Water issues are taking centre stage at the High-Level Political Forum on Sustainable Development (HLPF) this week in New York, as the international community takes stock of the progress made toward five of the 17 Sustainable Development Goals (SDGs)—including SDG 6 on clean water and sanitation. Coming on the heels of a landmark UN 2023 Water Conference held in March, what should governments, practitioners, scientists, and civil society keep in mind as we use the HLPF to review where we are on SDG 6 and where we are heading?

In this article, I look back on what the UN 2023 Water Conference showed us about the state of our water challenges and needs, as well as our perspective on water. As we approach the halfway mark of the 2030 Agenda for Sustainable Development, I propose that now is the moment for radical change.

The UN 2023 Water Conference: Taking stock of a half-century in water

The UN 2023 Water Conference, held March 22 to 24, 2023, was the first conference at the United Nations centred on water issues since 1977. The conference produced the Water Action Agenda—a compilation of more than 700 voluntary commitments by UN member states and stakeholders to accelerate progress toward SDG 6. 

The world has changed dramatically over the past 46 years: the global population has doubled, cities have grown, new technologies have emerged, and new contaminants are being found in our water.

These are physical changes. But have our mindsets changed as well? Water is vital to our lives. We cannot survive without water longer than a few days. Yet instead of valuing it accordingly, we continue to exploit it well beyond sustainable levels. It is used in the production of everything we use and consume, from food to clothing to technology. The more we want to produce and disseminate, the more water we extract. The public discourse around water is extremely important because it shapes our attitudes and forms our understanding of water challenges and solutions. 

At the 1977 conference in Mar del Plata, Argentina, governments discussed water as a resource vital to social and economic development and placed a strong emphasis on "the conservation and rational use of water resources." At the 2023 conference in New York City, the "sound management of water resources" was again an important subject for governments. However, the context of these conversations has changed as the impacts of climate change are increasingly being felt. Last year alone, human-caused climate change was linked to major droughts in Europe, the United States, and China, sparking concerns over impending water scarcity; meanwhile, Pakistan experienced devastating floods. 

After 46 years, it is clear that we can no longer continue with a status quo approach to economic development. The tougher our environmental challenges become, the more radical our actions need to be to address them. This includes, first and foremost, a radical change in mindset around water and economic development.

Making sure all voices are heard in valuing water

One of the main messages expressed during the March conference was that "the world must radically change the way it understands, values, and manages water." A crucial part of that change is ensuring all voices are heard in the decision-making processes. The UN 2023 Water Conference took the positive step of featuring voices of youth and Indigenous Peoples—an approach that could help trigger a radical perspective shift in valuing water—and one that subsequent conversations must build on.

For example, the official event "Indigenous-led Conservation for the Health of Water Ecosystems in Canada and the World"—co-organized by IISD—shone a light on Indigenous leadership in conservation and the importance of Indigenous knowledge and values in water stewardship. 

The event highlighted the examples of the Seal River Watershed and the Magpie River while touching on the role of partnerships and embracing diverse worldviews to protect nature and adapt to our changing water cycle. The Seal River Watershed is a pristine watershed spanning over 50,000 square kilometres in northern Manitoba, Canada, that the Indigenous traditional land stewards want to conserve permanently. The Magpie River in Québec was the first river to be granted legal personhood status in Canada. 

Lawyers from the International Observatory on Nature's Rights, which was one of the event partners, are working to attribute legal personalities to natural areas and shift our mindsets. Under this approach, nature can no longer to be treated as an "object" or a "resource" to be exploited but must instead be treated as a "subject of rights" that requires respect and protection for future generations.

Another event organized by the UN Educational, Scientific and Cultural Organization (UNESCO) and partners focused on Indigenous knowledge and water governance. Indigenous stewards from Australia, Canada, Chad, and Latin America spoke about Indigenous knowledge as a driver for water solutions. In a packed room of passionate Indigenous speakers, we heard from Hindou Oumarou Ibrahim, an Indigenous activist from Chad.

"We have four decades: decade of water, decade of ecosystem restoration, decade of language, decade of ocean," Ibrahim said. "Let us have all of [these decades] together in collaboration and let us have a mechanism where Indigenous people can participate across all [of] these decades." This intervention and others reinforced how an Indigenous holistic perspective and focus on nature can guide us to change our understanding, valuation, and management of water, as well as all interconnected systems.

The finance challenge and definition of the "water sector"

To understand water challenges and solutions from a different perspective, I made my way to Times Square for the event "The New Age of Water Investing in a Time of Water Scarcity" at the NASDAQ office.

The event brought to the fore another crucial aspect of the water conversation, one that hinged on experiences of water scarcity and the challenges in finding, financing, and executing solutions. 

Jay Heller, the Head of Capital Markets at NASDAQ, pointed to the significant underfinancing seen in the water sector. For instance, when considering the exchange traded funds (ETFs) industry as an indicator of the capital raised for businesses, there are approximately 9,000 ETFs listed and formatted worldwide with USD 20 trillion in assets under management. Out of those, there are only seven ETFs earmarked for water, with only USD 4 billion in assets under management. 

Beyond the limited number of ETFs for water, we need to consider our definition of the water sector. Does this encompass only dams, pumps, and pipelines, or does it require a broader definition, one that goes beyond our understanding from nearly 5 decades ago?

The conversation included a call to broaden our perspective. Zac Goldsmith, the United Kingdom's then Minister for Overseas Territories, Commonwealth, Energy, Climate and Environment at the Foreign, Commonwealth & Development Office, emphasized the crucial role of nature, especially in light of how environmental governance treats different issue areas. 

"In the ideal world, you would not have created a climate COP, a biodiversity COP, a desertification COP, and all these different things—and treat water as if it is something entirely separate because all these things are absolutely inextricably linked," he said, referring to the different Conferences of the Parties held under various multilateral environmental agreements. "My proposal is we focus as much as possible on nature… When you back nature, you get a whole range of benefits beyond what you initially were trying to achieve," Goldsmith emphasized. 

For water, nature-based solutions can help stabilize shores, recharge aquifers, and slow water runoff. These solutions can also support biodiversity, clean the air, and mitigate climate change, to give a few examples.

