Even though extensive research has been conducted on the net-zero transition, the socioeconomic impacts have not been considered at sufficient scale and complexity. We are developing the Climate Transition Impact Framework (C-TIF) to address this gap. We dedicated the past six months to examining the value and feasibility of harnessing existing climate scenarios to understand these socioeconomic impacts, resulting in the collection of dimensions and metrics in the C-TIF and the illustrative results.
This framework has been developed in concert with more than 60 organizations ranging from intergovernmental organizations, multilateral development banks, and academic institutions to philanthropies and the private sector.
At COP28, more than 40 climate leaders gathered to discuss the C-TIF. Participants included representatives from Absa, the Commonwealth Bank of Australia, Earthna, the Energy Transitions Commission, IFC, Standard Chartered, the UN Conference on Trade and Development (UNCTAD), the World Bank, and the World Business Council for Sustainable Development (WBCSD).
The Climate Transition Impact Framework proposes a structured, forward-looking approach that would enable decision makers to compare the potential socioeconomic impacts of different climate action pathways. Its intent is to accelerate the net-zero transition by enabling the world to meet the goals of the Paris Agreement in a human-centric way. The framework has an initial list of 50 metrics across five dimensions: affordable energy access, investment requirement, jobs impact, growth and competitiveness, and lived environment and health (exhibit).
The C-TIF has three core value propositions:
- A framework that benefits from broad stakeholder input. A validated initial set of selected socioeconomic dimensions and corresponding metrics was developed with the engagement of more than 60 organizations and 180 individuals. These entities and individuals are aligned on the need for more robust quantitative analysis to predict and plan for the net-zero transition’s socioeconomic impacts.
- A flexible modeling approach. A meta-level modeling approach that aims to translate and extend climate scenarios and related data into quantifiable projected socioeconomic impacts. It can be updated and adapted as models and data sets change.
- A more comprehensive view across socioeconomic factors. This planning instrument provides quantitative projections of the potential impacts across a broad set of socioeconomic metrics, time horizons, and demographic groups. Stakeholders can use this view to inform climate commitments and financing at the subnational, national, and global levels.
The C-TIF can enable stakeholders to make more informed decisions
The enormous scale of the climate challenge requires decision makers to balance significant trade-offs and adopt new tools to provide a nuanced, multidimensional, socioeconomic, and empirical perspective. To date, transition planning has focused on assessing marginal abatement cost curves and optimizing the economic cost of achieving goals in line with the Paris Agreement. However, the same quantitative focus has yet to be applied to understand the transition’s socioeconomic impacts. Debates over the transition’s societal implications sometimes lack empirical foundations, resulting in qualitative outlooks that may hinder climate action.
The tools and research currently available to support climate action assess socioeconomic impacts from a multitude of different angles but often do not interrelate dimensions such as health and energy price. In addition, they mainly look backward or have specialist mandates. While these tools are fit for purpose, they can present a partial view to decision makers. This lens can lead to suboptimal climate action because elements such as investment and health benefits are assessed in isolation rather than simultaneously. Since optimal climate action should consider economic and socioeconomic impacts, the C-TIF aims to provide the framework, modeling approach, and quantitative fact base to equip climate action decision makers with a more holistic view of the transition’s impacts on people. Many stakeholders have underscored the need for this predictive lens that is complementary to the body of existing work on climate impacts.
More than 40 climate leaders gathered at COP28 to discuss the C-TIF
Participants from intergovernmental organizations, multilateral development banks, academic institutions, philanthropies, and the private sector pressure-tested C-TIF’s design and approach. Participants included representatives from Absa, the Commonwealth Bank of Australia, Earthna, the Energy Transitions Commission, IFC, Standard Chartered, the UN Conference on Trade and Development, the World Bank, and the World Business Council for Sustainable Development.
The discussion had four main takeaways:
- A common framework is needed.
- Collaboration is essential.
- The framework provides a first, systematic look at a broad set of projected metrics but should be developed further over time with new metrics, models, refined analytical approaches, and granularity.
- Implementation would require a coalition and broad adoption to avoid fragmented approaches.
The C-TIF is still in the concept phase
This initial version of the C-TIF is the first step on a multiyear journey to elevate the socioeconomic impacts of the transition and provide information to guide the trade-offs that decision makers must consider to achieve the Paris Agreement. The path forward would include continued refinement with input from a broad set of stakeholders, road testing with institutions and governments, and the establishment of a multiparty coalition to operationalize this concept to make it an asset for the global community. In addition, a C-TIF technical report containing insights on the socioeconomic impacts from the latest climate scenarios is slated to be released regularly.
For a detailed overview of the C-TIF and illustrative results based on the NGFS Net Zero 2050 and Current Policies scenarios, please see the C-TIF concept note.
