2023/10/28  NOAH Chinese

Alliance of CEO Climate Leaders share open letter to world leaders for COP28

• More than 100 CEOs and Senior Executives from Alliance of CEO Climate Leaders share open letter to world leaders ahead of COP28.
• Alliance of CEO Climate Leaders represents $4 trillion in revenues and 12 million employees.
• Every fraction of a degree counts in the race to net zero: we need transformative policies and actions to stand a chance of winning it.

This letter  is being released ahead of COP28 by the World Economic Forum on behalf of the Alliance of CEO Climate Leaders.

Limiting the average global temperature increase to 1.5°C is at risk of slipping out of reach unless there is a rapid increase in public-private collaboration and action to accelerate emission reductions across global value chains. Our alliance members have made individual emission reduction targets amounting to an estimated 1.0 Gt CO2e by 2030 – as sustained human action to eliminate greenhouse gas emissions has the potential to alter society’s course on climate. However, success is dependent on government support to overcome the following challenges:

• Complex and lengthy regulatory and administrative processes that slow the development of renewable energy projects and hinder the uptake of green and enabling solutions;
• Lack of suitable grid infrastructure with power networks unprepared to adequately integrate an increasing share of renewable energy;
• Technological constraints that delay efforts to scale up manufacturing capacity of early-stage decarbonization solutions;
• Limited harmonization and interoperability between reporting standards that diverge across sectors and jurisdictions.

Addressing these challenges will help maximize the impact of private sector ambition and action, therefore our asks to regulatory and policy-makers are to:

1. Massively scale up investment in renewable energy and power networks and streamline permitting and regulatory processes

While global investment in renewable energy reached a record $0.5 trillion in 2022, this is still less than a third of the annual investment needed towards 2030. Governments should therefore rapidly scale up renewable energy and invest in the required grid infrastructure including energy storage and supporting supply chains, also to increase private sector capital. We call on governments to complement this with stronger investments, policies and targets that enable the private sector to improve its energy efficiency.

The International Energy Agency estimates that global fossil fuel subsidies for consumption increased to an all-time high of $1 trillion in 2022. This is the wrong trajectory. Governments should phase out fossil fuel subsidies in a just and equitable way. Focus should be on funding clean energy and bio-based solutions through incentives such as the US Inflation Reduction Act and the EU Net Zero Industry Act, and the reskilling of workers in the energy transition.

In addition, cumbersome permitting processes are slowing down decarbonization efforts. The latest estimates show that build time for utility-scale solar and wind projects ranges from four to 10 or more years, depending on the geography. Policy change is needed to accelerate renewable energy projects and infrastructure while respecting a just transition, local communities and environmental standards.

2. Lead by example on public procurement practices

Public procurement is a significant share of GDP; 14% in the EU alone. The scale of this spending power could exert considerable influence in reducing emissions. If 14% of an economy adopts low-emitting procurement practices, this will send a strong market signal to suppliers to improve their products and services and can facilitate the uptake of breakthrough solutions. We call on governments to set ambitious, science-based procurement targets to create demand drivers and support the development of supply chains.

3. Turbocharge nature- and technology-based carbon removals

While it can never replace mitigation efforts, investments in technology and nature-based carbon removal must accelerate given the increasing risk of overshooting 1.5°C. Governments should therefore set appropriate carbon-removal targets, include them in their nationally determined contributions (NDCs) and National Biodiversity Strategies and Action Plans (NBSAPs), and develop supportive regulation for the conservation and regeneration of existing carbon sinks.

In addition, they should incentivize corporate investments through an enabling regulatory environment and carbon markets. This includes high-quality credits and a carbon-pricing approach reflecting the true costs of climate change.

4. Simplify and harmonize climate disclosure and measuring standards

We recognize the importance of strengthening and streamlining reporting standards and acknowledge their positive impact on climate action. For global companies, harmonized disclosure and measuring standards are essential in providing high-quality and transparent information while ensuring efficiency. We call on all standard-setters, including the International Sustainability Standards Board (ISSB), the European Commission, the US Securities and Exchange Commission (SEC) and other regulators, to continue to harmonize reporting requirements and ensure interoperability and reciprocity.