Looking ahead: New perspectives on water and foregrounding the role of nature

Throughout the conversations I heard in New York, the recurring theme was that nature needs to be at the centre of solutions. This message resonated across stakeholder groups—from those stewarding traditional lands to those fighting for legal rights of nature to those working on mainstreaming nature in British policy. 

Heading into the in-depth review of SDG 6 this July at the HLPF in New York, these reflections indicate there is a need to radically redefine our understanding of the value of water and water investments and to reconcile the way we live with nature. 

Now it is the time for the global community to tune into this new mindset, elevate the work of Indigenous land stewards, educate the broader public on these issues, and, particularly, advance nature's rights. This will be a stepping stone to transformative water action.

Preparations for the 2023 High-Level Political Forum on Sustainable Development (HLPF) next month are in full swing. This annual event marks a key moment in the sustainable development calendar—a moment for countries to pause, take stock of their progress, and discuss how to make the 2030 Agenda for Sustainable Development a reality.

The July 2023 session of the HLPF will serve as an opportunity to prepare for a comprehensive review of progress on all 17 Sustainable Development Goals (SDGs) at the SDG Summit in September. This HLPF will focus on five SDGs, including SDG 6 on clean water and sanitation and SDG 17 on partnerships for the goals. 

At the International Institute for Sustainable Development (IISD), we have developed a set of recommendations on how countries could leverage the power of partnerships and work with voluntary sustainability standards (VSSs) to report on SDG progress.

VSSs set requirements for producing, selling, and purchasing products responsibly. Recent research has shown that VSS and SDG targets often overlap, particularly for SDGs 2, 6, and 17—all of which will be in the HLPF’s spotlight this year or next. Here are some examples of how standards can help deliver results on these three SDGs and help governments track their progress ahead of the HLPF.

Supporting SDG 2: Zero hunger

The Fairtrade International standard has been working in Uganda to improve agricultural productivity and smallholder incomes (SDG target 2.3) by delivering business and leadership skills training and support to the Gumutindo Coffee Cooperative. 

The training of more than 1,200 women has informed farmers about the importance of diversifying sources of income beyond coffee—the main source of earning in the community—into other crops or enterprises. Women farmers now earn extra income by selling vegetables, kerosene, and other products. 

Another positive outcome of the training has been informing women about the land tenure system, including how they could obtain the legal title for their land. As a result, more women are becoming aware that they can own land alongside their husbands, more joint legal titles are being issued, and more women are receiving land holdings in their own names. 

This example illustrates how VSS-supported educational efforts can promote access to land titles and deliver income improvements under SDG 2 while also supporting gender equality (SDG 5). 

Supporting SDG 6: Clean water and sanitation

The Alliance for Water Stewardship (AWS) Standard is collaborating with producers in Tanzania to increase water-use efficiency and address water scarcity (SDG target 6.4).

A coffee plantation owned by Olam International Ltd. in southern Tanzania’s upper Ruvuma basin became certified in 2015 under the AWS Standard, in collaboration with Water Witness International, which was responsible for tracking and monitoring the costs and benefits of implementing the standard. 

By complying with the AWS Standard, the coffee plantation—which irrigates more than 2,000 hectares and employs some 2,350 people, including more than 1,000 outgrowers—improved its water-use efficiency. It started a water-use monitoring system onsite, set efficiency targets, and ensured its water use corresponded with its permit of allowable water volume so as not to jeopardize environmental flows. 

In addition, a review of Olam’s water permit led to negotiations for the plantation to use less water than allowed under its 2015 permit. This reduction in water use could help prevent conflicts with other users and build local water security for nearly 300,000 people. 

This case illustrates how the AWS Standard, in partnership with Olam and Water Witness International, contributes to advancing SDG target 6.4 by enabling water monitoring, use, and consumption; planning water extraction and irrigation; and preventing water scarcity in neighbouring communities.

Supporting SDG 17: Partnerships for the goals

VSSs can also deliver sustainability benefits beyond certification. They play an important role in facilitating dialogue and fostering public-private partnerships between governments, VSS bodies, and multiple stakeholders—including farmers, buyers, producers, investors, and local authorities. This communication can help build trust, support policy coherence, and lead to improved coordination, strategies, and partnerships to tackle key sustainability issues. 

Countries could leverage those partnerships to report on SDG progress when preparing their Voluntary National Reviews (VNRs) for the HLPF. By capturing the results of the work VSSs are doing in their jurisdictions, as the case studies from Uganda and Tanzania demonstrate, governments could strengthen their VNR reporting by filling data gaps and providing evidence of SDG implementation on the ground. 

Detailed recommendations can be found in IISD’s new report, titled Standards and the Sustainable Development Goals: Leveraging sustainability standards for reporting on SDG progress. Launched ahead of HLPF 2023, the publication formulates guidelines to help interested governments lean into multi-stakeholder partnerships to bolster their VNR preparation and reporting efforts.
 

This article was originally published by the National Adaptation Plan (NAP) Global Network and is reprinted with permission.

With the 58th meeting of the United Nations Framework Convention on Climate Change’s (UNFCCC) Subsidiary Bodies (SBs) due to kick off in Bonn, Germany, on June 5, one of the key issues to watch in the realm of climate change adaptation are the talks on the Global Goal on Adaptation (GGA), given the need to move towards designing a Monitoring, Evaluation, and Learning (MEL) system for adaptation by COP 28.  

In 2015, the Paris Agreement (in Article 7.1) established the Global Goal on Adaptation (GGA) with the aim to “enhance adaptive capacity, strengthen resilience and reduce vulnerability to climate change.” Demonstrating the relevance and urgency of the GGA, its framework has been at the center of many subsequent negotiations to establish its scope and main elements.

During COP 26 in Glasgow, United Kingdom, the Glasgow-Sharm el-Sheikh work program on the GGA was established, including eight workshops for UNFCCC countries and observers to operationalize the GGA and create a framework that would allow better implementation of the above-mentioned Article 7.1. A year later at COP 27, parties further agreed to work on the framework with the aim of adopting it by COP28. The Bonn talks this June will include the sixth workshop of the Glasgow-Sharm el-Sheikh work program on the GGA.

