NDC 3.0 Regional Forum Asia: Paving the Way for the Next Generation of Climate Commitments

The NDC 3.0 Regional Forum Asia, held in Bangkok from September 30 to October 1, 2024, convened policymakers, climate experts, and representatives from various sectors. The forum focused on advancing the development of the next generation of Nationally Determined Contributions (NDCs) under the Paris Agreement due in 2025. This event underscored the importance of ambitious, inclusive, and actionable climate commitments to address the escalating climate crisis.

The UN Environment Programme (UNEP), the UN Development Programme (UNDP), and the NDC Partnership were the main organisers of the regional fora in collaboration with the UNFCCC Secretariat. Additional partners included the Climate and Clean Air Coalition (CCAC), the UN-REDD programme, and GIZ. Different IKI projects provided inputs to the forum and supported the participation of selected country delegations.

Key Takeaways from the Forum

Enhanced Ambition and Urgency: The forum emphasized the need for countries to elevate their climate ambitions to align with the goal of limiting global warming to 1.5°C. Discussions highlighted that current NDCs are insufficient and more robust targets are required. Speakers called for an accelerated transition to renewable energy, the phasing out of coal, and the adoption of energy-efficient technologies.

Inclusivity and Just Transition Ensuring that climate actions do not exacerbate inequalities was a central theme. The concept of a “just transition” was explored, emphasizing the need to support workers and communities affected by the shift from fossil fuels to green energy. Gender-responsive climate actions and the inclusion of indigenous knowledge and practices were also spotlighted as essential for comprehensive climate strategies.

Investable NDCs The mobilization of financial resources was identified as a critical enabler for NDC implementation. Participants discussed innovative financing mechanisms, including green bonds, climate funds, and private sector investments. The role of international cooperation in providing financial and technical support to developing countries was underscored, ensuring they can meet their climate targets. Investible NDCs require the early involvement of the Ministry of Finance in the NDC development process.

Transparency and Accountability Robust monitoring, reporting, and verification (MRV) systems were deemed vital for tracking progress and ensuring accountability. The forum advocated for transparent frameworks to measure emissions reductions and the effectiveness of climate actions. The importance of peer review processes and international cooperation in enhancing transparency was highlighted.

Technology and Innovation Technological advancements and innovation were recognized as pivotal in achieving climate goals. Discussions covered the deployment of clean technologies, digital solutions for climate monitoring, and the role of research and development. Participants also explored the potential of nature-based solutions, such as reforestation and ecosystem restoration, in mitigating climate change.

© UNEP

Recommendations and conclusions from the sessions

The 3-day forum covered a wide range of topics, below are some highlighted conclusions and recommendations from the different sessions.

Towards Investable NDCs

Stakeholder engagement is at the very core of the NDC development and implementation. Partners need to be kept informed and updated and we need data. Mainstreaming climate goals at different levels and across different sectors is very difficult.

Investment planning and mobilization needs planning documents such as a comprehensive investment planning framework.
Investment needs identification and prioritization and feedback loops. For example, Philippines have an investment promotion office which contributes to mobilizing resources and where they plan economic briefings to partners which helps guide investments.
Communicating needs to external partners is crucial. Accessing the external finance landscape and assessing which financial instruments are the best is difficult. More support is needed for countries to use these options effectively.
Tagging is not an immediate solution as national assemblies need to approve budgets, there is a need for high level political buy in for changes. There is also a lack of knowledge of NDCs in other ministries and private sector.
More engagement with stakeholders and private sector is needed.
There is a lack of clarity on conditional and unconditional aspects of climate finance and where private support fits in.
Financing is limited, so we have to be creative and explore all options, such as carbon markets.

