Policy Brief

Current model-based financial regulations favour carbon-intensive investments. This is likely to disincentivize banks from investing in new low-carbon assets, impairing the transition to net zero. Financial regulators and policymakers should consider how this bias may impact financial system stability and broader societal objectives.

The worldwide trend of decreasing corporate tax in recent years has contributed to an increase in global carbon emissions, but implementing a global minimum tax rate of 15% could partially mitigate this impact. Policymakers should coordinate corporate tax policies with climate regulations.

Funding large-scale negative emissions through a carbon market designed for traditional emission reduction strategies risks exacerbating long-term economic inequality. We suggest exploring alternative financing mechanisms that address this concern and that still ensure decarbonization at reasonable costs.

Climate policy adoption in one country increases the probability of adoption in neighbouring countries. Governments can thus support global climate action by adopting a leadership role in climate policy and do not need to worry about freeriding behaviour.

Under current land-use regulation, carbon dioxide emissions from biofuel production exceed those from fossil diesel combustion. Therefore, international agreements need to ensure the effective and globally comprehensive protection of natural land before modern bioenergy can effectively contribute to achieving carbon neutrality.

A large gap exists between the concerns over the risks of climate change and the support needed for effective climate actions. We show that participating in a market where individuals make predictions on future climate outcomes and earn money can change climate attitudes, behaviour and knowledge.

Achieving net zero means balancing remaining emissions with carbon removal, and understanding the nature and scope of residual emissions is key to planning decarbonized energy and industrial systems. However, our analysis of long-term climate strategies shows that many governments lack clear projections for residual emissions at net zero.

Removing fossil fuel subsidies is important for mitigation and making carbon pricing polices effective. We find that removing subsidies on fossil fuels may not generate more public resistance (or support) than introducing a carbon tax, and by specifying alternatives for revenue recycling, the level of acceptability may increase.

High uncertainty exists in the projected climate change impacts on the Nile’s economies and water-dependent sectors. Under these uncertainties, managing the Grand Ethiopian Renaissance Dam cooperatively and adaptively can produce economic and water management benefits for Ethiopia, Sudan and Egypt.

Increasing climate ambition through 2030 will be crucial to limiting global peak temperature changes this century. Countries need to ratchet their 2030 pledges made in Glasgow to reduce temperature overshoot and consequently reduce the risks of irreversible and adverse consequences to natural and human systems.

Reforms are required to maintain a healthy and robust flood insurance market under future climate conditions for the United States. Therefore, policymakers should implement premiums that reflect flood risk and incentivize household-level risk reduction, complemented with regional flood adaptation investments.

Many companies purchase renewable energy certificates to report reduced emissions, but this may not lead to actual emission reductions. We need emission accounting that is both accurate and that incentivizes companies to make impactful contributions to decarbonizing electricity grids.

We find limited evidence that individual or household rebates (also called dividends) have increased public support for carbon taxes in Canada and Switzerland. In the presence of partisan and interest group conflict over climate policy, policymakers should not assume that voter support for carbon pricing will automatically increase with the inclusion of rebates.

We find that if all countries adopt the necessary uniform global carbon tax and then return the revenues to their citizens on an equal per capita basis, it will be possible to meet a 2 °C target while also increasing wellbeing, reducing inequality and alleviating poverty. These results indicate that it is possible for a society to implement strong climate action without compromising goals for equity and development.

Trade liberalization in the early 21st century increased the adaptation capacity of global food systems to climate change; further liberalization and trade facilitation could help to avoid dozens of millions being undernourished at mid-century. The global trade agenda should explicitly include climate change adaptation to achieve SDG 2 Zero Hunger.

Subscriptions to a free, weekly deforestation alert system available on the simple interface Global Forest Watch reduced deforestation in the protected areas and logging concessions of tropical African forests. This suggests that freely available near-real-time forest monitoring systems can help reduce emissions from deforestation if they are integrated with forest policies.

We find that the public prefers the costs of climate action to be constant over time, irrespective of whether average costs are low or high. Policymakers interested in combating global warming should therefore introduce policies that initially rely on stable cost schedules instead of the widely discussed alternative of ramping up costs over time.

Using a multi-sector model of human and natural systems, we find that the nationwide cost from state-varying climate policy in the United States is only one-tenth higher than that of nationally uniform policy. The benefits of state-led action — leadership, experimentation and the practical reality that states implement policy more reliably than the federal government — do not necessarily come with a high economic cost.