By working with companies to build specific transition strategies in line with the Paris Agreement, we’re showing that holding climatic global warming to well below the 2°C is achievable!
The ACT-DDP project brings together two initiatives pioneered at COP21:
- The Assessing Low Carbon Transition (ACT) initiative, led by ADEME (the French Environment and Energy Management Agency), which provides a methodology for assessing companies’ emission reduction strategies;
- The Deep Decarbonization Pathways (DDP) initiative, sponsored by the French Institute for Sustainable Development and International Relations (Iddri), which develops decarbonization scenarios by sector and by country.
Yann Briand is ACT-DDP Project Coordinator at Iddri.
Rocio Caicedo Torrado is Project Manager of the ACT-DDP initiative at Ademe.
Daniel Buira is co-founder and Executive Director of Tempus Analitica, partner think-tank of the ACT-DDP project in Mexico.
How does this project tie-in with the goals of the Paris Agreement?
Yann Briand: The Paris Agreement ratified two complementary dynamics. On the one hand, it established that States should contribute to the global effort by committing to reduce their greenhouse gas emissions. On the other, with the Agenda for Action, the process for the first time officially recognised within the framework of international negotiations the importance of non-state actors - particularly companies - in decarbonization. The ACT-DDP project forms part of this vision, creating an interface between companies and national governments by providing them the tools for dialogue.
To achieve the goals of the Paris Agreement, profound economic transformations are necessary. That needs a plan, a trajectory, and coherent and detailed actions. The project gives companies the tools they need to achieve this, setting-out in concrete terms, by industrial sector and country, the potential shape of company transitions aligned with the Paris Agreement.
Daniel Buira: The Paris Agreement set a global goal of limiting climate change, holding the increase in global average temperature “to well below 2°C”, and as close as possible to 1.5°C. While this is a major achievement, the model does have limitations, with two deficits in particular being apparent. First and foremost is the discrepancy between the objective of the Agreement and the national commitments, which are insufficient to achieve this goal. This is the implementation gap. The second discrepancy lies between those commitments, and what in reality is necessary to achieve this goal. This is a deficit of ambition. Over recent years the benchmark for climate action has been the national commitment, which is very dangerous as national governments can think all they need to do is honour those commitments when in reality the global goal would be missed. The DDP-ACT project was among the first to highlight this deficit of ambition. In our project, the benchmark for ambition is not determined according to national commitments, but according to the scientific goal – “well below 2°C” – set out in the Paris Agreement and the IPCC scenarios.
In what ways is the project particularly innovative?
Rocio Caicedo Torrado: The innovation lies in the bringing-together of the ACT and DDP initiatives which each target different stakeholders: one, companies and the other, public policy-makers. The project facilitates dialogue between companies, public stakeholders and other key actors in the transition, such as investors. The aim is to jointly develop national transition strategies and a detailed vision by sectors. The ACT assessment methodology has been refined with input from the DDP. The outcome is that the reference trajectory employed to assess companies’ strategies is now at national, rather than global level, meaning the challenges can be represented more precisely and in greater detail for businesses. Further, we’re now working here in Brazil and Mexico - two regions in which ACT has never worked before - so new country-specific challenges are emerging connected with their development. For its part the DDP, which previously mobilised public and academic stakeholders, is opening up to the challenges faced by companies. Bringing the two initiatives together makes each more solid and more relevant.
Daniel Buira: From a company’s perspective, great potential exists for innovation. Companies know how to set decarbonisation goals for 2050, but defining the specific actions to achieve them remains a challenge. If we were able to help a company develop its transition strategy by providing sector- and country-specific tools, that would be a huge innovation. Companies have traditionally tended to view environmental regulation as rather onerous. The need for profound transformation is still something quite new. With this project, we’re providing guidance for their strategic decisions and setting out their constraints. The sectoral approaches developed in the project give them an idea of what’s coming for their sector. We show the transformations that are going to happen if the countries meet their climate commitments even before they’ve happened – it’s almost like having a crystal ball!
The main challenge in achieving climate goals is proving that it is actually in stakeholders’ interests to have recourse to low carbon energies. By working with companies to build specific transition strategies in line with the Paris Agreement, we’re showing that holding climatic global warming to well below the 2°C is achievable!
How do you envisage sharing this method so the project can be replicated going forward?
Yann Briand: The project is only in the test phase so far; we’re working with around ten companies in each of the two countries. To really reduce emissions, it will obviously have to be replicated, involving more companies per sector, more sectors and more countries. The focus should be on high-emitting heavy industry sectors. We’re planning to share the results on several levels – in addition to scientific publications, we’ll organise public presentations and dialogues with all stakeholders in Mexico and Brazil, as well as at regional level and at COP26, to reach the international community.
Rocio Caicedo Torrado: We’re also in the process of designing a website for the project, allowing us to share methodologies and results. The idea is that they can be easily explored sector-by-sector. Once the project’s finished, we plan to expand training in ACT methodology to companies in other Latin American countries. The approach will be good-to-go, while the network of stakeholders the DDP’s already worked with in Latin America could help us make swift progress in Ecuador, Argentina, Colombia or Peru, for example.
Daniel Buira: The project results will be freely accessible. If the project succeeds, it will give the public access to quality information on a particular sector, which in turn will give civil society the opportunity to take action itself. Scientific reports on climate change aren’t going to change anything on their own; we already have those, but sadly they just aren’t going to be enough. Change could come from businesses, but also from civil society, or other stakeholders. I also think cities and regions will probably be interested in our specific local results - for example in relation to transport.