Among its functions, the GGA framework needs to establish key elements, or dimensions, that can help capture and categorize evidence on progress towards the GGA. This information, in turn, will provide the basis for the design of a global monitoring, evaluation, and learning (MEL) system for adaptation under the GGA framework.

Based on a recently published IISD report, this article explains why and how the GGA framework should clarify the elements of a global MEL system for adaptation by COP 28.

What links the GGA with a global MEL system for adaptation?

As a counterpart to the Paris Agreement goal of limiting global temperatures to “well below 2°C and to 1.5°C,” the GGA represents the conceptual and methodological foundation through which parties and the UNFCCC will conduct the MEL of adaptation under the Paris Agreement. As such, a key component of the GGA framework is the definition of the MEL system that will provide evidence for the world to enhance adaptive capacity, strengthen resilience, and reduce vulnerabilities associated with climate change.

A MEL system refers to the tools, responsibilities, and processes used to monitor, evaluate, and learn from a specific climate change adaptation intervention. It is both a distinct phase in the adaptation policy cycle and an ongoing process throughout the entire policy.

There is already information available to guide the assessment of progress on the GGA. In fact, both the Paris Agreement and elements considered in Decision 3/CMA.4 from COP 27 highlight key components of the GGA that can shape a global MEL system for adaptation, including:

• A vision for the GGA based on its definition in the Paris Agreement’s Article 7.1;
• Dimensions of change through which evidence on progress can be captured; categorized, and assessed, which are based on the four dimensions of the iterative adaptation cycle: impact and vulnerability and risk assessments, planning; implementation, and MEL, along with key themes, and cross-cutting considerations; and
• Sources of information that channel data from local, national, regional, and global sources.

How can the GGA framework finalize a global MEL system for adaptation at COP 28?

Developing the GGA framework is an opportunity for decision makers to learn from the lessons of existing MEL systems under global agreements and frameworks, such as the Sustainable Development Goals (SDGs) or the Sendai Framework for Disaster Risk Reduction. Those frameworks have followed a top-down approach and include long lists of templated indicators that countries contextualize to match their national and sub-national realities. For example, the SDGs’ global indicator framework includes 248 indicators that can be picked and contextualized by countries.

While in theory such top-down approaches can help generate political buy-in, facilitate global analysis, and support policy development, globally defined indicators often do not reflect local context or priorities and ignore existing systems, which are crucial for adaptation.  Building on existing MEL system is important to avoid reporting burden, considering almost half (48%) of NAP documents submitted to the UNFCCC already include MEL systems as part of their NAP processes, with 55% of these referencing specific indicators. Ahead of COP 28, the new proposed GGA framework should consider drawing lessons from previous exercises by designing a MEL system for the GGA that combines a minimal top-down approach with a bottom-up, country-driven approach that incentivizes national MEL systems.

The GGA framework needs to focus on its overarching goal of enhancing adaptation action rather than becoming a long-lasting methodological exercise. During discussions this year, countries must advance elements of both a global MEL system and the GGA framework that will make them implementable after COP 28. The MEL system under the GGA framework would therefore benefit from using a mix of top-down and bottom-up approaches. For this purpose, the GGA framework should prioritize:

1. Defining indicators based on existing systems

The choice of which indicators can inform progress on the GGA can be based on already existing sub-national, national, and other MEL systems in order not to overburden countries. The MEL of NAP processes, for example, can provide one way forward. This mixed approach can be used to identify a limited number of global targets that can drive political support for adaptation, yet that recognizes current sub-national and national MEL systems and does not add reporting burden on countries.

2. Designing an iterative and boldly pragmatic MEL system

The GGA framework should set realistic expectations of what countries can achieve rather than adopting overambitious targets that would exceed their capacities. The GGA framework and its MEL system must be an iterative process that continuously evolves, ratcheting up ambition while reflecting new realities brought on by the increasing climate crisis.

3. Strengthening country-driven and participatory processes

A non-prescriptive framework for the first GGA can guide countries to reinforce their national MEL systems to gather and communicate data, helping them articulate their adaptation story. This would strengthen country-driven and participatory processes, ensure a fair representation of varied voices and views that integrate the most marginalized groups, and account for local realities.

4. Establishing pathways for informing policy and practice

The GGA framework must focus on establishing processes, not just methods, to enable learning throughout the adaptation cycle to inform policy and practice. Learning pathways and exercises should be set at different stages of implementing the GGA, building from good practices in other countries and sharing evidence between different UNFCCC and external processes, including the Global Stocktake and the Intergovernmental Panel on Climate Change reports.

5. Defining roles for implementing the GGA framework and global MEL system for adaptation

This means determining modalities, timelines, and roles for the global community to support countries as they inform the GGA, as well as analyzing the evidence, and providing recommendations to share insights with regional, national, and sub-national stakeholders.

*   *   *
The GGA presents an opportunity to incentivize and strengthen MEL systems in countries. However, having a well-designed MEL system is not a substitute for the political will and financial support necessary for implementing sustainable national MEL systems, building lasting capacities, and financing adaptation actions themselves.

Today, ministers and policymakers from across the globe are congregating in Paris and, under the auspices of the United Nations, rolling up their sleeves to negotiate “an international legally binding instrument on plastic pollution, including in the marine environment.”

Canada has the chance to play a leadership role on the world stage. The question is, will we seize the opportunity, or sit back as other countries shape global policies that will affect us for decades to come?

Global outrage at photos depicting a floating garbage patch of plastic in the ocean proved to be a significant impetus for these negotiations, but the issue is much broader than just needing to change the way we clean up after ourselves.

The solution needs to tackle everything from how we produce, use and dispose of plastics. The growing challenges related to human health, as well as its links to gender and the lives and livelihoods of Indigenous Peoples, should also be taken into account.  

Canada has already established itself as a vocal supporter of addressing plastic pollution for years. During its G7 presidency, the country developed and signed onto the 2018 Ocean Plastics Charter as well as a “High Ambition Coalition” for the current negotiations.

