G20 countries will miss their 2030 NDC targets, with current policy projections set to exceed NDC projections by 1GtCO2e in 2030 (UNEP, 2024[1]).
Figure 6.1. Implementation gaps between current policies and 2030 NDC targets in G20 countries relative to 2019 emissions
Copy link to Figure 6.1. Implementation gaps between current policies and 2030 NDC targets in G20 countries relative to 2019 emissions
Note: Values below the diagonal indicate countries that are more likely to achieve their current NDC target, values above the diagonal reflect countries that are less likely to achieve their current NDC targets based on existing policies. All NDCs represented in the figure are unconditional, with the exception of South Africa. The assessment does not include commitments by the African Union as a whole as it did not have a collective NDC as of 1 June 2024. The UNEP assessment does not include policies adopted in G20 countries after June 2024, thus the estimated gaps indicated in the above figure do not fully account for the impact of recently adopted policies in some countries.
Source: (UNEP, 2024[1])
There is also a significant implementation gap for climate adaptation. Progress in implementing adaptation is uneven and fragmented, with low-income groups facing the largest gaps between adaptation needs and action (IPCC, 2023[7]). National Adaptation Plans (NAPs) are a key instrument for adaptation planning, while NDCs play a valuable role in communicating overall objectives on adaptation in some countries (see Box 6.7). Within these processes, further efforts are needed to set clear targets, track progress and increase the ambition of adaptation action in line with the Global Goal on Adaptation (see Box 6.1), with work underway through the UAE Framework on Global Climate Resilience and the UAE‑Belèm Work Programme to identify indicators to help address this gap. In current NDCs, while 81% include some elements relating to adaptation, only 37% include quantitative, time bound targets on adaptation (UNFCCC Secretariat, 2024[8]). A survey of OECD countries found that only 30% of respondents set a timeframe for their adaptation objectives (OECD, 2024[9]). While data gaps make it challenging to undertake a global assessment of the adequacy and effectiveness of adaptation actions (Jeudy-Hugo, Errendal and Kotani, 2022[10]), some countries have developed national assessments of progress. Analysis of national progress reports from 20 countries, at varying income levels, found that current adaptation efforts are insufficient and hindered by institutional, capacity and financial constraints (UNEP, 2024[11]). Similarly, analysis of 44, mostly developing countries, found major gaps and weaknesses in implementing adaptation measures and establishing systems for managing climate risks, with identified gaps including limited integration of adaptation in sectoral plans, technical and capacity barriers and a focus on reactive measures when disasters occur rather than proactive efforts to reduce risks (World Bank, 2024[12]).
Box 6.1. Ambitious action on climate adaptation needs to complement mitigation efforts
Copy link to Box 6.1. Ambitious action on climate adaptation needs to complement mitigation effortsA coherent approach to adaptation and mitigation is needed to ensure an efficient and effective response to climate change. The Paris Agreement’s Global Goal on Adaptation (GGA) calls for “...enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change...” (article 7 of the Paris Agreement). Subsequently, the 2023 UAE Framework for Global Climate Resilience was established to guide efforts to achieve and measure progress towards this goal, setting out targets for seven key sectors (including agriculture, infrastructure and health) as well as four dimensions relating to the adaptation policy cycle (UNFCCC, 2023[13]). A list of indicators for measuring progress towards these targets is expected to be adopted at COP30.
The impacts of climate change are already being felt and are projected to become increasingly severe. The ten warmest years on record were from 2015-2024, with global average temperatures in 2024 1.5oC above 1850-1900 averages (WMO, 2025[14]). With this increase in average global temperatures, the world is experiencing increasingly severe and unpredictable weather extremes, such as heatwaves, droughts and floods, leading to profound impacts on people, nature and development. One-fifth of the global population are already highly exposed to climate risks (World Bank, 2024[12]).
Ambitious action to build resilience to the impacts of climate change yields a “triple dividend” (Tanner et al., 2018[15]) of reduced losses when a climate event occurs; reduced risks; and non-market benefits, such as protecting biodiversity through nature-based solutions. The first dividend will deliver macroeconomic benefits as proactive management of climate-related risks can avoid risks to financial stability (European Commission, 2024[16]), particularly in low-income countries, support employment and help to reduce inflationary pressures (Kotz et al., 2024[17]).The second and third dividends can deliver immediate benefits even before climate risks materialise (Heubaum et al., 2022[18]).
Overall, the benefits of adaptation measures will be context specific, but there is a growing volume of microeconomic analysis demonstrating that investing in adaptation is cost effective, particularly when considering the full range of benefits. One study identified USD 1.8 trillion of investment opportunities, with benefit-cost ratios of 2:1 to 10:1 (Global Commission on Adaptation, 2019[19]). Adaptation will also create new opportunities for innovation to develop solutions to address climate-related risks. The current market for adaptation solutions has been estimated at USD 1.4 trillion per year, including USD 647 billion of demand from consumers and USD 737 billion from governments (Tailwind, 2024[20]).
