The upcoming European Commission proposal for the CBAM is scheduled for formal release on July 14, 2021, with the international trade and climate policy community alike watching closely to see what the mechanism could entail.

The coming months are then expected to see intense haggling among the EU institutions for a final version of the CBAM, which will be part of the bloc's wider "Fit for 55" package of climate and energy legislation designed to meet its emissions reduction target of 55 percent relative to 1990 levels by 2030.

As this process unfolds, how the CBAM will affect those countries most vulnerable to climate change - including least developed countries and small island developing states - is a crucial question and one that merits greater attention.

This briefing explains:

• the differences between the draft language of the European Commission proposal and the European Parliament's position, and what these options mean for climate vulnerable countries;
• which climate vulnerable countries will be most affected, considering which sectors are likely to be covered under the early stages of a CBAM, which countries rely strongly carbon-intensive sectors, and which countries count the EU as a major export market;
• what the CBAM could mean for international climate action efforts under the United Nations Framework Convention on Climate Change (UNFCCC);
• how the revenues from the CBAM could support the transition to low-carbon economies abroad and why the final CBAM should adopt this approach; and
• how the design of this CBAM and complementary measures can account for the interests of least developed countries and other climate vulnerable economies and why it is crucial to have an integrated strategy on trade, development, and climate.

This joint briefing was prepared by the Institute for European Environmental Policy (IEEP), the Institute for Sustainable Development and International Relations (IDDRI, by its acronym in French), the International Institute for Environment and Development (IIED), IISD, and the Overseas Development Institute (ODI).

This report, Toward a National Adaptation Strategy for Canada: Key insights from global peers, outlines some key issues and considerations that can help the federal government kick-start the development of Canada’s NAS.

The aim is to provide context and direction for the process so that the federal government can quickly get started. It reviews the global trends in adaptation planning, summarizes federal adaptation efforts to date, and builds on both to lay out some of key considerations for Canada’s NAS. International experience and good practices identified were drawn from an examination of 12 adaptation policy instruments from 11 countries, in combination with key informant interviews. The policy instruments were assessed in terms of the emphasis on scientific assessments of climate vulnerability and risks, the use of detailed frameworks for prioritizing risks and adaptation solutions, the number of defined adaptation actions, the inclusion of adaptation targets and indicators, references to progress reporting, and the degree to which they addressed social inclusion. The country review revealed that:

• Legislative backing for adaptation action at the national level is on the rise, with more countries adopting laws in recent years.
• Iterative adaptation planning is taking place, with more than half of the policy instruments examined having recently been updated or are about to be updated.
• Most countries reviewed have codified who is responsible for coordinating adaptation action at the national level and between jurisdictions.
• Many countries have defined cycles of climate risk assessment, planning, implementation, and review, and most countries articulate a clear process and timeframe for progress reporting.
• Almost all policy instruments reference social inclusion issues, but very few emphasize matters such as gender equality regularly and throughout.

Reflecting on the current state of adaptation policies, institutions, and knowledge resources in Canada, along with findings of the international review, the report offers 13 mutually reinforcing considerations divided into four main aspects for Canada as it develops its strategy. These are:

1. Set the stage for a successful NAS development process

• Define the exact role and purpose of the NAS
• Specify clear institutional arrangements for the NAS
• Build an inclusive and progressive engagement process

2. Include core elements for mobilizing federal action on adaptation

• Develop a unified approach to climate risk assessment at the national level
• Enable policy alignment around climate-resilient development
• Leverage the NAS to advance reconciliation with Indigenous Peoples in Canada
• Design a clear framework and system for tracking progress in adaptation

3. Facilitate early and sustained action

• Bridge the implementation gap
• Create a knowledge management strategy

4. Position Canada as a leader on adaptation

• Put gender equality and social inclusion at the heart of Canada’s approach to adaptation
• Recognize the employment and labour aspects of adaptation
• Elevate the role of nature in managing climate risks
• Address adaptation issues outside of Canada’s borders

With these considerations in mind, the federal government can work with other governments and key stakeholders throughout Canada to develop a unified vision and approach to preparing and protecting Canadians against the accelerating impacts of climate change.