The real proof of its commitment, however, will come during the coming weeks as it engages in the second round of negotiations on this treaty.

Canada has already laid out some commendable priorities for these talks. It has said the future treaty should seek to clean up, mitigate—and ultimately end—plastic pollution to protect human health and the environment, as well as a focus on the elimination of unnecessary and problematic plastics and chemical additives, resource efficiency and a stronger ‘circular economy’ approach.

Canada also backs the creation of a financial mechanism to support the implementation and the inclusion of capacity building, and addressing just transition, gender, and human rights considerations.

But, if Canada is really serious about tackling plastics pollution, it needs to get bolder.

First, the government should explicitly advocate for provisions to reduce the production of primary plastic polymers and eliminate and restrict specific plastic polymers, chemicals and plastic products of concern. This would ensure that Canada is fully addressing the entire lifecycle of plastic – including the precursors of plastic pollution – from production and manufacture to disposal and circularity.

"A global solution is necessary, and Canada should seize this chance to be a global leader to ensure the treaty is fit for purpose—and ready for impact."

Second, Canada should strengthen its position on pollution and human health. Now that we know more about the sources of plastic pollution throughout the supply chain, Canada could expand global policy to address health impacts throughout the life cycle of plastics including from the toxic constituents of plastic as a material.

Third, links between plastic and plastic pollution with other areas should be addressed. Climate change and plastics, for example, are both driven by the extraction of oil and gas. And let’s also not forget that plastic pollution often has detrimental effects on freshwater systems—to which Canada is home to 20% of the world’s supply—as well as biodiversity, in particular seabirds and ocean creatures. An advisory panel, drawing on diverse scientific voices and perspectives—like that which informs the IPCC—would be a critical tool here to determine potential threats and to formulate clear and proven solutions.

Fourth, Canada could spearhead the talks on means of implementation - including adequate technical assistance, capacity building and the mobilisation of predictable, meaningful and sustainable funding for the implementation of the future treaty.

Finally, it will be important for the government to emphasize global measures and standards, over national measures. This will ensure a level playing field and that global standards set the path towards ending plastic pollution with clear timelines and targets.

Those startling images of plastics floating in the ocean have shown us that plastics pay no regard to national borders. A global solution is necessary, and Canada should seize this chance to be a global leader to ensure the treaty is fit for purpose—and ready for impact.

The conversation on ending fossil fuel subsidies in Canada has been hanging like a dark cloud over the country, with years of pledges failing to lead to concrete action. But the skies may finally clear in the coming months with the release of Canada's long-awaited subsidies framework and policy.

The government first promised to scrap fossil fuel subsidies nearly 15 years ago, and the federal Minister of Environment and Climate Change has been instructed to act on this commitment in the 2015, 2019, and 2021 mandate letters. Meanwhile, ambition to curb greenhouse gas emissions—and thus the country's reliance on fossil fuels—has been escalating in Canada as its global peers make moves to rapidly scale up renewable energy.

However, the reality is that Canada still gives billions in tax breaks, grants, financing, and other supports to the oil and gas industry every year—totalling over CAD 20 billion in 2022—and a significant portion of these are subsidies.

More recently, the government set a deadline for this year, 2023, to finally end fossil fuel subsidies for good, with Steven Guilbeault, the current Minister of Environment and Climate Change, confirming that “not delivering is simply not an option.” Guilbeault then reinforced this pledge in December, saying that his government would move on this in the first half of the year.

But nearly 6 months into 2023, we are still waiting for action. The government must move quickly and decisively to make good on this long-standing promise to keep pace with Canada’s international peers and give Canadians something to be proud of.

What exactly will that look like? There are two elements the government must get right to keep its promise: clearly defining fossil fuel subsidies and developing policy for phasing them out.

What Are (Inefficient) Fossil Fuel Subsidies?

Canada's original commitment, alongside its G20 partners in 2009, was to end “inefficient fossil fuel subsidies.” The Canadian government is looking at this definition in two pieces: (1) what is a fossil fuel subsidy and (2) what is considered “inefficient.”

The World Trade Organization's (WTO's) definition of subsidies, which is part of international trade law, is widely used around the world, including in the recommendations to measure fossil fuel subsidies by the United Nations Environment Programme. This encompasses financial contributions that yield benefits to businesses or industries (in this case, fossil fuel companies)—including, but not limited to, direct transfers, foregone revenue, transfer of risk, and provision of goods and services. If established definitions are sidestepped without strong attempts to maximize ambition and capture all relevant measures, key subsidies might be missed—which would defeat the very purpose of the government's commitment and risk our credibility internationally.

On the matter of inefficiency, the government should adopt strong criteria that do not leave any loopholes for fossil fuel support to slip through. IISD has proposed four criteria that all energy subsidies should align with to be considered efficient: supporting a sustainable economy, creating good long-term jobs, aligning with Canada's climate commitments, and getting the best value for public dollars spent. Subsidies that do not align with these criteria should be labelled “inefficient” and phased out under the forthcoming policy.

If the government adopts robust criteria like these, it would be very unlikely that any fossil fuel subsidy would be considered efficient. In fact, the government of Italy and the United Kingdom's Climate Change Committee have already noted that all fossil fuel subsidies are inefficient, while the United States, China, and Indonesia have indicated intentions to end fossil fuel production subsidies because they can lead to wasteful consumption.

What Should Canada's Policy to Stop Fossil Fuel Subsidies Look Like?

To its credit, last year Canada set a strong precedent by issuing policy guidelines to stop providing public financing for fossil fuel projects internationally, thus helping Canada follow through with its COP 26 promise to end such public support by the end of 2022. 

This policy can serve as a good model for Canada's work on fossil fuel subsidies at home. To be eligible for public financing, the policy guidelines require international projects to be aligned with 1.5°C scenarios, include a robust assessment of the risk of stranded assets, and prove a lack of renewable energy alternatives. This leaves very little room to continue financial support for fossil fuel projects. However, the policy guidelines still allow support for natural gas-fired power plants and “abated” fossil fuel production that relies on carbon capture and storage, a technology that has not proven effective at reducing emissions in the oil and gas sector and remains prohibitively expensive. 