Note: Case box drafted by: Michael Mullan (OECD)
Significant levels of investment and financing are needed to fully deliver NDCs, but available estimates of needs and gaps vary widely. In their current NDCs, 46% of countries included quantitative estimates of financial support needs for implementation based on different national costing exercises, with figures typically expressed as total amounts over the NDC timeframe and differentiating between conditional and unconditional actions (UNFCCC, 2024[21]). Costed needs by 98 countries estimate the overall cost of implementing current NDCs to be between USD 5 and 6.9 trillion by 2030 (UNFCCC SCF, 2024[22]). Another estimate indicates that USD 400 billion per year through 2030 is needed to meet the goals of 110 countries set out in their current NDCs. Of this, 69% (USD 277 billion) is for mitigation, 21% (USD 83 billion) for adaptation, and 10% (USD 40 billion) for cross-cutting initiatives (Patience, Sharma and Graham, 2024[23]). Aggregating adaptation finance needs expressed by countries in their NAPs and NDCs amounts to a total of USD 387 billion per year, with developing countries alone requiring around USD 215 billion per year this decade for adaptation (UNEP, 2024[11]). There are several other assessments that provide information on estimated investment needs, reflecting differences in scope, methods, and assumptions (Falduto, Noels and Jachnik, 2024[24]). For example, one study estimates that annual mitigation and adaptation finance needs across developed and developing countries could range between USD 5.9 and 12 trillion annually by 2030 (CPI, 2023[25]). Complementing these bottom-up estimates, top‑down analyses (see Chapter 2), suggest that achieving enhanced NDCs may require global investments in clean energy and energy efficiency close to 0.25% of GDP annually by 2035 and 2050, depending on the region.
While current investment in climate action remains far below estimated needs, momentum is building. In 2022, global climate finance flows were estimated at USD 1.46 trillion, with mitigation finance representing the majority at USD 1.3 trillion, and adaptation finance accounting for USD 76 billion (CPI, 2024[26]). These estimates vary by source and methodology: Bloomberg NEF, CPI, and IEA report investments in climate mitigation ranging from USD 1.3 to 1.7 trillion in the same year (CPI, 2023[25]; BloombergNEF, 2024[27]; IEA, 2024[28]). In terms of international public finance, developed countries provided and mobilised USD 115.9 billion in 2022 towards the USD 100 billion goal, including USD 32.4 billion in adaptation finance (OECD, 2024[29]). While the alignment of real-economy investments with climate change mitigation goals is still limited, recent OECD analysis shows a positive trend (OECD, 2024[30]). Nonetheless, according to the IPCC, flows for climate action typically represent a small, one‑digit percentage of all real-economy investments, underscoring the significant potential for redirecting investments towards climate action (Kreibiehl, 2022[31]; Falduto, Noels and Jachnik, 2024[24]).
6.2. Unpacking the dimensions of ambitious, implementable and investible NDCs
Copy link to 6.2. Unpacking the dimensions of ambitious, implementable and investible NDCsNDCs set out a country’s near-term climate goals and if done right could be a catalyst to deliver the growth and development benefits of ambitious climate action. The Paris Agreement established a bottom-up system of NDCs in which countries set out how they plan to support the Agreement’s long‑term temperature goal. An increasing number of countries also include an adaptation component in their NDCs (UNFCCC, 2024[21]). Collective progress towards the goals of the Paris Agreement is assessed through periodic global stocktakes (GSTs), while countries regularly track progress in implementing their NDCs through biennial transparency reports (BTRs) (UNFCCC, 2016[32]). However, significant gaps in both the ambition and implementation of current NDCs undermine their potential catalysing role.
To unlock their full potential, NDCs need to be ambitious, implementable and investable so they can secure buy-in from relevant actors, channel finance from different sources and support a country’s climate, growth and development goals. In this report, enhanced NDCs refer to NDCs that are ambitious, implementable and investable. An ambitious NDC signals a country’s overall ambition and direction of travel on climate change guided by the outcomes of the first global stocktake (GST1). Investable and implementable NDCs are underpinned by credible and actionable pathways to deliver the NDC and supported by robust governance arrangements, inclusive stakeholder engagement and reporting processes. As illustrated in Figure 6.2, these dimensions of an NDC are not mutually exclusive, but are closely interlinked and reinforcing. Building on countries’ experiences with NDCs and available guidance documents, including for example the NDC3.0 Navigator (NDC Partnership; UNFCCC, 2024[33]), the NDC Implementation Guide (UNDP et al., 2020[34]); Guide to Strengthening National Climate Plans (Fransen et al., 2019[35]); Quick-Start Guide on Planning for NDC implementation (CDKN and Ricardo Energy & Environment, 2016[36]), it is possible to identify different approaches and instruments that can enhance the implementation and financing of NDCs. These are briefly set out below and unpacked further in Chapter 7 and Chapter 8.
