Although there is meaningful momentum, the world is not on track to achieve greenhouse gas emission reductions in line with the Paris Agreement’s goals. Despite numerous net-zero commitments from countries and companies, and an increase in climate-related investments, global CO2 emissions are far from on track to reach net-zero by 2050.
As the world considers how to meet climate goals in the aggregate, national decision makers will need a comprehensive understanding of the trade-offs associated with different transition pathways. A successful net-zero transition will require achieving four interconnected objectives: emissions reduction, affordability, reliability, and industrial competitiveness. A well-executed transition must ensure that energy and materials needed for the transition are affordable; supply of energy and physical inputs remains reliable to meet the growing demand; and companies and countries remain competitive to benefit from the transition. At the same time, the world will need to consider resilience commitments around advancing other Sustainable Development Goals (SDGs), including around biodiversity and pollution, and planetary boundaries. Further, differentiated impacts between groups both within and across countries need to be managed for the transition to be effective and sustainable for the global community as a whole. To date, however, climate transition planning has not adequately addressed these dimensions together, nor has it adequately addressed the implications of this transition for the lived experience of people on the ground.
The Climate Transition Impact Framework (C-TIF) proposes a structured, forward-looking approach that can help decision makers compare the potential socioeconomic impacts of different climate action pathways to support an equitable and inclusive transition (exhibit). Decision makers have lacked quantitative data on the possible co-benefits and burdens of their climate action choices. The C-TIF seeks to provide an initial quantification of the socioeconomic impacts for a given climate pathway across five dimensions that, together, provide a comprehensive analysis of the economic factors and experiential aspects associated with that pathway. Its purpose is to support the transition by enabling the world to measure progress towards the goals of the Paris Agreement and the cost of transition pathways.
The C-TIF was designed to be flexible for use across in-country pathways and globally optimised scenarios. Thus, it can be applied with different pathways and scenarios—such as those developed by the Network for Greening the Financial System (NGFS), the International Energy Agency (IEA), the Inevitable Policy Response (IPR), and others—to quantify the co-benefits and burdens of these scenarios on people.
This report illustrates the C-TIF using outputs produced with scenarios from the NGFS. The global climate scenarios from NGFS are used as an illustration, to help readers understand how the C-TIF framework can be applied. The report uses these scenarios because they are available open source at the country level, cover all major energy and land-use systems, are included in the Intergovernmental Panel on Climate Change’s AR6 synthesis report, and are widely used in the financial sector. Nonetheless, some important caveats and limitations must be called out. The NGFS scenarios explore risks and opportunities in a range of hypothetical futures. Because they are globally optimised, they are not intended to prescribe national pathways or precisely depict the on-the-ground reality for any specific country. There are economic and energy-system-related impacts that are not fully captured, and which pose inherent methodological challenges and other uncertainties, as outlined in chapter 3. This report also underscores areas warranting future research and necessary further improvement to the C-TIF.
Results should thus be understood as an illustration of how to apply the C-TIF and not as the definitive direction and magnitude of transition impacts for the countries represented. Decision makers using the C-TIF to inform their climate actions should populate the framework with applicable and relevant regional, country, or subnational data to reflect their specific contexts. It is important to also understand the limitations and uncertainties inherent in the underlying modelling (see sidebar, “The purpose of the C-TIF report”).
The C-TIF will continue to evolve based on broad stakeholder input and further application to more granular climate transition pathways. The C-TIF was introduced in 2023 with the release of the Concept Note and a list of around 70 metrics developed in concert with 70-plus organisations. This report aims to illustrate C-TIF outputs using NGFS scenarios to show the co-benefits and burdens of, in this case, a globally consistent net-zero pathway. Further refinement of the C-TIF will continue to come from consultation and in-country testing with additional locally relevant transition pathways and more disaggregated data, as well as through the incorporation of a broader set of metrics, such as those relating to biodiversity loss.
This report explores the following topics: the rationale for C-TIF, the methodology underpinning this illustrative application of the framework to NGFS scenarios, high-level C-TIF outputs illustrating the method, potential response measures or levers, and detailed C-TIF outputs for 15 countries using NGFS scenarios.
