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Climate-forward government

Seven lessons for effective climate action

The Biden administration’s emphasis on the climate issue is driving a change in the climate action landscape. Government agencies have a great opportunity to approach climate issues with fresh perspectives and fresh solutions.

Pivot to the “how”

As Sam Ricketts, co-founder of Evergreen Action, observed, “Every agency is a climate agency now.”1 Ricketts’ observation captures the reality of the challenge ahead. We cannot tackle the 21st century imperatives of climate change with 20th century solutions. Bolder actions and a whole-of-government approach are needed.

Greenhouse gas emissions are embedded in every aspect of our daily lives—in energy production, transportation, buildings, agriculture, manufacturing, supply chains, consumer products and more. Individual, local efforts will be important, but ultimately, a broader transformation of society will be needed, as this is fundamentally a “system-of-systems” problem.2 Government is uniquely positioned to catalyse and orchestrate the type of multidimensional response required.

Climate leadership is marked now by ambitious goals and aspirations. Progress, however, will be marked by what we collectively do—and how.

As agency leaders look to take action, a multidimensional perspective on the climate problem can identify new lessons about what works in today’s context. In this paper, we examine seven of the most important lessons to date for agencies combatting climate change.

Ongoing problem, new landscape

The Biden administration has brought a new sense of urgency to climate change, moving quickly from the outset with a series of executive orders and memoranda that call for a whole-of-government approach to the problem. In its first 100 days, the administration has rejoined the Paris climate agreement, elevated climate change to a national security priority, re-chartered a Presidents’ Council of Advisors on Science and Technology, and directed all departments to curb greenhouse-gas emissions (GHGE) (see sidebar, “Climate executive orders and presidential memoranda in the first 100 days”).3 The Biden administration has also put forward a number of legislative proposals that include funding for climate action, including the American Jobs Plan and the proposed fiscal 2022 budget.4

Climate executive orders and presidential memoranda in the first 100 days

Paris Agreement: In January 2021, President Biden inked the Paris Agreement acceptance, reviving the United States’ commitment to climate change action in adherence to the clauses of the Agreement.5

Review of prior climate actions and regulations: The Biden administration issued a series of executive orders that direct agencies to review or rescind environmental rules from the previous four years that do not align with current administration policy. The orders also establish an interagency group to calculate the social cost of greenhouse gases.6

Scientific integrity: An executive memorandum banning improper political interference in scientific research or data collection was issued.7

President’s Council of Advisors on Science and Technology: President Biden rechartered the President’s Council of Advisors on Science and Technology with an emphasis on adding members from sectors outside the federal government.8 The council will advise the president on public policies for a diverse set of issues including the economy, worker rights, education, environment, public health, national security and racial equity.

Tackling the climate crisis at home and abroad: To put climate at the centre of US foreign and domestic policy, Biden issued an executive order9 that:

• Elevates environmental justice as a priority across all federal agencies. As part of this, the administration expects relevant climate investments to deliver 40% of overall benefits to disadvantaged communities. It has also established the White House Environmental Justice Interagency Council and the White House Environmental Justice Advisory Council.

• Makes climate a national security and foreign policy priority

• Establishes a White House Office of Domestic Climate Policy and National Climate Task Force

• Calls for doubling renewable energy production from offshore wind by 2030

• Directs federal agencies to procure carbon-free electricity and zero-emission vehicles made in America

• Pauses new oil and natural gas leases on public lands and offshore waters

• Requires agencies to ensure that federal infrastructure investments reduce climate pollution

• Directs the elimination of fossil fuel subsidies and the identification of opportunities for advancing clean-energy technologies and infrastructure

Another executive order mandates a review of climate-change impacts on migration, international policy and national security.10

Climate innovation working group: A Climate Innovation Working Group was formed to support the national Climate Task Force and help launch Advanced Research Projects Agency-Climate (ARPA-C).11

Securing US’ critical supply chains: An executive order mandates a review of the key supply chain vulnerabilities including critical minerals, rare-earth elements and electric vehicle batteries.12