Figure 6.2. Unpacking the dimensions of enhanced NDCs
Copy link to Figure 6.2. Unpacking the dimensions of enhanced NDCs
Note: Examples of potential instruments and approaches listed in each dimension are illustrative and will vary depending on the country context and circumstance.
Ambitious NDCs are useful tools for signalling a country’s overall direction of travel and policy intent on climate change. Under the Paris Agreement, successive NDCs are expected to be more ambitious than previous efforts. However, given the bottom-up nature of NDCs, efforts to update or prepare new NDCs to date have varied widely, from expansions in the scope and coverage of NDCs, to changes in the target type. Parties are also expected to explain how their NDC is considered fair and ambitious in light of their national circumstances (UNFCCC, 2019[37]) however there is currently no universally agreed tool, framework or criteria for assessing fairness and ambition (Jeudy-Hugo et al., 2024[38]), which makes it challenging to conduct a robust assessment. While recognising the final form, structure and content of NDCs is determined by individual countries; by signalling a country’s near-term ambitions on climate change, NDCs can help to inform decisions by relevant public and private actors. The more clarity an NDC can provide, the stronger the signalling function it can play (see Box 6.2).
Box 6.2. Signalling elements in an NDC
Copy link to Box 6.2. Signalling elements in an NDCNDCs can serve as important signals for steering decisions by stakeholders within government and beyond. Enhancing the capacity of an NDC to steer investment and finance and drive implementation requires clear signals including:
Quantified climate action targets – Clear, quantified targets (e.g. economy-wide GHG reduction targets, increases in renewable energy capacity, reductions in non-CO2 emissions) informed by the GST, provide stakeholders with a clear sense of ambition and expected outcomes. Enhancing the clarity and ambition of these targets can bolster investor confidence and inform their risk analyses (Candriam, 2024[39]).
Identify sectoral priorities - Identifying priority sectors (e.g. industry) or areas for climate action (e.g. strengthening resilience) informed by the GST helps both public and private actors to identify priority mitigation or adaptation opportunities in a country (IIGCC, 2024[5]). Countries can set quantified sectoral targets or plans, building on economy-wide modelling, that can guide investors towards high-impact interventions and encourage the alignment of financial flows with national priorities.
Initial estimates of investment needs and funding gaps - Providing preliminary cost estimates for implementing the NDC and identifying funding gaps, including where international support is needed for developing countries, can help to enhance transparency among potential investors. These initial estimates can provide the basis for more elaborated NDC investment or financing strategies that set out how countries plan to mobilise and allocate resources to achieve their NDC targets (Chapter 8).
Alignment with long-term climate strategies and broader development goals - Setting out how an NDC fits with a country’s existing strategic planning mechanisms, including its national development plan and long-term climate strategy, can help to clarify how the NDC supports a country’s longer-term goals. This alignment can in turn help to strengthen credibility and ownership of an NDC, enhance policy coherence, and support sustained investment decisions in line with a country’s broader priorities Chapter 7).
High-level policy and regulatory direction - Providing an indication of planned policy measures, such as carbon pricing, phasing out fossil fuel subsidies, or incentives for clean energy, can help to reduce policy uncertainty and reassure investors (OECD, 2023[40]; IIGCC, 2024[5]). These high-level policy signals can then be taken up in subsequent implementing documents and processes (see Chapter 7 and Chapter 8).
The first GST sets out important goalposts and a series of mitigation focused calls that can guide the ambition and direction of the next round of NDCs. Under the Paris Agreement, the outcomes of periodic GSTs are to inform subsequent national efforts, including NDCs. The first GST (GST1) that concluded at COP28 (UNFCCC, 2023[6]) encourages all countries to put forward ambitious, economy-wide emission reduction targets in their next NDCs that cover all GHGs, sectors and categories aligned with limiting global warming to 1.5°C and to align their next NDCs with their long-term low GHG emission development strategies (LT-LEDS). The GST1 also calls on countries to contribute, in a nationally determined manner, to a series of global mitigation efforts in line with 1.5°C pathways (Box 6.3) and for strengthened efforts in other areas including deforestation, ocean-based mitigation action and sustainable lifestyles. Responding to the calls in the GST1 would represent an increase in ambition from current efforts in many countries, and some governments such as in the UK have stepped up to this challenge (Box 6.4).
Box 6.3. Selected calls in the GST1 focusing on mitigation and NDCs
Copy link to Box 6.3. Selected calls in the GST1 focusing on mitigation and NDCsParagraph 28 of the GST1 decision (Decision 1/CMA.5) calls on Parties to contribute to the following global efforts in a nationally determined manner (emphasis added):
“(a) Tripling renewable energy capacity globally and doubling the global average annual rate of energy efficiency improvements by 2030;
(b) Accelerating efforts towards the phase-down of unabated coal power;
(c) Accelerating efforts globally towards net zero emission energy systems, utilising zero- and low-carbon fuels, well before or by around mid-century;
(d) Transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science;
(e) Accelerating zero- and low-emission technologies, including, inter alia, renewables, nuclear, abatement and removal technologies such as carbon capture and utilisation and storage, particularly in hard-to-abate sectors, and low-carbon hydrogen production;
(f) Accelerating the substantial reduction of non-carbon-dioxide emissions globally, in particular methane emissions by 2030;
(g) Accelerating the reduction of emissions from road transport on a range of pathways, including through development of infrastructure and rapid deployment of zero-and low-emission vehicles;
(h) Phasing out inefficient fossil fuel subsidies that do not address energy poverty or just transitions, as soon as possible”.