Canada's approach to ending domestic fossil fuel subsidies should mirror the strengths of its international public finance policy, while making sure to close the loopholes. It should also require greater transparency and reporting so that implementation can be tracked and accounted for. 

Which Fossil Fuel Subsidies Does Canada Need to End?

The criteria and policies government develops should both end existing support for fossil fuel production and make sure that no new subsidies are created. This includes ending long-standing tax breaks for oil and gas companies, like the Canadian Development Expense, as well as non-tax subsidies. Lists of these measures have been gathered through subsidy inventories, though some are not even known to the public due to a lack of reporting.

A strong policy would also ensure that public funds like the Net Zero Accelerator Initiative and the Canada Growth Fund, as well as the recently announced investment tax credits for electricity and carbon capture, exclude fossil fuel support and prioritize investments in renewables, energy efficiency, and decarbonizing hard-to-abate industries. If the money in these funds flows to oil and gas companies, Canada risks breaking its long-standing international subsidies commitment and missing out on opportunities from fully embracing the shift to a cleaner economy.

Next Up: Tackling domestic public finance for fossil fuels

In addition to tax breaks and grants, the government also supports fossil fuels by financing projects on Canadian soil, such as pipelines and liquefied natural gas export facilities, taking on the risk of these projects and often offering better terms of financing than those available commercially. The federal government has promised to end this support, just as it did with projects abroad, but has not yet offered any specifics. It is critical that the government follows through on its pledge, given that even more public finance is directed to fossil fuels domestically than internationally—at least CAD 4.3 billion annually between 2019–2021.

The best course of action would be for the government to tackle domestic public financing for fossil fuels hand-in-hand with subsidies, eliminating both this year. This is especially important since domestic finance and subsidies have elements in common. In a year of high inflation and restricted government spending, this would free up funds in future budgets for investments in strategic, low-carbon sectors to power the transition, diversify the economy, and provide good green jobs for Canadians.

If Canada were to bring a strong policy for ending domestic fossil fuel subsidies and public financing to the G20 Summit this year, it would send an important signal to its peers and international forums like the WTO, that Canada is serious about aligning public spending with its climate commitments. After having demonstrated leadership by recently ratifying the WTO's Fisheries Subsidies Agreement, Canada has another opportunity to prove its sustainability credentials by aligning its financial support with sustainability goals and eliminating its support to fossil fuels.

This article was originally published via the National Adaptation Plan (NAP) Global Network and is reprinted in its entirety below.

A year ago at the 2022 Bonn Climate Change Conference (SB56), countries kickstarted the technical dialogue (TD) process, a critical part of the global stocktake (GST) under the Paris Agreement. During the GST process, country representatives and non-party stakeholders, including scientific experts, practitioners, and observers, have been sharing their insights, experiences, and expertise on mitigation, adaptation, and loss and damage, and means of implementation, as well as their assessments on whether we are on track to meet the long-term goals of the Paris Agreement.  

Building on the first TD (TD1.1) held at SB56 and the second TD (TD1.2) held at COP 27, the upcoming 2023 Bonn Climate Change Conference (SB58) will see the third and last installment of the Technical Dialogue (TD1.3) take place before the political consideration of outputs phase commences. This phase will start at the United Nations Framework Convention on Climate Change (UNFCCC) Twenty-Eighth Conference of the Parties (COP 28) in Dubai, United Arab Emirates. (SBs, in climate parlance, refer to the meetings of the UNFCCC’s subsidiary bodies.) 

In this article, we revisit the first two Technical Dialogues to take stock of what key messages on climate change adaptation have been captured thus far, what TD1.3 participants could emphasize on adaptation, and the next steps for the GST process. 

Climate Change Adaptation and the GST

Taking place every five years, the GST acts as an assessment and learning mechanism for the Paris Agreement, serving as a main part of the Agreement’s ratcheting mechanism to increase ambition for climate action. Article 7 of the Paris Agreement specifically tasked the GST with recognizing developing countries’ adaptation efforts and reviewing the overall progress made in adaptation and resilience-building actions (see the right-hand side of the below figure for the mandates from the Paris Agreement on adaptation for the GST).  

To this end, the GST seeks to collect information and reflections on the following elements, in line with the Paris Agreement’s mandates (see the left-hand side of the below figure): 

1. The state of global adaptation progress. 
2. Challenges and gaps identified by countries and relevant stakeholders. 
3. Opportunities and solutions to bridge gaps and address challenges. 
4. Good practices and tools to enhance global adaptation actions. 
5. Enabling factors supporting effective and transformative adaptation. 

TD Key Messages: Increasing adaptation ambition, but with uneven progress

The TD on adaptation provides a forum for exchange and discussion on adaptation planning and implementation. This information will then be captured as part of the GST’s outputs. Based on the TD co-facilitators’ summary reports from the past year, we highlight three key messages shared to date.

1) While adaptation progress has been significant, it is still inadequate, and many challenges and gaps exist. 

From the latest Intergovernmental Panel on Climate Change (IPCC) reports and reflections shared by participants, it is clear that the impacts of climate change can be felt across the globe. Countries are stepping up their adaptation ambition, amongst others, through the formulation and implementation of their National Adaptation Plans (NAPs) and related strategies. At the time of the second TD, 139 of the 154 developing countries had NAP processes underway, while 45 countries had already developed and communicated their NAP documents to the UNFCCC. In addition, 57 countries have submitted adaptation communications (AdComs) that outline their experiences and efforts to build resilience. However, despite significant collective progress on adaptation, the transition from planning to implementation remains slow, uneven, and incremental.

"Collectively, there is increasing ambition in plans and commitments for adaptation, but there also remains an implementation gap, in that plans are implemented inadequately, unevenly, and incrementally."

- Summary Report of the second Technical Dialogue

Country representatives highlighted key challenges they face, such as a lack of capacity to analyze and use climate information, trouble accessing downscaled data, and insufficient support for establishing functioning and sustainable monitoring, evaluation, and learning (MEL) systems for adaptation. 