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In April 2021, the administration expanded on these executive orders, hosting a climate summit with 40 world leaders, at which President Biden announced a series of commitments aimed at keeping the global average temperature from increasing more than 1.5 degrees Celsius.13 Most prominently, President Biden announced that by 2030, the United States would reduce emissions to no more than half of the nation’s 2005 levels. To reach that goal, the administration plans to incorporate climate considerations into a wide range of actions at home and abroad, from increasing public climate finance and transforming energy systems to supporting a zero-emission transportation revolution and encouraging innovation in climate technologies such as carbon capture.14 The administration, as noted earlier, is also asking all federal agencies to treat climate change as integral to their missions.

These new policies will require new approaches to action. In part because the challenges are greater and in part because much has changed since agencies developed climate action plans during the Obama administration. Consider this:

• Many US leaders and organisations, including the leaders of 125 cities, nine states, more than 900 businesses and investors and more than 180 colleges and universities, have declared their continued commitment to the goals of the Paris Agreement and their determination to reduce carbon emissions.15

• There is much to learn from other nations that have been steadfast in confronting the threat. President Biden’s pledge to halve US greenhouse gas emissions by 2030 is a bold move in that direction. The target more than doubles the country’s prior commitment under the 2015 Paris Agreement.16

• Many companies have moved farther and more quickly than government agencies in their climate actions and commitments. Companies are acting in part because their shareholders believe that a company’s environmental, social and governance (ESG) practices, and its commitment to addressing climate change, are integral to its overall success and long-term profitability.

One significant shift is the increasing willingness of firms to account for Scope 3 emissions—indirect upstream and downstream emissions, excluding power generation—that occur in the firm’s value chain. These often represent the largest part of a company’s emissions and are the hardest to measure.17 As of 2020, roughly 200 of the 1,000-plus companies involved with the Science-Based Targets Initiative, a partnership between CDP, the United Nations Global Compact, World Resources Institute, and the World Wide Fund for Nature that helps guide companies’ decarbonisation efforts, had set Scope 3 emission targets, with another 240 committing to do so within the year.18

• Citizen support for combatting climate change has risen in the last decade.19 Today, two-thirds of Americans feel the government isn’t doing enough to protect the climate and the environment, with bipartisan support for many policies.20

• Clean energy technologies, from batteries to solar panels, have improved significantly. They now offer greater performance at lower cost, giving agencies more options to promote decarbonisation while simultaneously improving their ability to achieve their climate objectives. Essentially, we’re transitioning from an age in which we paid a premium to generate clean energy to one in which clean energy production is cheaper than conventional sources. But other important technologies, such as storage and smart grids, remain costlier than incumbent solutions. These are areas of intense research and investment.21

This changing landscape means that many older approaches have been superseded; they simply won’t get the job done.22 The 2020 United Nations Emissions gap report calls existing national climate pledges “woefully inadequate.”23 On the positive side, advances and experiences in combatting climate change have led to new lessons and insights about which options and actions work. Much remains to be learnt, but these lessons are a good place for agency leaders to start as they pivot to broader action.

Seven lessons for combatting climate change

The new landscape and the Biden Administration’s emphasis on climate change is giving government agencies an opportunity to approach climate issues with fresh perspectives and fresh solutions. By examining effective climate action in the US and abroad, we’ve identified seven of the most important lessons for today’s leaders to consider (figure 1).

Lesson 1: Link climate goals with the mission

Many companies have begun to take action to address the climate crisis. They’re disclosing more climate-related information in line with the Task Force on Climate-related Financial Disclosures’ recommendations.24 As of September 2020, nearly 500 companies had approved science-based targets for reducing GHGE, and that number continues to rise.25 One of the clearest lessons from leading firms is that sustainability has evolved into a core business function, central to their strategy and vital to their success.26

While climate change is central to the mission of agencies such as the Department of Energy (DoE) and the Environmental Protection Agency (EPA), for others, such as the Department of Agriculture, it will significantly alter the operational landscape and may compel them to rethink entire programmes. In the current environment, all government entities—federal, state and local—should understand and embrace how climate affects their missions, and how their missions affect the climate. The key will be to take action on climate change in a way that both aligns with and advances their mission objectives.

