Nationally Determined Contributions - our economic playbooks for the future

The climate crisis is accelerating - and so must our response. The science is unequivocal: without rapid, sustained efforts to tackle the threat of global warming, the world faces an unlivable future for humanity.

Current global climate commitments, as laid out by National Determined Contributions (NDCs), remain well off track from what is needed to meet the Paris Agreement’s goal of limiting global warming well below 2°C, and ideally 1.5°C, above pre-industrial levels. Existing NDCs place the world on a trajectory for 3°C of warming - a path that carries catastrophic consequences for ecosystems, economies, and human well-being.

NDCs are too often treated as peripheral to mainstream economic thinking, isolated from the big levers of growth and investment. But that view is both outdated and dangerous. In truth, NDCs are not just climate pledges, they are strategic economic roadmaps. If designed with ambition and embedded into national policy frameworks, they can become powerful levers for inclusive, innovation-led growth.

We are failing to tackle climate change not because of a lack of intent, but because our economic systems have yet to place climate challenge at their core. Climate goals are viewed as bolt-ons to business growth models and not core components. NDCs remain disconnected from national industrial strategies, financial policies and global governance structures -the very tools that shape our societies. It is time to change that.

As I have argued in my work with both the Brazilian and, now, South African G20 presidencies , aligning climate ambition with industrial policy and outcomes-oriented finance is one of the most effective ways to spur new industries, create good jobs, and build resilient communities. This requires moving beyond market-fixing to market-shaping, using public policy not just to correct failures, but to actively steer economic activity toward sustainable and inclusive outcomes.

As such, we need to stop seeing climate policy as a cost and start recognising it as an investment in a better future. The countries that do this well won’t just lead in emissions reduction: they’ll lead in clean energy, green infrastructure, and international competitiveness.

This will require coordinated action across all levels of government, and deep partnerships with business, finance, and civil society. Public budgets and policy tools must be used not only to ‘de-risk’ private investment, but to steer it purposefully toward long-term sustainability. NDCs should become the central mechanism for guiding this transformation: dynamic, living strategies that drive structural change.

Reimagining fiscal and financial policy is central to this task. Every public pound, dollar, or euro should be aligned with our collective climate goals. Every financial regulation should help channel capital into activities that are carbon-neutral, inclusive, and resilient. The question is no longer whether we can afford to act. It is whether we can afford not to. The cost of inaction is rising faster than any investment we might make today.

But the challenge is not just about mobilising more finance - it's about how that finance is structured and deployed. As my recent research with Rogerio de Almeida Vieira de Sa, Policy Fellow at UCL Institute for Innovation and Public Purpose, on blended finance demonstrates, we must move beyond simply trying to close financing gaps and instead focus on building mission-oriented investment pipelines that direct capital toward structural transformation. This requires rethinking country platforms as delivery mechanisms - shifting from pipeline-focused vehicles to purpose-driven engines that connect climate finance directly to national development priorities and align private capital with public purpose. I will be publishing a briefing on this approach later this year.

Sustainable prosperity is the growth story of the 21st century. And yet, too many governments are still operating with outdated playbooks. We need a new paradigm - one that sees economic policy and climate action not in tension, but in alignment. Just as past generations reimagined the economy in times of crisis, we too must be architects of a new paradigm. From electrifying nations to launching clean energy revolutions, history has shown us what’s possible when governments lead with vision and take bold mission-oriented strategies.

Today’s intersecting disruptions, from escalating climate shocks to rising geopolitical tensions, demand the same kind of leadership. That is why the Climate Crisis Advisory Group (CCAG) put forward its most recent report: NDCs as Levers for Prosperity, Health, and Resilience.

The paper presents a pragmatic path forward in showing how NDCs, if fully integrated, can align climate ambition with economic strategy, public trust, and structural reform.

The principles are practical, not abstract. In an era of compounding risk, we show how countries can attract climate finance, reform institutions, build cross-sector coalitions, and design NDCs as tools for inclusive, innovation-led development.

The window of opportunity is narrow. Governments around the world are under pressure to deliver better growth, restore public trust, and meet climate commitments. Done right, high-ambition NDCs offer a way to do all three. They can help countries shift from short-term crisis management to long-term mission-driven governance.

As we approach COP30 in Brazil – a country pioneering a new approach to sustainable development – policymakers must seize this moment to transform NDCs from technical documents into engines of economic transformation. Resilience and prosperity are not parallel goals; they must be met together.

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