Aligning NDCs with relevant national policy frameworks

All countries of Asia and the Pacific have submitted their Nationally Determined Contributions (NDCs) and many have submitted their updated NDC 2.0 including announcement of carbon-neutrality during 2050 to 2070. 18 Countries have submitted Long Term Low Emission Development Strategies (LT-LEDS). The alignment of NDCs with national policy frameworks across Asia varies by country but is generally focused on renewable energy expansion, reducing emissions in key sectors like energy and transportation, and enhancing climate resilience.

One key challenge that are faced by governments is mobilizing sectoral/subnational institutions to be the driver for current climate actions and development of new climate actions that are in competition with competing priorities.
Timeline for submissions of first BTRs and NDC 3.0 and data availability under the Enhanced Transparency Framework have been challenging for governments
For the enormous impacts of energy transition has on economies, partnership and cooperation such as Just Energy Transition Partnership have been instrumental thus expansion of similar partnership to other just transition in various sectors will drive more ambitious climate actions and ensure long-term sustainability and inclusivity of just transition.
Alignment of national long-term visions/strategies with climate actions has set forth sustainable pathways for public and private partnerships among domestic and international stakeholders to keep the 1.5-degree target within reach.
Adoption of Article 6 mechanisms in mainstreaming climate agenda to sectoral/subnational stakeholders has been demonstrated to foster new climate actions.
Investment in developing specific educational programmes on climate change and in supporting GHG emission data collection would ensure the continuity of national GHG emission monitoring, assessment, and analysis.
Engaging young professionals in raising awareness of NDC commitments would support better understanding and engagement of local governments and communities in the implementation of the NDC 3.0.

Monitoring and Tracking Progress of NDC Ambition and Implementation

Countries are diverse, with differing starting points, capacities and needs and so the expectations and realities on the monitoring and tracking of NDCs should be taken into account the setting ambitions. Indeed, this reflects a guiding principle of the NDCs as the main bottom-up driver of the Paris Agreement.

There was wide recognition of the need or desirability of shifting to economy-wide NDC targets (absolute limits), but this is easier said than done especially for countries that currently have emissions intensity targets. Recognition that sector specific abatement costs vary greatly and so need to be careful when setting economy-wide targets as this may affect national competitiveness and/or development ambitions (here baseline years are crucial and should be explained and justified).
Linked to the economy-wide targeting setting: many countries report challenges with a lack of comprehensive emissions data, how to oblige private sector actors (and perhaps also other line ministries) to gather and share data. In many countries, the ministries of environment are responsible for gathering data from sectoral line ministries, though technical capacities remain a constraint and so often don’t have full overview or control over data. Additional challenges surround the sale of carbon credits where some countries still lack a central registry.
A common challenge among countries are the institutional capacities and resource constraints to the reporting processes…some discussion about whether and how countries are tracking both conditional and unconditional targets. Widely acknowledged that countries should be clear about what data they have and then commit to report on things that you can actually report on, as opposed to setting a load of indicators for the sake of it. On this a related challenge is how to include informal economies into NDCs, where detailed economic data is often missing (but can account for up to 60% of GDP).

Mobilizing and leveraging means of implementation

The successful implementation of Nationally Determined Contributions (NDCs) hinges on addressing interconnected barriers related to capacity building, finance, and technology.

Tailored Approaches: Participants stressed the need for national-level solutions tailored to each country’s context, including localized implementation strategies.
Stakeholder Involvement: Encouraging more productive and frequent engagement with private sectors, civil society, and other non-government stakeholders at subnational levels.
Capacity Building: Countries such as Laos and the Philippines highlight the need for comprehensive capacity-building programs, not just for technical staff but also for policymakers and regulators.
Data Management and Sharing: Enhancing institutional capacity for data management and developing systems to share data among agencies.
Finance Solutions: Countries like the Philippines suggest improving capacity to package project proposals for international funding, while others push for private sector mobilization alongside international finance.
Technology and Innovation: Encouraging innovative solutions, such as integrating green technologies in agriculture and other sectors, while scaling up accessible, sustainable technologies.
Regulatory Frameworks: Emphasizing the importance of developing clear regulatory frameworks, particularly for voluntary carbon markets that the private sector can engage in.