The true value of the benefits that humans gain from nature is usually not reflected in economic transactions. Attaching a monetised value to these benefits is a necessary step towards addressing the massive gap between investment in activities that are harmful to nature and investment in those that protect nature.

Republished with permission from Luc Hoffmann Institute.

Climate economic modelling is a critical process that informs policy makers of the costs, benefits and potential trade-offs of climate risks and climate change adaptation on the economy. It can be useful to support problem framing, stakeholder engagement and awareness raising, and advocacy and communications related to climate change.

This guide offers a framework to help economic advisers in central and sectoral government ministries to integrate climate economic modelling results in economic development processes, with the ultimate objective to support climate-resilient economic development. The framework identifies nine indicative entry points and provides input on how to select the most appropriate one depending on the immediate opportunities and needs of the country.

This working document was developed by the International Institute for Sustainable Development (IISD) as part of the global program “Policy Advice for Climate-Resilient Economic Development (CRED)” implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU).

The gas industry increasingly sees its future growth potential in the Global South. Gas advocates are calling on governments, especially in Asia and Africa, to pave the way for gas expansion. New liquefied natural gas (LNG) exporters such as the United States and Australia are seeking new markets, while gas companies look for new resources to extract and export. Efforts to expand gas are underpinned by international public finance from multilateral development banks (MDBs) and G20 bilateral financial institutions such as bilateral development banks and export credit agencies.

This report finds that:

• Gas projects in low- and middle-income countries are receiving more international public finance than any other energy source: four times as much as wind or solar.
• This finance risks driving a new dash for gas that locks countries into a high-carbon pathway, imperilling their economic future and the global climate. 1.5°C scenarios published by the Intergovernmental Panel on Climate Change see global gas consumption declining by 55% between 2020 and 2050 and unabated gas power generation by 87%.
• Gas is not needed as, for most of its uses, renewable-based alternatives are either already cheaper or are expected to be within a few years.
• Renewable electricity is an increasingly cost-competitive and effective means to provide clean cooking, helped by improvements in the efficiency of electric stoves and devices.
• Countries in the Global South need greater international support to finance clean energy projects, including to help integrate renewables into often weak or unstable electricity grids.

This report examines the challenges in more depth in three case study countries:

• Argentina today relies heavily on gas consumption and remains trapped between high subsidies and debt. While renewable energy is cheaper over its full life cycle, the higher upfront capital costs have been prohibitive, especially with unfavourable borrowing terms.
• Egypt has put renewable energy development on hold in order to prioritize gas; it aims to become a gas trading hub, but this strategy depends on European gas demand, which may not be sustained as climate pressures increase.
• India is a fast-growing importer of gas but has already experienced asset stranding once, with more than half of installed gas power capacity sitting idle due to the high cost of imported gas. The current expansion of import and distribution infrastructure threatens a second phase of redundancy as energy economics transform and renewables grow ever cheaper.

The COVID-19 pandemic has exposed how rapid global change can affect countries in deeply inequitable ways and re-emphasizes the importance of building resilient and socially just economies. As economic resources remain constrained in the coming years, it will be vital that scarce public funds are devoted to building back better.

This report recommends that international public finance should no longer support fossil fuels and should instead focus on creating the enabling conditions for countries to build energy systems based on renewable energy.

At a time when emission reductions are urgently needed, G7’s COVID-19 response will either accelerate the transition to cleaner, more equitable societies or lock the planet into catastrophic and irreversible climate change. Yet between January 2020 and March 2021, and despite collective pledges to "build back better" and reach net-zero emissions by mid-century, G7 nations have been pumping more money into fossil fuels than they have into clean energy. The window of opportunity is small, but the G7 can still get back on track and support a fossil-free recovery. The G7 Leaders’ Summit is the opportunity to send the right signal to the world and take concrete steps toward building back better.

This report recommends that the G7:

• Adopt a "do-no-harm" principle by ending any support to the production of fossil fuels and by attaching significant "green strings" to any remaining support to fossil fuel-intensive sectors.
• Dedicate a minimum of 40% of total COVID-19 recovery spending to green policies and measures (the current figure is 22%, according to the Global Recovery Observatory).
• Enable a green recovery for all by continuing to ease the debt burden faced by a rising number of low- and middle-income countries by doubling climate finance pledges, ending overseas finance to fossil fuels, and using the G7’s influence on multilateral development banks to align their activities with the Paris Climate Agreement.