Paragraph 33 reiterates the importance of conserving, protecting and restoring nature and ecosystems to meet the temperature goal of the Paris Agreement, including (emphasis added):
Enhanced efforts towards halting and reversing deforestation and forest degradation by 2030,
Through other terrestrial and marine ecosystems acting as sinks and reservoirs of GHGs,
By conserving biodiversity in line with the Kunming-Montreal Global Biodiversity Framework.
Paragraph 37 reiterates the call on Parties that have not yet done so “to revisit and strengthen the 2030 targets in their NDCs as necessary to align with the Paris Agreement’s temperature goal by the end of 2024, taking into account different national circumstances”.
Paragraph 39 “encourages Parties to come forward in their next nationally determined contributions with ambitious, economy-wide emission reduction targets, covering all greenhouse gases, sectors and categories and aligned with limiting global warming to 1.5 °C, as informed by the latest science, in the light of different national circumstances”.
Paragraph 40 “encourages Parties to align their next nationally determined contributions with long-term low greenhouse gas emission development strategies.”
Source: (UNFCCC, 2023[6])
Box 6.4. Taking forward the GST1 outcomes in NDCs – Insights from the UK
Copy link to Box 6.4. Taking forward the GST1 outcomes in NDCs – Insights from the UKThe UK’s 2035 NDC includes information to facilitate clarity, transparency and understanding (ICTU) setting out how it aligns with the outcomes of the GST.1 The new NDC responds directly to the call on paragraph 39 of the GST1 that encourages countries to come forward with ambitious, economy-wide emission reduction targets aligned with the 1.5°C goal and informed by the latest science. Following the recommendation of the Independent Climate Change Committee (CCC), the UK has committed to a reduction in absolute GHG emissions of 81% by 2035 from 1990 levels, which the CCC considers to be a credible contribution to limiting warming to 1.5°C, and reaching net zero by 2050, in line with IPCC 1.5°C scenarios. The commitment is also in line with the UK’s legally binding Sixth Carbon Budget (for 2033-2037)1, anchored in the UK’s Climate Change Act, and will support the Seventh Carbon Budget.
The UK’s 2035 NDC also responds to specific calls in paragraph 28 of the GST1 including sub‑paragraph (a) through the Clean Power 2030 Action Plan, which aims to increase deployment of renewable and nuclear power to meet the UK’s electricity demand by 2030 and the Warm Homes Plan which incentivises low carbon heating and household energy efficiency; sub-paragraph (e) by providing GBP 21bn in funding for private sector initiatives in the Carbon Capture Utilisation and Storage (CCUS) and hydrogen industry and sub-paragraph (g) through the UK Zero Emission Vehicle mandate which aims to reach 100% electric vehicles sale nationwide by 2035.
Note: Case box drafted by Ana Diaz Vidal (OECD)
1. While the NDC targets are expressed as a percentage reduction, the carbon budgets are expressed as absolute emissions which should not be surpassed in the budgeted period. NDC targets do not include international aviation and shipping in line with UNFCCC accounting practices.
The mitigation-focused calls in the GST1 are framed at the global level and provide a comprehensive set of actions to put the world on a 1.5°C pathway if implemented fully and on time. However translating the global calls of the GST into NDCs is not a straightforward exercise and will depend on different domestic factors and enabling conditions (Jeudy-Hugo et al., 2024[38]; Jeudy-Hugo and Charles, 2022[44]). Various toolkits, guidelines and technical support are available to help countries take forward the global calls in the GST1 at the national level such as guidance on integrating non-CO2 emissions in NDCs developed by the Climate and Clean Air Coalition (CCAC) (see Box 6.5).
Box 6.5. Leveraging the next NDCs to reduce non-CO2 pollutants
Copy link to Box 6.5. Leveraging the next NDCs to reduce non-CO<sub>2</sub> pollutantsThe GST1 includes a call on countries to contribute to global efforts to substantially reduce non-CO2 emissions globally, in particular methane emissions by 2030. Non-CO₂ pollutants, particularly Short-Lived Climate Pollutants (SLCPs) such as black carbon, methane, tropospheric ozone, and hydrofluorocarbons (HFCs) are the most important contributors to anthropogenic global warming after CO2, responsible for up to 45% of current global warming. Some SLCPs are also considered air pollutants which impact human health, agricultural productivity and ecosystems, among others.