Regulatory Frameworks and Policy instruments

Institutionalization and Coordination – Countries emphasize the importance of national climate committees or steering bodies that facilitate cross-ministry coordination. These committees bring together ministries with different mandates (e.g., NDC, LTS) and ensure that efforts are harmonized, despite differing priorities.
Consultative and Inclusive Processes – Countries highlight the importance of continuous consultative engagement. shift from conducting stakeholder consultations only at the end of the NDC process to having more frequent engagements strengthens buy-in and improves alignment. Development of NDC 3.0 should involve line ministries beyond the Ministries of Environment and/or Climate Change
Localized Climate Actions – they emphasize the significance of decentralization and localization of climate strategies. By involving sub-national governments, climate actions can be more contextually relevant and tailored to specific regional needs, leading to better implementation of NDCs and climate targets.

Role of Economic and Financial Instruments

Countries have different policies, instruments, mechanisms or processes in place, with the aim of supporting NDC implementation – there are trust funds, subsidies and incentives programs, feed in tariffs, green bonds, taxonomies, schemes, frameworks. It was also interesting to note that for some countries, these are driven/executed by governments, some with private sector particularly mentioning commercial banks.
Some countries were able to determine the cost of investment needed to implement NDC, mostly after the submission of their NDCs, with information on potential sources of finance – international and domestic, public and private; other countries require assistance in doing the costing for both conditional and unconditional targets. Ministry of Finance is often involved in the process.
In relation to this, some countries also mentioned that there are tracking systems in place to monitor finance and investments, but mostly only at public level through budget and expenditure tagging. This is also one of the opportunities that can be looked into as part of NDC 3.0 preparation.
There are also ongoing efforts related to private sector engagement as well as of other financing institutions, securing buy-in, catalyzing private sector climate investments.
Countries raised that there is also a challenge in striking fairness and balance when it comes to investments for adaptation and mitigation, noting that adaptation remains a priority.
There is a growing interest in the region when it comes to carbon markets, looking into policy implications, capacities, and systems in place, and how these can be integrated and mainstreamed to support NDC implementation.
In sum, opportunities are seen in areas of capacity enhancement and institutional strengthening including for ETS, carbon pricing, and activities related to Article 6 – both for government, private sector and financial institutions and other relevant stakeholders; capacities for costing NDCs, as well as monitoring and tracking climate finance flows from various sources; developing or revisiting policies, regulations, frameworks and strategies related to investments and financing for climate change, creating enabling environments for all stakeholders; and developing investment and financing strategies with appropriate instruments from the wider global climate finance architecture, all to support NDC implementation.

The Role of the Private Sector for Bankable Projects

It seems there are general policy and capacity gaps and lack of knowledge and/or disconnects between private sector business development and NDC planning
A more fundamental challenge is around high perceived investment risk, especially in LDCs, and a general lack of high-quality proposals for commercially viable projects, e.g. those with a solid business model and offering a return on investment.
The involvement of the Ministry of Finance from the start of the NDC process is key.
Highlighted the importance of setting up blended financing facilities, capitalized by either national state or international (bilateral or multilateral) funds, to help derisk and crowd in private capital investment.
Acknowledged that too often the private sector has been involved too late in the process, almost as an afterthought. But this never works: private sector should be involved from the start, to ensure investment opportunities are co-designed and co-owned. This can be a process that takes years, and so countries should involve private partners in the NDC revision process now, especially as we see NDCs as investment roadmaps more than just a document that set targets.
It can be helpful to engage private sector through trade associations and chambers of commerce, to help convene, organize and communicate NDC ambitions into language that their members can understand.

Importance of Gov. in providing clear rules of the game, incentives and market signals (‘enabling environment’) for the private sector, to help build consensus around expectations and investment risks, so that these can be understood and managed.