The key is to take action on climate change in a way that aligns with and advances mission objectives.

Consider, for example, a scenario in which power supplies at a Department of Defense (DoD) facility are interrupted due to severe weather. Such outages impair mission readiness and make it impossible for many employees and service members to do their jobs, resulting in thousands of lost work hours and potential national security vulnerabilities.

The US military has recognised this threat and taken steps to bolster its energy resilience by developing its own microgrids, self-sufficient energy systems capable of functioning without connection to the main grid, as well as additional on-site power generation and other infrastructure upgrades. While such backup power generation previously relied on diesel generators, more recently, the energy mix has shifted to include renewable solar photovoltaic (PV) energy production and battery storage, a move that can strengthen resilience and reduce emissions.

To meet DoD resilience goals for shore infrastructure, each of the service branches has solicited solutions from the private sector through “industry days” and other forums, requests for information and collaborations with energy service companies. The service branches have also used third-party financing to fund energy resilience improvements at their installations, thereby lowering the burden on appropriated funds. Examples of innovative resilience initiatives include implementing an energy battery storage system at Seal Beach, a renewable energy microgrid at Joint Base Pearl Harbor-Hickam, and a biofuel power generation plant at Schofield Barracks.27

These examples illustrate how mission and climate actions can benefit one another. By combatting climate change through resilient and often renewable energy generation, agencies can help protect the environment while strengthening their ability to excel at their core missions. One potential implication of this perspective is that climate change is no longer the exclusive purview of environmental and energy-related agencies; it will likely have a direct or indirect impact on almost every public agency.

Many federal, state and local agencies have worked for years to reduce their energy consumption and environmental waste. But this administration’s whole-of-government approach compels all agencies to consider how they can link their mission and climate-change actions to the benefit of both.

Lesson 2: Integrate climate governance actions inside and out

Meaningful change doesn’t happen in a vacuum. To meet the Biden administration’s ambitious goals, agencies will need governance models that match the scale, scope and complexity of the problem.28 It isn’t enough to set goals and use a regulatory and policy agenda to push toward them. Agencies must look at the challenge from the outside in, defining the effect they want to have on the broader world before tailoring their initiatives to achieve it. Agency leaders also must remember that the battle against climate change should be an integrated effort. To make a real impact, an agency needs an executive champion to take charge of interagency and intra-agency coordination.

Consider Australia’s state of Queensland, whose government plays a vital role in reducing the energy industry’s carbon footprint. Queensland once led Australian states in pollution reduction, but in recent years, the trend reversed. Today, Queensland is the biggest contributor (28%) of emissions in the country.29

In hopes of returning Queensland to its former status as a carbon-cutting leader, the state’s Department of Resources has begun using a sophisticated decision-making tool to conduct comparative analyses of various abatement options. This “marginal abatement cost curve” (MACC) tool compares the costs and promise of each potential strategy, weighing its cost impact against its potential for reducing emissions, based on variables including energy price fluctuations, carbon pricing and capital and operational costs.30 With this information, Queensland can determine which policies will help its energy sector make the biggest cuts in emissions while remaining cost-competitive in Australia and internationally. This type of analysis is essential for effective decision-making for executives driving their agency’s climate agenda.

In view of the internal governance of most government agencies, it’s not hard to understand why leading private entities often are ahead in addressing climate change. With shareholders, consumers and employees demanding meaningful climate-related commitments, a growing number of companies are adding chief sustainability officers to their management teams. These executives coordinate efforts throughout the entire organisation to promote an integrated climate response. Contrast this with the bottom-up approach more common in government, which decentralises climate initiatives across the enterprise. The lack of coordination creates a significant potential for redundancy, waste and missed opportunities.

To meet the administration’s ambitious targets, agencies must rethink their internal governance models.