In their current NDCs, many countries mention at least one non-CO₂ pollutant among the basket of GHGs covered in their mitigation targets or include general references to non-CO₂ gases as part of their mitigation strategy. However, few current NDCs include specific non-CO2 reduction targets, sectors, or measures targeting these pollutants and few have considered air quality measures as a mitigation action. There are some notable exceptions such as Colombia which has ambitious targets to reduce SLCP emissions in its current NDC; Côte d'Ivoire which integrated its National Action Plan to reduce SLCPs in its NDC thereby aligning efforts to address air pollution and climate change; and Nigeria which has a specific methane reduction target for the oil and gas sector in its current NDC.
The next NDCs provide an opportunity to integrate more ambitious non-CO₂ mitigation strategies, and harness the multiple benefits of abating non-CO2 GHGs on health, environmental and climate goals (Chapter 4). Guidance developed by the Climate and Clean Air Coalition (CCAC) helps countries translate the global call in the GST1 to reduce non-CO2 emissions by setting out how countries can include air quality and non-CO₂ considerations in their next NDCs. The CCAC guidance focuses on four priority pollutants (black carbon, methane, HFCs, N2O) and recommends countries:
Include non-CO₂ mitigation goals and measures as part of their economy-wide NDC target in relevant sectors;
Integrate air quality planning and implementation to increase climate and health benefits;
Harness global, regional and national agreements, strategies and initiatives;
Ensure a comprehensive assessment and reporting of non-CO2 emissions in BTRs.
The CCAC guidance also sets out specific tools and recommendations for how countries can tailor non-CO₂ approaches to their national circumstances and provides information on available opportunities for financing, technology, and technical support for project preparation, implementation, and developing comprehensive inventories of non-CO2 emissions over time.
Some countries are taking steps to integrate non-CO2 pollutants, air quality and health benefits in their new NDCs with targets to reduce specific SLCPs (e.g. Canada, New Zealand, Uruguay), sectoral emission reduction pathways that focus on key sectors emitting SLCPs (e.g. Zimbabwe, Lesotho), mitigation actions that could implicitly reduce SLCPs (e.g. Cuba, Ecuador) and by highlighting the co-benefits of mitigation action including on public health (e.g. Canada, Lesotho, UK).
To be considered implementable and investable, the signals in an NDC need to be complemented by actionable pathways that set out clear next steps and responsibilities for delivery. As NDCs are not legally binding documents, the ambitions set out need to be subsequently turned into corresponding policies and regulations. Experiences with current NDCs highlight the importance of laying out a solid foundation for how NDC commitments will be translated into concrete actions in different sectors (Jeudy-Hugo et al., 2024[51]; WRI, 2024[52]). Although NDCs are not required to include information on implementation, countries can share such detail in their NDCs to enhance information, clarity, transparency and understanding (ICTU) (UNFCCC, 2019[37]) or in subsequent BTRs (UNFCCC, 2018[53]). While 56% of countries provide some information on implementing instruments or plans in their current NDC (UNFCCC, 2024[21]), where such information is provided, in most cases it is not at the level of detail required to inform effective decision-making by key stakeholders. For example, from the perspective of private sector investors’ and businesses, current NDCs are not sufficiently specific to incentivise a significant shift in their investment decisions (see Box 6.6).
Box 6.6. The private sectors’ perspective on unlocking finance for NDCs
Copy link to Box 6.6. The private sectors’ perspective on unlocking finance for NDCsBy outlining a country’s climate targets, priorities, and policy commitments, well-designed NDCs and supporting documents can provide important signals to businesses and investors of policy stability and direction and provide an overview of available opportunities for investments and innovation in a country (We Mean Business Coalition, 2024[54]). For businesses, aligning strategies with NDC goals can create competitive advantages, opening access to tax incentives, subsidies, and smoother regulatory pathways for climate-focused projects. For investors, NDCs help reduce policy uncertainty by providing a clear roadmap of priorities, making it easier to channel capital into profitable, climate-aligned opportunities. For example, a consultation exercise carried out in Australia with key investors to understand the importance of NDCs in their investment decisions, highlighted that NDCs are used as critical tools for comparing climate risk performance and identifying clean industry investment opportunities across countries. Some investors also rely on NDCs to guide portfolio construction, such as establishing thematic funds targeting environmental or transition impacts or screening out assets with higher climate risks. Moreover, NDCs help investors identify leaders and laggards in climate action, enabling more targeted engagement with the most ambitious governments (Candriam, 2024[39]).
Most current NDCs and supporting documents are not yet sufficiently specific and comprehensive for business and investors to consider them ‘investable’ (IIGCC, 2024[5]). Some investors and business find that current NDCs do not provide sufficiently granular detail on sectoral pathways and underlying macroeconomic country contexts, quantified investment needs and financing strategies, and supportive policies and regulatory frameworks to achieve NDC targets (IIGCC, 2024[5]).
