The Paris Agreement invites all Parties to establish and communicate long-term low greenhouse gas (GHG) emission development strategies. Each strategy should include a pathway to be implemented by the second half of the century which takes into account the institutional, economic, financial, technological and social changes needed to achieve sustainable, low-carbon development in a more resilient environment.
The aim of the 2050 Facility, set up in 2018 as part of France’s commitments at the One Planet Summit in Paris, is to support AFD's partner countries in the implementation of this pathway.
This new facility, which has received €30 million in the form of grants, has been developed by AFD to strengthen climate policy dialog through the financing of studies and capacity-building activities.
Its creation marks the launch of a multi-year, cooperative approach involving some 30 countries which are being supported by AFD in their transition strategies, in line with the objectives set by the Paris Agreement;
Advancing Development Strategies in Line with the Fight against Climate Change
The effects of global warming (rising sea levels, droughts, floods and weather-related disasters) are already visible today, posing new risks to the development of the poorest countries and undermining the socio-economic progress made in recent decades.
It is often because many governments are not capable of quantifying the extent of future impacts that they are less willing to establish and finance development policies tailored to these new challenges.
Nevertheless, it is essential that the effects of global warming are mitigated, by reducing our GHG emissions as quickly as possible. The highest emitting countries must make a marked effort to achieve this, using the resources at their disposal as well as those contributed by the international community.
For their part, stakeholders in the development sector must work to raise awareness of climate issues among decision-makers at all levels, by raising financing for climate change adaptation and GHG-emission reduction policies in the countries of intervention, particularly with regard to long-term investment projects (energy, agriculture, forestry and other land use, transport, buildings, industry and land use planning).
Nationally Determined Contributions and Long-term Strategies: Adopting an Integrated Approach
Nationally Determined Contributions (NDCs) are a requirement of the Paris Agreement. Each country must provide regular updates on the actions taken to reduce its GHG emissions. This is the main purpose of the climate plans, which are regularly reviewed. They should provide evidence of the efforts made by each country to keep the rise in global warming well below 2°C, and of more sustained efforts to limit this increase to 1.5°C relative to pre-industrial levels.
Defining each country’s NDCs is mandatory, but the medium-term target set for their implementation by 2030 does not, in most cases, allow for an in-depth review of the development models already being followed. Nor does the tight deadline allow these objectives to be sufficiently ambitious to be fully aligned with the Paris Agreement.
Conversely, the development of long-term strategies (LTS) enables various decarbonization scenarios to be explored for individual countries, helping in the drafting of shorter-term decisions, including those relating to the revised NDC targets. LTSs thus provide an opportunity for governments to forecast the budgetary and financial costs of their initiatives and to identify the policy reforms and priority investments required to build toward a resilient, low-carbon future. They also serve as a valuable guide for finance and development players who want to support sustainable and inclusive development.
As important as an LTS may be, there is scope for improvement. Specifically, these strategies should take into account the Sustainable Development Goals more comprehensively at the design phase. All stakeholders should be involved at each stage of the country’s development to ensure that everyone has a better understanding of the transformations required, which could be the subject of a new social contract.
The AFD solution
The purpose of the 2050 Facility is to support technical cooperation and capacity-building activities. To this end, it finances studies aiming to provide recommendations to inform strategic thinking in countries committed to developing long-term strategies. The Facility can assist in the definition of sector-wide goals, and/or the redefinition of public policies to drive change, and/or the implementation of strategies in sectors with major climate challenges.
Ownership of the process is ensured through institution-based support, the participation of institutions in partner countries such as government ministries, universities, research centers, and think tanks, as well as by consulting with the different stakeholders and various actors (public and private sectors, civil society) to develop plans and programs, and share results.
There are many opportunities for intervention which may involve:
- macroeconomic modeling of the transition, specifically, through the use of the AFD GEMMES model
- energy transition: sector-wide modeling of energy pathways, capacity building in relation to modeling tools; modeling and optimization of electrical power systems; the macroeconomic impacts of energy transition, transition risks
- mobility and urban development: roadmap for the decarbonization of the sector, long-term transport plan, land use planning, mobility policies, urban development policies, support for the integration of climate policies
- ecological transition and natural resources: long-term strategies for the protection and management of forest resources, water resources in their multiple uses, rural development, land use planning, meeting food requirements
- demographic and social transition: impact assessment and policy development for adaptive social protection, redeployment models for resources used to subsidize fossil fuels, vocational training and just transition.