Take for example the problem of rising temperatures. In the average US year, heat kills more people than any other weather-related event. Cities suffer the most due to high population density, an abundance of heat-retaining materials such as concrete, and a comparative lack of greenery. To coordinate the response to this problem, some cities are appointing “chief heat officers.” Miami-Dade County’s chief heat officer leads area efforts to combat rising temperatures, working with stakeholders including local authorities, academic institutions and community groups to identify and develop response plans for the most critical challenges. Solutions include housing weatherisation programmes, shaded bus stops, new centralised cooling centres for residents during heatwaves, and programmes that help businesses adjust their work policies for particularly hot days.31

To make meaningful headway on the Biden administration’s goals, governance models must reflect the problem’s scale and complexities—and the degree of coordination required to marshal a concerted response. They must treat government as a component of a broader community, integrating agency efforts across the enterprise and always considering the effect of government initiatives on the broader ecosystem.

Lesson 3: Take a more innovative approach to innovation

As the World Economic Forum observes, “The only way to get ahead of a crisis as large as climate change is through groundbreaking technological innovation in clean energy and low-carbon technologies. And that, in turn, will require efforts to mitigate investment risks for private sector actors, who cannot be expected to ignore their own bottom lines.”32

The journey to sustainability will be an uphill climb, and the public and private sectors must make it together. The dilemma of accommodating groundbreaking technology while mitigating private sector risks is captured by MACC (figure 2), the type of model Queensland uses to weigh abatement strategies. As you move from left to right along the curve, opportunities to reduce emissions become more costly; those below the horizontal axis offer potential savings even after upfront costs are factored in, while those above it entail a net cost.

What does this mean? Near-term gains are easy to justify through strategies that pay for themselves, though they may be difficult to scale quickly. But subsequent gains may be prohibitively expensive and unable to attract commercial investment and adoption without breakthroughs. The MACC analysis provides more than a guide for decision-makers looking for a secure return in the near term. It potentially points the way to areas where research and innovation are needed today to make the high-impact but low-return technology solutions for the future more economically viable.

Government agencies must leverage their authority and resources to promote disruptive technologies and innovative financing partnerships to address the challenges posed by climate change. The administration’s ambitious targets will require innovation on the supply side, on the demand side and in the meshing of supply and demand.

Historically, agencies have focussed their efforts on the supply side of the equation. Since 2009, for example, the Advanced Research Projects Agency–Energy (ARPA-E) has provided more than US$2.6 billion in funding to researchers working on more than a thousand potentially transformative energy projects.33 In February 2021, DoE pledged to provide US$100 million via ARPA-E to fund early-stage research into low-carbon energy technologies. And, as noted earlier, the Biden Administration plans to launch a version of ARPA focussed specifically on climate technologies, ARPA-C, with a heavy emphasis on demonstration projects.34

But it’s not simply a question of higher R&D investment. Agencies should consider encouraging industry to pursue breakthrough technologies. The need is clear. According to the International Energy Agency, just six of 46 energy technologies and sectors assessed in its most recent progress report are on target to meet global commitments enshrined in the 2015 Paris climate agreement (figure 3).35 The difference that government support can make in accelerating the viability of key climate technologies has been demonstrated (see sidebar, “Fostering disruptive climate innovation”).

Fostering disruptive climate innovation

Disruptive technologies can transform whole industries and create entirely new markets, business models and jobs. For these disruptions to take root, however, they must be fostered and protected. Government has an array of tools it can use to nurture the growth of disruptive technologies.

Take the example of solar PV technology. In 2009, despite growing demand and technological feasibility, the United States didn’t have a single utility-scale solar PV plant (one with more than 100 MW of power-generating capacity); the private sector hadn’t financed and scaled PV on this scale. Then the government decided to intervene. In 2009, the DoE’s Loan Guarantee programme began supporting promising solar PV projects in their early stages, ultimately investing around US$4.6 billion on multiple projects. This investment, along with a number of favourable federal and state policies, led to a decade-long boom in the industry. Today, solar PV is the fastest-growing source of electricity in the United States, with more than 37,000 MW of utility-scale solar projects in operation.36The cost per MW for utility-scale PV systems fell by 82% from 2010 to 2020.37

To propel a disruptive innovation, governments can remove subsidies, contracts, and other advantages that allow incumbents to dominate a market space, levelling the playing field for disruptive innovation. Another option is to sunset existing programs. Once it becomes clear that a disruptive innovation provides a better and cheaper business model, policymakers can reduce or end funding for traditional approaches. This cycle should be repeated to pave the way for each new generation of disruptions.