NDCs and supporting documents need to be clearly connected to national circumstances and development plans. Furthermore, robust governance arrangements, intra-government co-ordination, and stakeholder engagement processes around NDC development and implementation need to be strengthened (CETEx, 2024[55]; IIGCC, 2024[5]). Some investors and researchers are calling for governments to design ‘national transition plans’ to enhance and complement NDCs, LT-LEDS, and other existing plans and strategies (Aviva Investors, 2024[56]; CETEx, 2024[55]). A well-co-ordinated transition planning framework could help to mobilise public and private finance for climate targets, while reducing complexity for market actors and supporting a whole-of-system climate response (Cesaro et al., 2024[57]; CETEx, 2024[55]). Additionally, enhancing harmonisation and consistency across NDCs, with interoperable metrics and targets that reflect national strategic ambitions, would facilitate the collection and analysis of consistent information for investment decision-making (CETEx, 2024[55]; IIGCC, 2024[5]).
To avoid overloading the NDC, actionable pathways to guide stakeholder decisions and steer financing to support NDC implementation can be set out in supporting documents and/or integrated in existing national, sectoral or subnational plans and processes. By layering information in this way, the NDC can remain a high-level signalling tool, supported by a succession of more detailed planning documents that provide a practical guide to take forward the NDC and inform subsequent decisions of key stakeholders. The scope and focus of more detailed information underpinning an NDC and where this sits in the broader ecosystem of planning documents and processes in a country, will depend on the national context, priorities and capacities (Jeudy-Hugo et al., 2024[51]). Different approaches include:
Developing separate documents alongside or after the NDC, such as a dedicated NDC implementation plan, investment plan or financing strategy, linked to relevant national or sectoral strategies. Clear, robust investment plans can enable investors to identify concrete opportunities (Hanrahan, 2024[58]) and reassure global capital markets that governments have credible strategies to achieve their climate goals (Candriam, 2024[39]), however to date, very few countries have such plans and strategies in place (Chapter 8).
Integration and mainstreaming in existing national, sectoral, and local planning documents and processes (see Table 6.1). This can improve coherence and alignment between the NDC and other wider processes such as NAPs (see Box 6.7) and requires careful planning and co-ordination within government (Chapter 7). In doing so, it is also important to consider coherence with related planning processes, such as the National Biodiversity Strategies and Action Plans (NBSAPs), however a discussion of linkages between NDCs and NBSAPs is beyond the scope of this report.
Table 6.1. Selected examples of supporting documents to deliver NDCs
Copy link to Table 6.1. Selected examples of supporting documents to deliver NDCs
Supporting document |
Purpose |
Content |
Relevance for implementable and investable NDCs |
---|---|---|---|
NDC Implementation Plan |
Detail how the NDC will be translated into policies and actions, including at the sector-level, supporting institutional arrangements and reporting processes. |
Review existing policy landscape; identify and prioritise measures and policies to achieve NDC targets; identify capacities, information, institutional and regulatory framework needs for NDC delivery and opportunities to review/revise existing frameworks to align with NDC; define roles/responsibilities of different actors, delivery timeframes, indicators to track progress, monitoring and reporting systems. |
Provide clear insights on how the NDC target will be delivered via supporting legislation, sectoral strategies or national policies can help to identify opportunities and risks (e.g. technological, investment) in different sectors and inform decisions by investors. |
NDC Investment Plan and/or Financing Strategy* |
Detail financial requirements, funding sources, and investment opportunities for NDCs. |
Cost assessments, financing strategies, prioritised project pipelines. |
Provide clear insights into funding needs and opportunities, facilitate targeted engagement with investors and business actors. |
Integrated National Financing Frameworks (INFFs) |
Co-ordinated platform to mobilise, align, and govern public and private resources to support NDC targets, national development goals and broader SDGs. |
Map out existing financing flows, assess gaps, and outline policy measures to bridge them. |
INFFs can serve to embed detailed NDC investment plans within a unified national financing architecture to inform investor decision-making. |
Sectoral Action Plans / Roadmaps |
Outline strategies and measures for key sectors to deliver NDC targets. |
Sector-specific targets, policy measures, technological pathways, and timelines, build on economy-wide modelling and analysis for NDC to ensure alignment and coherence. |
Help investors identify sector-specific opportunities and understand the regulatory landscape. |
Green Finance Strategies |
Develop frameworks to mobilise and manage financial resources for climate projects. |
Incentives for green investments, green bond guidelines, public-private partnership mechanisms. |
Create an enabling environment for investment by outlining financial instruments and incentives. |
National Adaptation Plans |
Identify objectives for adaptation and measures to achieve those objectives. |
Assessment of vulnerabilities to climate change impacts, objectives for addressing those vulnerabilities, information on how adaptation actions are to be implemented, and on how progress will be monitored and evaluated. |
Provides clarity about adaptation needs and priorities. |
Adaptation Investment Plans |
Identify priority investment needs and develop a financing strategy to meet those needs. |
Diagnostic of barriers to investment, identification of priority projects and strategy for financing those projects. |
Sets out a viable funding strategy to help finance the adaptation components of NDCs (where relevant). |
Note: Documents listed are not exhaustive and the choice, scope and focus of such supporting documents to an NDC will vary depending on the country context, circumstances and capacities.