Experts and country representatives agreed that the provision of support and adaptation finance flows are not aligned with the level of climate impacts experienced by the most vulnerable countries.  

At the upcoming TD1.3, participants should continue to highlight the essential role of the NAP process and the importance of continued support toward helping countries formulate and implement their adaptation actions. Emphasizing these points is invaluable for these critical reflections are captured in the final output. 

2) More information on opportunities, solutions, good practices, and tools are needed to help countries enhance adaptation actions. 

Participants agreed that adaptation planning and implementation is a continuous and iterative process building on previous actions and drawing from a robust MEL system. Adaptation should be driven by local priorities and circumstances, while ensuring financial flows are realigned so these do not contribute to maladaptation, but instead go toward robust, inclusive, equitable, and participatory adaptation. 

Vertical integration, ecosystem-based adaptation, inclusive and gender-responsive adaptation planning processes, effective private sector engagement, and the application of the rights and knowledge of local communities and Indigenous peoples have also been identified as essential practices for fair and effective adaptation.

At TD1.3, participants should focus on compiling actionable solutions. This forward-looking perspective can most usefully highlight next steps to bridge the gaps identified in the previous TDs and facilitate the transition from planning to implementation. It will be equally important for the participants to stress the crucial role a functioning MEL system for adaptation plays in countries’ adaptation policy cycles, as well as connecting the GST process to the ongoing discussions under the Glasgow-Sharm el-Sheikh (GlaSS) work programme on the Global Goal on Adaptation (GGA). 

3) Countries are using a set of enabling factors to coordinate adaptation across sectors and scales of governance and to enable iterative planning and implementation, continuous learning, and transformational adaptation.

Participants have identified the following key enabling factors that underpin countries’ national adaptation planning processes: 

• High-level political buy-in and support towards adaptation: Only when high-level political buy-in is available can adaptation be mainstreamed and prioritized. 
• Adequate financing and capacity: Sustainable adaptation financing, as well as investments in capacity-building, enable effective adaptation planning and implementation. 
• Synergistic institutional arrangements for mainstreaming and policy coherence: Overcoming the often fragmented, segmented, and siloed approaches to adaptation is key to mainstreaming adaptation and building resilience across sectors. 
• Multilevel governance: Vertical integration and alignment between national, subnational, and local adaptation planning and implementation is essential for addressing the differential impacts of climate change and the various contexts and factors contributing to vulnerabilities. 
• Participatory approaches and inclusion: A strong focus on cross-cutting and intersectional issues like gender, social inclusion, Indigenous peoples’ rights, and the integration of local and traditional knowledge and knowledge systems enables the co-creation of adaptation actions. The role of non-state actors in national adaptation planning and implementation also cannot be overlooked. 

 At TD1.3, participants will have the opportunity to formally organize these enabling factors and share tools and best practices associated with each.   

The Road to COP 28

TD1.3 at the upcoming SB58 will be the last opportunity for countries and other stakeholders to provide technical inputs before the political part of the GST starts. To ensure their messages are included in the Consideration of Outputs (CO) phase at COP 28, participants need to first make sure their inputs are captured in the Factual Synthesis Report (SYR), which is the compilation of all emerging messages and discussion outcomes across the three TDs.

At SB58, country negotiators will start discussing how the CO phase will be carried out and how the GST process will communicate its outputs. The COP 28 presidency, along with the Chairs of the UNFCCC Subsidiary Bodies, will host a high-level event in Dubai to send a political signal that acknowledges the outputs of the GST and commits to increasing climate ambition. A decision or a declaration under the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA) at COP 28 will also be negotiated by countries to highlight key messages and assessment results from the TDs and provide follow-up instructions as appropriate. 

However, much of the CO phase is still up in the air and pending countries’ negotiation. TD1.3 and SB58 will be the last window for countries and relevant stakeholders to highlight what they feel is the most important evidence to help shape the next generation of policies on adaptation and ensure the Paris Agreement’s first GST delivers on its mandate. 

Coimbatore, like many other rapidly expanding cities in India, faces numerous transport challenges. With a growing population of 1.6 million residents, the city’s infrastructure has struggled to keep up and is almost completely reliant on motorized transport. This had led to high traffic volumes, congestion, long commuting times, road safety issues, and air pollution.

To address this, the Coimbatore City Municipal Corporation has developed an ambitious Non-Motorized Transport (NMT) plan: a 300 km network of bicycle and pedestrian lanes, constructed over a 15-year period. The citywide network is expected to sustain existing and future NMT demand while meeting sustainable, low-carbon mobility targets, encouraging the shift from private motorized transport to active modes such as walking and cycling.

As part of a new series of sustainable transport case studies, the International Institute for Sustainable Development (IISD) has prepared a comprehensive economic analysis of the NMT plan in Coimbatore over the next 23 years. We found that the project was not economically viable if valued using only conventional metrics, such as cash flows and revenue streams. Yet, when a wider range of economic, social, and environmental benefits and costs are factored in, the NMT project becomes clearly investment worthy, both from an economic and a societal perspective.

When a wider range of economic, social, and environmental benefits and costs are factored in, the NMT project becomes clearly investment worthy, both from an economic and a societal perspective

To undertake these broader integrated assessments, IISD has developed a Sustainable Asset Valuation (SAVi) methodology based on system dynamics modelling. This methodology allows us to evaluate projects more holistically, forecasting how different transportation infrastructure options can affect or be affected by economic, social, and environmental factors and assigning monetary and financial values to these impacts. Through these analyses, we aim to raise awareness about the impacts of a project over its life cycle, with the hope of transforming decision-making to support long-term, sustainable solutions. This is not an off-the-shelf assessment tool. Rather, the SAVi methodology invests in a transparent, co-developed and customized approach that actively engages key stakeholders, including policy makers, investors and planners, providing a fuller picture of transport projects and their knock-on effects for the community and landscape.

