The United States today submitted its updated Nationally Determined Contribution (“NDC”) under the Paris Agreement to the UN Climate Change secretariat. The updated NDC sets an economy-wide target of reducing net greenhouse gas (“GHG”) emissions by 61-66 percent below 2005 levels by 2035 (the “Target”). The Target increases ambition from the previous target of 50-52% below 2005 levels by 2030, and provides a pathway to achieve net-zero emissions by 2050 in line with the goals of the Paris Agreement.

President-elect Donald Trump, who will take office on January 20, 2025, is widely expected to withdraw the U.S. from the Paris Agreement on the first day of his new administration. Many observers are consequently treating the new NDC as mostly symbolic. See our earlier analysis on U.S. withdrawal from the Paris Agreement here.
 
This bulletin briefly summarizes key details of the NDC and the Biden-Harris Administration’s Fact Sheet on the Target.
 
Net-zero by 2050. The Target aligns with President Joe Biden’s goal of a net zero GHG economy no later than 2050, with the 61-66% range on a “straight line or steeper trajectory to net zero emissions by 2050 for all greenhouse gases.”
 
Article 6. The NDC is very light on international cooperation through now-finalized rules of international carbon markets under Article 6 of the Paris Agreement. Notably, however, the new NDC omits language included in the last U.S. NDC, which indicated that the U.S. did “not intend to use voluntary cooperation using cooperative approaches referred to in Article 6.2 or the mechanism referred to in Article 6.4 in order to achieve its target.”
 
Methane and other emissions. The updated NDC does not set sub-targets for individual GHGs; however, as part of achieving the Target, it is anticipated that methane emissions will also be reduced by at least 35% from 2005 levels by 2035. The Inflation Reduction Act (“IRA”) provides more than $1B for a new Methane Emissions Reduction Program and a new waste emissions charge (see our bulletin on the IRA here). The NDC provides that reducing methane emissions is “among the fastest ways to reduce near-term warming and is an essential complement to carbon dioxide (CO2) mitigation.” 
 
Achieving the Target. The U.S. met and surpassed its 2020 target of net economy-wide emissions reductions of 17% below 2005 levels, its initial Paris Agreement target set in 2015, and is on track to meet its target of 50-52% below 2005 levels by 2030. Achieving the new Target will require additional action as the U.S. is currently projected to reduce emissions by only 57% by 2035, largely the result of the climate-related and emission reduction financial support provided through the Bipartisan Infrastructure Law (“BIL”) and the IRA.
 
Sector-by-Sector pathways to the Target. The NDC provides the following pathways for achieving the Target on a sector-by-sector basis:

  • Clean energy transition in the power sector. The IRA and BIL are seen as driving clean energy deployment by expanding critical supply chains, upgrading the electrical grid, and supporting growing electrification across sectors like transportation, buildings, and industry. Technology-neutral tax credits under the IRA are supporting historic private-sector investment in clean electricity, with most 2024 capacity additions focused on wind, solar, and battery storage. New federal regulations also mandate pollution controls for coal and gas-fired power plants, reducing GHG emissions and improving public health.
  • Climate-smart agriculture and forestry practices. The federal government indicates that it is promoting climate-smart practices like reforestation, grazing management, and wetland restoration through increased funding, methane capture incentives, and public-private partnerships. Investments in native seeds and seedlings will enhance carbon sequestration, while state, local, and Tribal governments are expected to expand incentives and technical support. Efforts will focus on developing markets for climate-friendly bioproducts, including biofuels and durable wood products, alongside high-integrity carbon markets aligned with the May 2024 voluntary carbon market principles (see our earlier bulletin here).
  • Transitioning the building sector to zero emissions. The U.S. is advancing zero-emissions buildings through the Department of Energy’s 2024 National Definition of a Zero Emissions Building, IRA tax incentives, energy rebates, building codes, and appliance efficiency standards. Federal leadership is supporting the transition of federally-owned buildings and encouraging energy-efficient construction for private homes. Utility reforms and industry innovation in clean technologies will further drive emissions reductions, create jobs, lower energy costs, and align with the Target.
  • Clean transportation. Investments from the IRA and BIL, combined with federal standards, are accelerating EV adoption, expanding charging networks, prioritizing investments in EV supply chains and manufacturing, integrating EVs with the grid and deploy electric charging ports and other refueling stations such as for clean hydrogen. Investments in low-carbon fuels, zero-emission freight hubs, and clean port infrastructure will further support the Target.
  • Industrial transformation. The U.S. has said that it is cutting industrial emissions and boosting clean manufacturing through IRA and BIL investments in process efficiency, electrification, low-carbon fuels, carbon capture, and circular economy practices. The Federal Buy Clean Initiative is also driving demand for low-emission materials, with over $4B supporting clean steel, glass, concrete, and asphalt for federal projects. Further, partnerships with states, Tribal governments, and the private sector is increasing the procurement of clean materials, and the development of a new trade framework will incentivize industrial emissions reductions globally.

Virtual briefing today. We encourage interested stakeholders to register for the upcoming virtual briefing hosted by the U.S. Department of State on the updated NDC today at 3:30PM ET / 12:30PM PT. Speakers include John Podesta, Senior Advisor to the President for International Climate Policy, Ali Zaidi, Assistant to the President and National Climate Advisor, and Sue Biniaz, Principal Deputy Special Envoy for Climate, U.S. Department of State.
 


For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

Author

Write A Comment