*In principle, an NDC investment plan specifies the projects and resources required to meet NDC targets, while a financing strategy outlines how to mobilise and allocate funds to implement these projects. In practice, these terms are not universally standardised, and some countries use them interchangeably.
Box 6.7. Ensuring effective links between NDCs and National Adaptation Plans (NAPs)
Copy link to Box 6.7. Ensuring effective links between NDCs and National Adaptation Plans (NAPs)Article 7 of the Paris Agreement calls for countries to undertake adaptation planning, with flexibility about how these can be achieved, and for all Parties to provide and update adaptation communications to support peer learning, communicate support needs and contribute to the GST (UNFCCC Secretariat, 2020[59]). Adaptation communications can be either standalone or integrated in other documents including NAPs or NDCs. All OECD countries have at least one adaptation strategy, plan or similar documents to plan and communicate their adaptation objectives (OECD, 2015[60]). These documents in OECD countries have tended to be undertaken for domestic or EU-wide purposes, vary in presentation and structure, and are usually not submitted to the UNFCCC. For developing countries, the Cancun Adaptation Framework aimed to support the production of NAPs with the aim of mainstreaming adaptation into their policies, programmes and development plans. By the end of 2024, 60 developing countries had submitted NAPs to the UNFCCC and a further 89 are in the process of developing these documents (UNFCCC, 2021[61]).
An increasing number of countries use NDCs to communicate information on adaptation, with 71% of current NDCs including some adaptation components and around 10% of current NDCs being used as formal adaptation communications (UNFCCC Secretariat, 2024[8]). For example, Indonesia’s Enhanced NDC (2022) includes an Adaptation Road Map that outlines key actions for strengthening resilience (Republic of Indonesia, 2022[62]). More generally, current NDCs that include adaptation tend to provide information on impacts and vulnerability (92% of NDCs with an adaptation component), policy frameworks (96%) and NAP development (75%), however only 29% of current NDCs with an adaptation component explicitly mention links between adaptation and mitigation (UNFCCC Secretariat, 2024[8]).
There is the potential for the NDC and NAP processes to be mutually reinforcing, with effective adaptation plans and strategies providing the information and objectives subsequently communicated through NDCs. NDCs can raise the profile of adaptation, highlight the potential of co-benefits between adaptation and mitigation and help governments to communicate a coherent view of their climate policies. For example, Costa Rica’s first NDC (2020) outlined the country’s objectives for adaptation, based on its 2018 adaptation strategy. The subsequent national adaptation plan (2022) outlines an integrated approach for achieving the objectives (Government of Costa Rica, 2022[63]). Conversely, there is the risk of duplication of effort and confusion if the objectives and approaches are inconsistent.
A review of current NDCs found room for improvement in integrating NAP and NDC processes, with only 16% of current NDCs fully aligned with the country’s NAP and 68% partially aligned, where partial alignment means that the documents refer to each other, but there are differences in priority sectors or actions (Terton, Qi and Exell, 2024[64]). As both processes are iterative, albeit often on different timescales, there are opportunities to improve alignment over time. Potential options include making use of common co-ordination mechanisms on climate change (such as interministerial climate committees), explicitly making these links during the planning and development of each document, and aiming to align monitoring systems where possible (Terton, Dazé and Probst, 2019[65]).
Note: Case box drafted by Michael Mullan (OECD)
Countries could also develop sector-specific decarbonisation action plans or roadmaps to support delivery of their overall NDC target and take forward relevant calls in GST1. For example, a roadmap or action plan specifically tailored to the industrial sector can set objectives, including for high-emitting priority sub-sectors such as iron and steel and cement production aligned with the NDC target (IEA, 2025[66]). Such roadmaps and action plans could outline decarbonisation pathways for the deployment and investment in required low-carbon technologies such as improving energy efficiency, substituting fossil fuel use for process heat generation with direct use of renewables, increasing reuse and recycling and by reducing demand, and decarbonising production processes with carbon capture use and storage (CCUS) (OECD, 2022[67]; UNIDO, 2025[68]). Another option could be to include industrial emission reductions in the NDC’s economy-wide GHG reduction target or set specific targets in the NDC covering the industry sector or its sub-sectors (WRI, 2025[69]), which could in turn feed into subsequent regulations and policy frameworks to guide industrial decarbonisation needs. Efforts focusing on decarbonising emission‑intensive industrial production processes would also contribute to global calls in the GST1 to accelerate zero- and low-emission technologies, including, inter alia, renewables, nuclear, CO2 abatement and removal technologies such as CCUS, particularly in hard-to-abate sectors, as well as low-carbon hydrogen production (UNFCCC, 2023[6]). Given the significant contribution of the industry sector to global CO2 emissions of as high as 40% globally (OECD, 2022[67]), there are various efforts to include and strengthen industrial decarbonisation actions in the next NDCs through targeted support and enhanced international co-operation. The latter is particularly important for EMDEs where a significant scale up in financial and technical is required to decarbonise rapidly growing industrial activities (OECD/Climate Club, 2024[70]). On‑going support for industry decarbonisation include efforts through the Climate Club’s Global Matchmaking Platform (Box 7.11), UNIDO’s Net-Zero Partnership for Industrial Decarbonization, the Industrial Decarbonization Program (IDP) under the World Bank’s Energy Sector Management Assistance Programme (ESMAP) and UNDP’s Climate Promise among others (see Box 6.8).
