The difficulty of meeting Nationally Determined Contributions – and what it means

If you’ve been reading about global decarbonisation aspirations, it’s likely you’ll have seen references to Nationally Determined Contributions (or NDCs). As ANGEA Senior Advisor Neil Theobald writes in the June edition of The Energy Diary, while the lofty aspirations of NDCs are commendable, most will struggle to be achieved and a dependence on them may prevent the world taking other steps to respond to climate change.

Nationally Determined Contributions (NDCs) are a part of the Paris Agreement, adopted in 2015.  The objective of the Paris Agreement is to limit global warming to well below 2°C above preindustrial levels, with the NDCs being commitments that nations make to reduce emissions.   

The contributions are voluntary and formulated by each country to allow for local circumstances to be considered.   

 NDCs are revised every five years, with the next round due in early 2025.  This was preceded by the first Global Stock-Take (GST), which reported on progress against the NDC targets at COP 28 in Abu Dhabi in 2023.  The GST noted that “the world is not on track to meet long-term goals of the Paris agreement” and called for rapidly accelerating action to reduce emissions.  It also called for NDCs to be increased in ambition and implementation measures to be sped up.   

The areas for urgent action included tripling renewables capacity by 2030, doubling energy efficiency improvements from 2% to 4% each year in the same timeframe, reversing deforestation, improving agricultural practices and providing finance for all of the above.  

The reality, however, is that as each year passes the targets are becoming more unattainable.  A 2022 Nature article estimated that the probability of large emitters meeting their NDCs are only 2% for the US and 16% for China, and that the chance of staying below 2°C of warming is only 5%. 

One reaction is to call for even more aggressive reductions, but this ignores the practicalities of making the changes that would be required in the global energy and financial system.  Resources are finite and simply stating at ever-increasing volume that “it’s an emergency” is not going to change the fact that the targets in the Paris Agreement are unlikely to be met. 

What is likely to happen is that the developed world will continue to reduce emissions by replacing coal-fired power with natural gas.  Developed economies will add nuclear power and invest heavily in solar and wind, as well as technologies like electric vehicles that have limited actual impact on life-cycle emissions.  Ironically, much of this will be supported by low-cost coal-fired manufacturing in China. 

The developing world, where the bulk of future emissions will come from, has a more limited suite of options and is primarily and understandably focused on economic development.  Emerging economies will continue to burn cheap coal to drive growth, buy natural gas when it is affordable and invest in some renewables, but preferentially develop their national resources to grow living standards.   

Pretending that this is not going to happen is as counter-productive as lecturing the developing world that similar levels of economic growth are possible through a wholesale and rapid shift to renewables.  The fiction of maintaining economic growth while replacing the current energy system with a less effective one is just that, fiction. 

What are alternative approaches?  An area that needs more focus is adaptation to climate change – acknowledging that it will continue to happen and seeking to adapt and mitigate the impacts.  This broadens the available policy responses and allows for assessment of the cost and benefit trade-offs between adaptation measures and spending more on further reduction of emissions. 

The reality is we are going to have to adapt, so we may as well get on with it.  The best way to ensure the capacity to adapt exists is for economic growth to continue in developing economies, providing them with the financial resources to pursue solutions, with support from the developed world. 

It’s not clear at what point there might be official and public recognition that the Paris Agreement NDC targets are slipping out of reach. But until that happens, it will be more difficult to discuss alternative uses of resources to more effectively manage climate change.   

Neil Theobald has more than 40 years’ experience in the oil and gas industry, including 17 years at Chevron, where he was Vice President, Global LNG, Gas Supply & Trading. He has been a Senior Advisor to ANGEA since 2021.

ANGEA is an industry association representing LNG and natural gas producers, energy buyers, suppliers and companies in APAC. Based in Singapore, it works in partnership with governments and societies across the region to deliver reliable and secure energy solutions that achieve national economic, energy security, social and environmental objectives and meet global climate goals.