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How climate targets can help economic recovery

Instead of delaying updates to nationally determined climate targets while Covid-19 continues, governments should consider how these targets could be used to leverage the economic contribution of nature-based solutions.

With the world gripped by the Covid-19 pandemic, policymakers have turned their attention to economic stimulus and financial support of households and firms. As a result, many countries have been delaying the preparation and submission of their new emissions-reduction targets under the Paris climate agreement.

These updated targets, known as nationally determined contributions, or NDCs, were originally due earlier this year, ahead of the COP26 climate-change conference in Glasgow, Scotland in November. But that, too, has been postponed.

The switch from summits to stimulus is understandable. But we should not lose sight of the important role that NDCs can play in economic recovery efforts. NDCs are among the best vehicles for governments to articulate their vision of future economic growth and technological transformation, both of which have clear links to job creation.

Moreover, setting the targets provides a golden opportunity for countries to identify shovel-ready projects and activities that can deliver both climate and economic benefits.

Chile is a good example. The government announced an updated climate pledge in April, together with a new climate bill that is currently before the National Congress. The updated NDC links climate action to sustainable development and a just energy transition.

At its core is a commitment to achieving carbon neutrality by 2050, and it is easy to see how the government’s pandemic response can help to achieve this goal by accelerating the necessary transitions in the energy and transportation sectors.

But Chile’s new NDC also shows another front where countries’ economic recovery plans can receive a significant boost: nature-based solutions. The NDC demonstrates an understanding of the role nature can play in achieving carbon neutrality, as well as in adapting to the effects of climate change and recognising the importance of creating and maintaining natural carbon sinks.

For starters, Chile’s climate plan links ocean and climate health, while acknowledging the economic value of coastal ecosystems. We don’t need to look far for an example of how healthy marine ecosystems support local economies. In Mexico, in the Gulf of California and the Baja California Peninsula alone, marine ecosystems generate $518 million in annual tourism revenues and directly account for at least 3,575 jobs.

Given Chile’s extensive coastline, the possibilities are much likely orders of magnitude higher. The NDC does not disappoint in this regard: It includes a commitment to turn 25 per cent of its exclusive economic zone into a protected area. If properly implemented, this pledge would create new economic opportunities for the country.

The new NDC also significantly strengthens Chile’s commitments regarding forests. The government has doubled its target for sustainable forests management and restoration from 100,000 hectares to 200,000 hectares by 2030.

Likewise, it will plant 200,000 hectares of new forests (up from 100,000 hectares), of which at least 100,000 hectares will comprise permanent forest cover and at least 70,000 hectares will be native species. Finally, Chile has said it will cut emissions from deforestation and land degradation by 25 per cent by 2030.

The link to economic growth (albeit understudied and underappreciated) is clear here as well. Pursuing these targets will enable governments to create a variety of jobs, including foresters, botanists, machinery operators, and laborers. And restored landscapes offer additional benefits.

A 2016 study by the World Resources Institute found that in Latin America, reviving degraded lands would yield $23 billion in net benefits over a period of 50 years. On average, farmers who restore their land can earn an extra $1,140 per hectare in net economic value.

Let’s be clear: Chile still has some way to go to achieve the targets in its original climate pledge. The government’s response to Covid-19 has thus far been a mixed bag, and it has yet to demonstrate any serious commitment to advancing climate action since releasing the plan months ago.

But, at the very least, Chile’s NDC gives us a good example of what an NDC can and should be: not a legally binding policy document, but a political signal to ministries, private-sector actors, and development-finance institutions to identify and pursue opportunities to link a government’s climate plans to economic recovery.

Each updated NDC creates greater political momentum and builds the international trust we need to combat climate change. Instead of delaying work on the NDCs while the pandemic continues, governments should consider how these targets could be used to leverage the economic contribution of nature-based solutions.

In short, climate action, as expressed through an NDC, can go hand in hand with economic recovery plans. When nature is protected, it has much to offer in return.

Francisca Tondreau is Country Director for Chile, Paraguay, and Bolivia at The Nature Conservancy.

Copyright: Project Syndicate, 2020.
www.project-syndicate.org

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