In our assessment of the Coimbatore NMT plan, we found that it would result in the community experiencing significant health benefits from increased physical activity and lower levels of air pollution. Moreover, it would lead to higher retail and property prices, and significantly reduced costs from road accidents. Other benefits from the NMT plan include decreased CO2 emissions, diminishing road maintenance costs, and reduced noise pollution. Notably, the largest benefits from the NMT were found to be socio-economic rather than environmental. In terms of size, the greatest positive impact from the shift to non-motorized transport is the avoided costs of traffic accidents, amounting to USD 395 million cumulatively over the twenty-three-year period. This is followed by the health benefits (USD 89.9 million) and the avoided costs of fuel use (USD 54.8 million).

It is not only NMT projects where we see this play out. Assessments of other sustainable transportation projects around the world yield similar results. For instance, IISD is currently undertaking SAVi assessments of a Bus Rapid Transit (BRT) project in Bandung, Indonesia, and a Mass Rapid Transit (MRT) project in Bogotá, Colombia. Both projects produce a wide range of economic, social, and environmental benefits typically overlooked in a traditional cost-benefit analysis. In these cases, like in the Coimbatore NMT plan, the inclusion of the full range of benefits and costs yields a much higher return on investment, roughly 20 times higher for the BRT and four times higher for the MRT, and provides therefore a stronger rationale for greenlighting the projects.

These examples underscore the importance of recognizing, valuing, and reflecting the economic, social and environmental benefits and costs in economic and financial decision-making. Moreover, by considering the full range of benefits and costs in sustainable transportation projects, infrastructure decision makers can transcend the important but inherently narrow questions around economic viability and instead rightfully place the focus on the overall value to society and sustainable development.

Infrastructure decision makers can transcend the important but inherently narrow questions around economic viability and instead rightfully place the focus on the overall value to society

The SAVi report on the NMT network in Coimbatore, India, is available to read here. This article was originally created for the SLOCAT's blog series Towards a Gold Standard for Transport Investment.

This article is republished with permission from The Hill Times' website. The original article was published on May 17, 2023.

Here in Alberta, the wildfires that have engulfed my province and displaced close to 30,000 people are devastating—forcing farmers from their ranches, families from their homes, and children from their schools.  

The early wildfire season unfortunately serves as a sobering reminder that the intensifying impacts of climate change are affecting local communities, livelihoods, and ecosystems. 

How might we fight the fires of climate change – both the real ones burning actively in Alberta and the broader risks facing communities across Canada?  

Well, we fight fires with water.  

Firefighters on the frontlines know this, but we need all Canadians to understand—with renewed urgency—just how critical water is to our wellbeing and prosperity in the face of climate change.  

This week, we learned the range of water challenges facing prairie communities. Among them, perennial underfunding of water infrastructure, including stormwater, wastewater, and potable water assets, has caused their depreciation to outpace investment by $3 billion in just four years. 

By water infrastructure, we mean what you might understand as traditional infrastructure—think pipes, dams, and water treatment facilities.  

Canadians need water infrastructure to provide clean drinking water, manage stormwater and wastewater, ensure reliable water supplies for key economic sectors, and to protect us in the face of mounting risks of flooding, drought, extreme heat, and wildfires.

But it is growing more challenging for traditional—or “grey”—infrastructure to keep pace with the needs of communities, especially as rising costs and climate change add pressure.  

Thankfully, evidence from around the world and here in Canada, shows that nature can help to bridge the gap, in the form of natural infrastructure.  

Natural infrastructure is a way to plan and work with nature to meet infrastructure needs. It can be a conserved ecosystem, a restored ecosystem, or even a nature-based engineered feature. Examples range from conserving and restoring wetlands to reduce flood risk and retain soil moisture to installing green roofs on top of public buildings for reduced stormwater volumes.  

And natural infrastructure works—proving to be reliable and cost-effective, easing the burden on traditional water infrastructure systems. It also provides extra benefits – for example, wetlands can protect against flooding, while also storing carbon, supporting biodiversity, and even property values.  

There are exciting examples peppered across the prairies. A tertiary treatment wetland in La Broquerie, Manitoba uses the power of plants to ensure phosphorus levels meet regulatory requirements before discharging to the Seine River. A bioretention bed in Okotoks, Alberta collects, stores, and cleans stormwater used in a local irrigation system. But these projects are far from the norm; we need a more coordinated approach to scale up natural infrastructure across the country and in the prairies.

And soon. 

And while Canada’s federal government is supportive of building more natural infrastructure solutions to complement traditional infrastructure—evident by funding through the Natural Infrastructure Fund and plans to include natural infrastructure in the first ever National Infrastructure Assessment—we need to ensure that key investments and programs reach prairie communities in Alberta, Saskatchewan, and Manitoba; and beyond.

We can build on recent momentum—including the draft National Adaptation Strategy—to ensure the right supports are in place to help prairie communities make their water infrastructure more resilient.  

But how?  

First, we need to ensure adequate and more accessible funding for those, across all sectors, who want to implement natural infrastructure. Accessibility is key – while “shovel ready” projects are great, more support for the upfront development of projects can increase local uptake, particularly in rural or underserved communities who may lack capacity or expertise.  

We also need to make a stronger business case for local projects, to show where natural infrastructure is a cost-effective and impactful option that provides a clear return on investment. 

And, to facilitate all of this, we need to enable policies at all levels of government to make it easier for those who want to implement natural infrastructure — smaller municipalities, rural counties, Indigenous communities, agricultural producers, industry, and investors. 

Natural infrastructure can be an extra firewall against the worst impacts of climate change. Let’s focus on water to lessen the burn.  

Investments in climate change mitigation continue to grow, driving the energy transition and rapid growth in net-zero technologies. At the same time, a lack of reliable data and a loose regulatory environment have led to declining investments in environmental, social, and governance (ESG) funds, while some nervous managers are shifting assets away from ESG funds to avoid future claims of greenwashing.

The stubborn problems with ESG governance have triggered calls to either scrap ESG or reporting or replace the current framework with a narrower focus on greenhouse gas emissions. While a single indicator like carbon emissions would make reporting and governance easier, these proposals are deeply flawed, as they would ignore the need to also tackle real-world issues such as nature stewardship, pollution abatement, and climate change adaptation. More promisingly, new ESG regulations and disclosing standards proposed in the United States, the European Union, and elsewhere offer hope for curbing greenwashing and countering the credibility deficit in ESG markets.