Finally, robust governance arrangements and inclusive processes that secure buy-in from stakeholders and build relationships with the private sector are essential enablers of implementable, investable NDCs. In many countries, current governance structures and institutional arrangements lead to NDCs being developed in a siloed manner by Ministries of Environment/Climate with limited buy-in across relevant government departments. Effective delivery of NDCs requires moving beyond current siloed approaches towards a more robust, inclusive process that fosters collaboration and co-ordination among relevant actors within government and beyond through strong governance frameworks and inclusive stakeholder engagement processes (see Chapter 7). Governance approaches involving robust institutional arrangements and strengthened capacities can broaden ownership and enhance accountability for NDC delivery. Effective engagement with stakeholders can also build social acceptance and encourage collaboration with the private sector to support NDC delivery (see Chapter 7). Finally robust tracking and reporting processes, including through strengthened national monitoring, reporting and verification (MRV) systems and improved reporting through BTRs, are crucial to assess progress, understand gaps and inform improvements over time.
Box 6.8. Supporting industry decarbonisation: Insights from Türkiye and Bosnia and Herzegovina
Copy link to Box 6.8. Supporting industry decarbonisation: Insights from Türkiye and Bosnia and HerzegovinaAdvancing the decarbonisation of Türkiye’s Cement Industry
Türkiye is the fifth-largest cement producer globally and the largest cement producer in Europe. The cement sector accounts for around 14% of the country’s total GHG emissions and for almost half of the GHG emissions of the industry sector. Türkiye’s current NDC covers the industry sector, and the country is currently developing a ‘Green Growth Technology Roadmap’ for the sector.
The project, “Advancing the Decarbonisation of Türkiye’s Cement Industry” aims to support decarbonisation of the cement sector and contributes to implementing Türkiye’s current NDC which identifies the cement sector as a priority. The project brings together several government departments (including Ministries of Industry and Technology, Environment, Urbanization and Climate Change, Trade, Energy and Natural Resources), international and national project partners (including UNDP) and implementing organisations (including EBRD). To trigger a sector-wide transformation, the project takes a comprehensive approach that includes strengthening stakeholder capacities, revising the regulatory framework and implementing a financial mechanism that involves blending EUR 15 million of Mitigation Action Facility (MAF) funding with EUR 71.5 million in loans of EBRD co-financing to support pilot decarbonisation projects. The project is expected to result in GHG emission reductions of over 1.3 million tCO2e. The project will support the early adoption of energy efficiency, encourage the uptake of alternative raw materials used in production process, implement two pilot projects, finance the development of a Technology Implementation Action Plan (TIAP) and support the creation of an enabling policy framework. The project will also support the use of low-carbon cement in construction and ensure stakeholders in the construction sector are well-informed about different types of cement and their applications through capacity building and training efforts.
Supporting the decarbonisation of small- and medium-size enterprises (SMEs) in Bosnia and Herzegovina
The "Inclusive Decarbonization Activity" (IDA) project, financed by the Government of Japan and implemented in co‑operation with the Ministry of Foreign Trade and Economic Relations, introduced a just transition mechanism in Bosnia and Herzegovina to support its reduced dependency on fossil fuels and implement its National Climate Plan. Strategic documents including ‘Just Transition for All’ and strategic guidelines for a just transition in three carbon-intense industries (power, steel and cement) were developed under the project, accompanied by capacity building activities for stakeholders, vulnerable groups and industry.
Financial and technical support was provided for the decarbonization of 20 SMEs in the three target industries to facilitate the implementation of energy efficiency measures and renewable energy technologies in their operations, with staff receiving training to manage associated changes. The project leveraged an additional USD3,38 million of private sector investments in decarbonization from a USD1 million project contribution. Decarbonization projects in the 20 SMEs were identified through energy audits and include the installation of 10 solar PV stations with a capacity of 3,5 MW, 9 heat pumps with a capacity of 307 kW and 16 energy efficiency measures, which support the NDC target of 400 MW in solar power and the target of achieving a 10% share of own electricity production in industry by 2030. The decarbonization projects are expected to contribute to reducing CO2 emissions by 3,804.80 tCO2 annually or 40,760.60 tCO2 during the lifetime of investments. The project also provides support for vulnerable groups, for example through retraining coal industry workers, and organises educational sessions on the importance and opportunities of the transition.
Note: Case box drafted by: Susanne Olbrisch, Christopher Marc Lilyblad, Snezana Marstijepovic and Lisa Baumgartner (UNDP)
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