- Algeria: Prospective Study of Energy Transition Scenarios until 2050
Algeria is one of the main exporters of gas in the world, with an economic model that is heavily dependent on hydrocarbons. Committed to reducing its GHG emissions by 7% to 22% by 2030, the Algerian Ministry of Energy has asked the 2050 Facility to support a cooperative technical project to model its energy transition and development pathway until 2050.
- China: Public Policy Dialog on the Energy Transition Pathway
The 2050 Facility is supporting the implementation of public policy dialog, launched by the International Energy Agency (IEA) in collaboration with the Chinese authorities, by financing studies that aim to inform the development of a long-term strategy, the design of a national Emissions Trading System (ETS) and the optimization of the electrical power system with a view to integrating more intermittent renewable energies into the grid.
- Colombia: Development of the 2050 Strategy for Low-carbon and Resilient Development
The 2050 Facility is assisting the Colombian Ministry of Environment and Sustainable Development with various activities (studies, stakeholder consultations, consultant support), which should culminate in the publication of its long-term strategy. This strategy will constitute the country's roadmap for the transition of its economy towards decarbonization, while integrating climate change adaptation issues and disaster risk management. This project is being implemented by Expertise France.
- Indonesia: Study on Energy Efficiency as Part of a Low-carbon Transition Initiative
Indonesia's national energy policy aims to reduce the country's energy intensity by 1% per year until 2025. The Indonesian Ministry for Planning is developing its modeling tools to implement a renewed and more ambitious policy on energy efficiency, which takes into consideration financial incentives and a more appropriate regulatory framework. It also requires up-to-date data to set more realistic energy efficiency targets.
The 2050 Facility is supporting the development of a model to produce recommendations for sector-wide policies, regulation and investment, and will help in the drafting of an energy efficiency action plan for the industrial sector.
- Morocco: Prospective Study on Climate Change Adaptation Scenarios for 2050
The 2050 Facility is supporting the Moroccan Ministry of Economy and Finance in analyzing the impact of different climate scenarios on the Moroccan economy through the development of a GEMMES model, (modeling tool developed by AFD), adapted to the country context. The purpose of this study is to examine the viability of the irrigation-based agricultural development model in light of the increasing aridity in the region over the last few decades.
More generally, this modeling support will provide the country with a new tool to inform the development of its economic policy, by adopting a long-term perspective. This project is complementary to the support provided by the 2050 Pathways Platform to assist Morocco with the development of its long-term strategy.
- Pakistan: Modeling of GHG Emissions
Support is being provided to the Ministry of Climate Change (MoCC) in order to develop comprehensive modeling of the country's GHG emissions, which goes beyond the energy sector. The agriculture, forestry and land-use sectors, which are not yet covered by the existing model, will be included. This support project also aims to develop a set of reduction scenarios that are either in line with the public policies currently under consideration, or which set even more ambitious goals. Ultimately, the analysis will help to identify potential strategies for GHG reduction by sector and establish their cost.
- Vietnam: Analysis of the Socio-economic Impacts of Climate Change and Medium- and Long-term Adaptation Strategies
Vietnam is one of the five countries in the world most vulnerable to climate change. In light of this, AFD has developed the GEMMES modeling tool to produce an integrated study of the socio-economic impacts of climate change and potential adaptation strategies, for the country to construct a resilient development trajectory. This project is being implemented in collaboration with the Climate Change Directorate of the Vietnamese Ministry of Natural Resources and Environment and the IRD (French National Research Institute for Sustainable Development).
In addition, the 2050 Facility also supports the Ministry of Planning and Investment in integrating climate issues into its strategies and its socio-economic development plan.
- Multiple countries in Africa: Deep Decarbonization Pathways
The DDP initiative led by IDDRI aims to support governments and non-state actors in developing decarbonization scenarios. The 2050 Facility is planning to provide assistance in African countries (e.g. Nigeria, Senegal: other countries to be determined) where the decision has been made to integrate low-carbon and resilience climate goals into their policies from the outset. The broader aim is to establish development pathways that address urgent short-term economic, social and environmental issues while meeting long-term needs.