Cooperative Climate Action in the Decisive Decade

Driving a systems approach for sector-wide cooperative climate action after COP26

As the world economy rapidly decarbonizes to meet global climate goals, the export credit sector must keep pace. Countries representing over two-thirds of global GDP have now set net zero targets, as have hundreds of private financial institutions. Public and private initiatives are now working to develop new standards and methodologies for shifting investment portfolios to decarbonization pathways based on science. However, export credit agencies (ECAs) are only at the beginning stages of this seismic transformation. On the one hand, the net zero transition creates risks to existing business models and clients for the many ECAs, while on the other, it creates a significant opportunity for ECAs to refocus their support to help countries and trade partners their climate targets. ECAs can best take advantage of this transition, and minimize its meet risks, by setting net zero targets and adopting credible plans to decarbonize their portfolios. Collaboration across the sector can be a powerful tool for advancing this goal.

This document reflects a common vision for the ‘ecosystem’ of global climate action, through the lens of what it will take to transform every sector of the global economy in a timeframe that meets the highest ambition of the Paris Agreement in delivering a climate resilient, net zero and nature positive future. This vision articulates what the necessary level of cooperation and coordination within the ecosystem entails, and how the multitude of actors that comprise it can work together to realize its full potential in this decisive decade and beyond. This document reflects the innovations that have already occurred within the climate action field, identifies strategic opportunities on the horizon, and describes how the landscape is evolving to advance the goals of the Paris Agreement.

• To achieve global climate goals and build a more resilient economy, the rules and institutions of global economic governance must align around a green transition.

• This report describes a package of 11 ideas for reforms across the global trade and investment regimes, broadly understood, that can remove barriers to, and create drivers for, climate action. Some are mature efforts already in progress; others are new areas of work that require more research and strategizing.

• The package elements fall into three categories: steps that can be taken within existing structures, options that pioneering governments can advance unilaterally or in small groups, and broader reforms of governance arrangements.

• This package of ideas is not exhaustive. Many other potential avenues and proposals are being explored elsewhere in scholarly and policy debate. Some proposals are not mentioned here as they already attract considerable attention and focus from a diversity of stakeholders and some governments.

• Whilst ensuring that economic responses to COVID-19 are climate friendly remains of immediate and paramount importance, we must not lose sight of the direction of travel needed over a more extended time horizon. With this in mind, these reforms target outcomes that could feasibly be delivered over the next 12-36 months.