Moreover, proposed sustainability, climate risk, and opportunities disclosure standards from the International Financial Reporting Standards (IFRS) Foundation, developed by the International Sustainability Standards Board (ISSB), could be the most important development in company reporting in a generation. The new standards are expected to be released in June 2023.

“Aggregate confusion” in sustainability reporting

Despite global financial and energy security concerns, investments in climate change mitigation and the energy transition continue to grow. Preliminary estimates show global climate finance volumes of between USD 850 billion and USD 940 billion in 2021, a 40% increase from the previous year, with the lion's share of the total going to climate change mitigation. Similarly, global investments in energy transition technologies like renewable energy and energy efficiency reached USD 1.3 trillion in 2022. Now the global community needs to turbocharge this emerging trend and quadruple annual investments in the energy transition to over USD 5 trillion to limit global warming to 1.5°C, the International Renewable Energy Agency warns.

However, climate finance is also part of the wider ESG investment space, and within the ESG space, worryingly, there is no discernible positive trend to begin with. Instead, investments in ESG funds are showing the opposite. S&P Global estimates that investment assets held by firms that factor ESG into their decisions dropped from USD 17 trillion in 2020 to USD 8.4 trillion in the United States at the beginning of 2022.

For nearly two decades, companies have made sustainability claims that were sometimes untrue, often untested, and nearly always non-comparable. The Harvard Business Review has noted that the “data underlying ESG ratings are incomplete, mostly unaudited, and often dated.” A recent report from the Massachusetts Institute of Technology (MIT), fittingly called “Aggregate Confusion,” has identified wide divergences across sustainability reporting, making it nearly impossible for investors to compare company performance and, in turn, reward higher ESG performance. Several state legislatures in the United States have called for ESG criteria to be scrubbed from markets and have even banned companies that use them.

In a less draconian proposal, The Economist has suggested jettisoning ESG frameworks altogether, instead requiring companies to report a single climate indicator: greenhouse gas emissions. While a simplified climate metric would allow financial markets to track net zero pledges against actions, it is a bad idea. A single greenhouse gas indicator would provide a static snapshot of current emissions but little information about future steps or longer-term risk scenarios. More broadly, investments are critical not only to curb emissions but also for climate change adaptation, nature conservation, nature-based infrastructure, and pollution abatement. In addition, ESG assumes these efforts must simultaneously integrate social, labour, human rights, and other standards to be truly sustainable.

Regulators looking to squeeze out the “green lemons”

The current issues with corporate sustainability disclosure standards pose a familiar problem for markets: How do we overcome information failures and allow prices to reflect the proxy value of assets?

More than half a century ago, Nobel Prize-winning economist George Akerlof identified the problem of asymmetric information stifling efficient market outcomes. Akerlof used the example of used car markets to illustrate asymmetric information: these were markets where few potential buyers possessed sufficient information to spot a defective used car, which he famously called lemons. He argued that, ultimately, regulations are needed to address information failures.

With the combination of expanding green markets and insufficient ESG data quality, the risk of “green lemons” has been growing for years, from phantom carbon offset credits to companies mismatching green pledges with daily practices.

Regulators across the world are making moves to address this. In the United States, the Securities Exchange Commission has proposed new rules setting out clear sustainability risk disclosure and reporting standards while the U.S. Federal Trade Commission has proposed new guidelines to ensure that green claims—including claims related to carbon offsets—are truthful.

In the EU, the next stage of the Sustainable Framework for Disclosure Regulations (SFDRs) entered into force at the start of this year, requiring greater transparency on how investments are classified under three categories–including “Light Green” funds, intended to promote environmental or social characteristics, and “Dark Green” funds, intended to deliver positive environmental or social impacts.

The EU is also expected to introduce new regulations to counter greenwashing in bond markets, building on the EU Taxonomy for Sustainable Activities.

In response, fund managers in Europe have moved nearly 40% of asset funds classified as “Dark Green” under the SFDRs to the lower “Light Green” level–a move representing roughly USD 100 billion. Shuffling from nervous asset managers is part of the reason ESG funds have been decreasing, and Bloomberg expects the shuffling to continue throughout 2023 as investors opt to reclassify asset funds now to avoid being accused of greenwashing when the new regulation kicks in.

Game-changing ESG and climate risk disclosure standards expected mid-year

There are promising signs that the remarkable regulatory convergence on climate finance metrics and measurement standards, which provides clarity and consistency for companies, will be replicated in the larger ESG market.

By mid-2023, the IFRS Foundation is expected to finalize its new rules on how companies disclose ESG and climate risk. These new standards, developed by the ISSB, mark the most important development in reporting in a generation.

China is among the markets to watch as the ISSB standards roll out. With climate disclosure standards already in place, China may adopt its own version of ESG standards somewhat distinct from ISSB’s. The good news is a widespread recognition among Chinese decision-makers of the importance of standards that are comparable and interoperable with other jurisdictions. Senior Chinese experts have played key roles in both the G20 Sustainable Finance Working Group and the United Nations (UN) High-Level Expert Group on the Net Zero Emissions Commitments of Non-State Entities, both of which underscore the importance of standards convergence.

Of course, with new standards forthcoming, the real test is whether better information will strengthen the business case for sustainability investments. Tim Buckley, the CEO of Vanguard, the world’s largest asset management group, recently said that they “cannot state that ESG investing is better performance-wise than broad index-based investing” as the group exited the Net Zero Asset Owner Alliance.

However, the conclusion of a recent analysis by researchers at MIT and Peking University School of Mathematical Sciences offers a vital counterpoint for sustainability investment. Based on evidence from over 200 ESG funds, the report concluded that there is a “significant positive relationship” between ESG investments and performance and that ESG funds outperformed their grey counterparts.

The new standards from the ISSB and different regulatory initiatives will allow investors to spot and crowd out “green lemons” in the critical years ahead–enabling the scaling up of investments not only for cutting emissions but also for enabling nature-positive outcomes, improving climate change adaptation, and strengthening social conditions.