The passage of the historic Inflation Reduction Act (IRA) last summer was a landmark for climate progress. But it was also just the first step in creating a thriving low-carbon economy. The year ahead will be crucial in determining whether we can maintain momentum and realize the full promise of IRA’s $370 billion investment in climate and clean energy. And even more ambitious actions will be required – in the White House, in Congress, and in the international arena – to meet the U.S. commitment to cut greenhouse gas emissions 50 to 52 percent by 2030 and the Paris Agreement goal of limiting warming well below 2 degrees Celsius. All of that must happen in the face of myriad headwinds: a global energy crisis, war in Ukraine, a possible looming recession, and ongoing partisan division.
That’s why this year C2ES will be staying engaged with companies and policymakers to keep climate action at the top of their agendas, working with them to accelerate the net-zero transition in the United States, support the Paris Agreement, and strengthen climate resilience.
As we look ahead to 2023, here are six trends we’re tracking across those three areas of work, to ensure continued climate progress in the year ahead.
Accelerating the U.S. transition to a thriving net-zero emissions economy will require a continued push on policy and a narrative of economic opportunity.
- Implementation of IRA takes center stage alongside new opportunities : How Congress and the Biden Administration build on last year’s historic progress is the first key measure to watch. The temptation to declare victory on climate and move on may be strong – but the truth is that we need to do more on climate, not less, to capitalize on the potential of the IRA as well as the 2021 Infrastructure Investment and Jobs Act. C2ES is actively engaging with the members of our Business Environmental Leadership Council to provide advice and guidance to legislators and policymakers in Congress, the White House, and across the executive branch. In the coming weeks, C2ES will roll out our policy agenda for Congress and the Biden Administration, a collection of high-impact policy initiatives that can be achieved through legislative and administrative action. Bipartisan collaboration is all too rare in the current polarized environment. But the impacts of a warming planet – and the opportunities in the clean economy – cut across red and blue states alike. By working with policymakers across party lines who want to see progress on climate and energy, C2ES will lay the groundwork for the solutions that can attract support on both sides of the aisle, in areas including climate and trade; industrial decarbonization; funding for clean energy R&D; and nature-based climate solutions.
- The narrative of economic opportunity takes root: Over the past two years, C2ES has convened a dozen virtual and in-person regional roundtables in communities from Morgantown, West Virginia to Salt Lake City, Utah. These convenings take the climate policy discussion outside of the Beltway and into cities and regions around the country, focusing on specific, concrete economic opportunities from the low-carbon transition. We will continue to expand these roundtable conversations in 2023, engaging diverse stakeholders in regions around the country: state and local policy makers, economic development organizations, representatives of Fortune 500 companies as well as state and local businesses, researchers, and labor, environmental, and community leaders. Our aim is to build the broad, durable support for climate action that will be necessary to realize the promise of the IRA and create the conditions for further progress.
Supporting the Paris Agreement means ramping up implementation and finding new sources of finance.
- The global stocktake takes center stage: In December, climate leaders from around the world will gather in Dubai for the 28th Conference of the Parties to the UN Framework Convention on Climate Change. COP28 promises to be greatly consequential, featuring the first occurrence of the global stocktake, which will take place every five years to assess collective progress toward meeting the goals of the Paris Agreement. We see the stocktake as a vital opportunity not only to identify the gap between the emissions trajectory the world is currently on and where it needs to be, but also to focus attention on the policies and measures needed to close that gap. Only by helping countries meet the targets they have already made can we effectively encourage them to take on the more ambitious commitments the world needs. To that end, C2ES has undertaken a major, multi-year initiative to shape the stocktake, including by ensuring that it brings private sector and civil society voices into the room with government officials to share their experience and expertise about what works in the real world to reduce emissions.
- A high-integrity voluntary carbon market begins to take shape: This coming year will also be a crucial one for our efforts to promote sound governance of the rapidly growing voluntary carbon market (VCM). The VCM has enormous potential as a means of channeling finance into sustainable green growth and emissions reductions around the world, but it will only succeed if it has high integrity. C2ES is a member of the Executive Secretariat and a driving force behind of the Integrity Council for the Voluntary Carbon Market, which is establishing a threshold standard of quality for carbon credits to provide buyers with assurance. C2ES is also helping to shape the Energy Transition Accelerator, the pioneering initiative led by the U.S. State Department, the Bezos Earth Fund, and the Rockefeller Foundation that aims to channel new sources of market-driven finance into a rapid shift from fossil fuels to zero-carbon electricity generation in developing countries.
Businesses will play deeper roles in policymaking and seeking opportunities for voluntary emission reductions and strengthening climate resilience.
- Companies look to new tools to meet net-zero targets: Investors and financial regulators are increasingly recognizing that climate change poses significant and material risks to businesses across the economy – and companies are responding by setting net-zero targets in their operations and value chains. The Securities and Exchange Commission’s (SEC) final rule on climate risk disclosure, anticipated early this year, will set in motion changes across every economic sector for reporting and managing climate risk. C2ES is engaging with companies in our business council to help develop low-carbon transition plans: digging into the challenges they face, reviewing emerging best practices, identifying how disclosures and transition plans can become more decision-useful for investors and guiding policy makers to solutions that can help. Meanwhile, as companies dig deeper into implementing net-zero targets, expect 2023 to be the year that places greater demands on suppliers to address value chain emissions. We are working with partners to develop a high-integrity framework for companies to meet their scope 3 corporate climate commitments by being able to claim emissions reductions within their value chains – unlocking new sources of finance for investments in low-carbon technologies, especially in value chains that include hard-to-abate industry sectors.
- Climate resilience comes to the fore: While the burden extreme weather brings on communities isn’t new, the way communities respond will evolve as new resources from IRA and the bipartisan infrastructure law come into play. C2ES will be launching a new Climate Resilience Community Accelerator this year, leveraging our deep climate resilience and policy expertise, track record of convening successful regional roundtable discussions, and business relationships. The accelerator will support leaders in key regions to create new and stronger partnerships, overcome barriers to federal resources, and identify federal policy needs to accelerate resilience.
The gains made in 2022 will bring the United States closer to achieving its 2030 emissions target under its NDC—and the world closer to meeting the goals of the Paris Agreement. They also bring into focus the work still to be done to close the remaining gap. That’s where C2ES will be committing our time and energy in months ahead.