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It is essential that governments continue to foster innovation from the supply side, while at the same time finding new ways to foster innovation. The Biden administration’s proposed fiscal 2022 budget calls for investing US$10 billion to spur clean energy innovation.38 The resulting breakthroughs are likely to disrupt the status quo—and entrenched incumbents often resist such disruptions. This means that supply-side success will not be enough.

To maximise the chances that a useful scientific or technological idea will have real-world impact, agencies should look beyond purely technical challenges to consider regulatory hurdles, industry economics, entrenched incumbents, vested interests, and all the other nontechnical or semitechnical hurdles that disruptive technologies and new entrants are sure to encounter. Agencies must help innovators overcome such obstacles—including clearing regulatory barriers that stand in the way—to spur innovation at the speed and scale necessary to curtail climate change.

This calls for a demand-side approach. One obvious target is purchasing; President Biden has announced his intention to replace the federal government’s entire fleet of 645,000 vehicles with US-made electric versions, which would represent a huge impetus for industry investment.39

But agencies also can influence demand through innovative financing. In Vietnam, for example, the US Agency for International Development has worked with that nation’s Electricity Regulatory Authority to launch a pilot direct power purchase agreement (DPPA) programme. This effort won support from large companies such as Nike and Apple, which plan to use the DPPA to spur the development of renewable power generation in Vietnam. This will allow them to continue manufacturing there while meeting their ambitious corporate social responsibility and ESG commitments.40

Improving the demand side for breakthroughs doesn’t always involve dollars; it can also involve data.

Improving the demand side for breakthroughs doesn’t always involve dollars; it can also involve data.

This integration of supply and demand across the ecosystem represents a third area of opportunity for government to foster climate breakthroughs. New York state is jumpstarting climate-related innovation in the energy sector by using data-sharing to help build the grid of the future. Historically, the lack of access to grid data kept distributed energy resource (DER) providers from identifying potential customers who might be interested in options such as rooftop solar and behind-the-metre power storage. New York launched a comprehensive utility transformation initiative, “Reforming the Energy Vision” (REV), to make grid and customer data available to DER providers so they can participate in an expanding robust market for their renewable technologies.41 Ideally, the initiative will encourage DER providers and utilities to collaborate on building renewable offerings that match customer preferences and give consumers more choices on how to meet their energy needs. Actions like REV by New York regulators to foster data exchange have potentially significant financial implications. Distributed energy solutions involving rooftop solar and home batteries can offer lower overall costs than purely centralised solutions, with models estimating the savings nationally at nearly US$500 billion, while creating a million new jobs.42

Agencies should start with the end in mind and work backwards through the range of possible barriers. Ask what would have to happen to make the technology succeed in the marketplace, and how the agency can help. This applies to agencies that want to promote energy innovation directly, buy innovative solutions or regulate climate-related technologies. The answers could involve helping an innovator develop a go-to-market strategy that addresses stakeholder concerns; developing exit strategies that match innovators with funders or acquirers; or identifying and eliminating regulatory hurdles in the government procurement process.

Overcoming the “valley of death”

Successful technologies often fail to succeed in the marketplace. The treacherous gap has been dubbed the “valley of death”—the period between product development and commercialisation, when private investment can be scarce (figure 4).43 The valley of death problem for innovators has been exacerbated by its reliance on government-funded and academic research rather than corporate R&D.44

A climate technology must traverse the valley of death to enter commercial use. Universities and government agencies recognise this problem, but haven’t solved it yet. Difficulties at this stage often are ascribed to misaligned incentives for government and a risk-reward profile too poor to justify business investment.45

Improving the federal technology transfer process will require us to mesh the traditional supply-side “push” mindset with demand-side “pull” strategies. This, in turn, will require commercialisation conversations and industry input early in the R&D process.