The report uses data from the Energy Policy Tracker and draws on findings from other recovery trackers such as the Greenness of Stimulus Index, the Green Recovery Tracker, and the Global Recovery Observatory. It analyzes a total of 517 policies approved between January 1, 2020, and March 3, 2021.

With each passing day, more countries—and, increasingly, more companies—pledge to limit global warming to 1.5°C by reaching net-zero greenhouse gas (GHG) emissions by 2050. Collectively, countries with net-zero targets represent 61% of global GHG emissions, 68% of global GDP, and 52% of the global population. Companies with net-zero commitments together represent sales of nearly USD 14 trillion.

Net-zero is the new normal.

And a growing body of research, modelling, and analysis is beginning to paint a picture of how countries can get to this point by mid-century. Across all the studies, there are several findings that stand out:

1. Energy efficiency and electrification—substituting clean power for fossil fuels—have the capacity to deliver the greatest contribution.
2. While most efforts to date have focused on carbon dioxide (CO2) emissions, we must also reduce other greenhouse gas emissions, such as methane and hydrofluorocarbons. 
3. The decarbonization of heavy industry is challenging but essential, and hydrogen could prove a key enabler of these reductions.

The long-term market outlook for Alberta's oil sector is bleak. By the end of this decade, a combination of market forces, international climate policies and geopolitics will push the sector beyond a tipping point and drive its long-term decline.

This is new. The oil sector has never experienced an outlook like this, in which demand and prices fall without prospect of recovery—and its decline, beginning by the end of this decade, will put Alberta’s economy to the test.

Modelling for low oil prices shows material drops in provincial GDP, royalties, and employment from the oil sector. However, price volatility poses a much greater threat than low prices to the Alberta economy. When we apply the kind of price volatility that we’ve seen over the last 37 years to the next 30 years, the damage to Alberta’s economy can be more than five times worse in our modelling.

This is a dynamic that standard economic projections ignore.

A prosperous Alberta will need to depend less and less on the oil sector, at least in so far as production of oil for combustion. Governments should target support and investments at diversification, new growth opportunities, and a just transition for workers and communities.

Read the report, then join our event: Oil and The Future of Alberta's Economy.

Indonesia’s liquefied petroleum gas (LPG) subsidies are not only an increasing drain on the country’s budget, but they are also inefficient from a social equity perspective, as most of the subsidies go to the wealthier classes of society. The Indonesian government is therefore planning to target LPG subsidies through a closed distribution system so that access is limited to the poorer segments of society. Despite a commitment from the government to change the policy, the implementation of such a closed system was delayed repeatedly over the last few years, justified by, among others, the hardship of the COVID-19 crisis.

Yet, other emerging economies have shown that times of crisis do not necessarily need to result in backtracking intended policy reforms—they can also provide an opportunity to reform fossil fuel pricing and strengthen a country’s welfare state. Three case studies and an analysis of the lessons learned from each country’s experience are at the heart of this report.

Based on that analysis, we have the following four recommendations for Indonesia’s LPG subsidy reform:

1. Indonesia should shift LPG subsidies away from the wealthy and use the money to support those who suffer most from the crisis.
2. Indonesia should accompany LPG subsidy reform with a robust data collection process to ensure that all intended beneficiaries retain access to subsidized LPG.
3. Indonesia should accompany LPG subsidy reform with a robust public endorsement plan to proactively engage other political and influential groups, as well as communicate objectives, benefits, and potential compensatory measures.
4. Indonesia should make use of the momentum of the low oil prices, as they can act as a buffer to potential economic shocks and help limit opposition to reform.

In 2020, governments in the G20 and 11 other major economies committed at least USD 277 billion to fossil fuel-intensive sectors—47% of all recovery funds spent on energy production and consumption. This is on top of the usual hundreds of billions of USD spent on fossil fuel subsidies each year outside of COVID-19 stimulus measures. We are running out of time to change course, and if this opportunity is missed, it could lock us into a fossil fuel future that we cannot afford. This report lays out a blueprint of how to do so, proposing five principles that governments can follow to boost their economies, create jobs and at the same time meet climate and development targets.