From a technological standpoint, recent advances in fields including data management, information processing and automation open the door for dramatically more efficient and effective technology transfer. Artificial intelligence (AI) and machine learning can be leveraged to help improve the efficiency of technology transfer by identifying potential targets through matchmaking algorithms.

While new technologies may help, what may be most important are new strategies for tech transfer. DoE’s National Labs provide an example. The agency is seeking to improve its technology transfer to the private sector through innovation summits that share information and ideas between industry, universities, manufacturers, investors, customers and experts from the agency’s R&D complex. DoE’s Technology Commercialisation Fund matches private dollars to promote promising energy technologies for commercial purposes.46 And recently, the agency began identifying potential commercialisation pathways in terms of the breadth of market opportunities and the challenges of integration with existing systems and supply chains.

A closer look at the market experience of many climate technologies suggests there may be four separate hurdles on the journey to commercialisation. Failure at any hurdle can prevent successful adoption.47 The first is the step from lab to startup. The second is the launch of a minimally viable product in a complex marketplace. The third is the demonstration of a full-scale commercial product or facility. Finally, there’s the need to prove that the product is stableprofitable and scalable.

To truly promote climate innovation, agencies must think about how they could affect each of these challenges. ARPA-E’s SCALEUP funding can help to bridge the third hurdle, for example, but does little for the others.48 And the need to consider these hurdles applies to more than funding. Federal, state and local regulators, for instance, can affect all four.

Lesson 4: Don’t just identify climate risks; manage and reduce them

As the effects of climate change become increasingly visible in extreme weather events, climate risk disclosure is gaining momentum around the world. As National Economic Council director Brian Deese observed, “Our modern financial system was built on the assumption that the climate was stable … [T]oday, it’s clear that we no longer live in such a world.”49

The Biden administration’s executive order on climate-related financial risk directs all federal agencies to launch or expand efforts to analyse and lessen economic risks stemming from climate change.50 It’s not enough to identify and disclose risks; agencies need to manage the risks they identify, both the preventable and the unavoidable.

Fortunately, new tools, technologies, and techniques give agencies unprecedented abilities both to avoid certain climate-related risks and to reduce harm when such risks are unavoidable.

Cloud computing power and sophisticated AI/machine-learning algorithms, for instance, can improve our ability to parse weather data. This could help a government decide where not to build, for instance, or whether to adapt an existing site to accommodate the effects of climate change—or retreat to higher ground.

Digital twins—digital simulations of physical systems, assets, or processes—can help agencies consider the ramifications of different strategies in a variety of climate-change scenarios exploring risk reduction, as well as the social and equity impact. For instance, agencies can use digital-twin modelling to plan life-saving evacuation routes for extreme weather events, or to determine which coastal infrastructure is at greatest risk from rising sea levels. In the European Union’s “Destination Earth” initiative, scientists are creating a detailed digital twin of the entire planet to accurately map climate development and forecast extreme weather events.51

Digital twins can also provide key insights for cities in their fight against global warming. Singapore is building a “Digital Urban Climate Twin” of the city to help planners determine how factors such as traffic, vegetation and geography affect outdoor temperatures, allowing them to develop viable solutions for hotter times.52

Such tools can also help governments find the best returns for risk-reduction projects, given the inevitable limitations on time and resources. Analysis could reveal, for example, that spreading a budget across numerous smaller projects could reduce risks more effectively than would a single major initiative.

Data analysis plays a key role in understanding and mitigating risk. To this end, the Federal Emergency Management Agency (FEMA) recently introduced a free, downloadable National Risk Index (NRI) that allows agencies to assess 18 different risk factors through a single database. The NRI contains measures of social vulnerability; a community in which many residents don’t own cars, for instance, may need more assistance with evacuation in the event of a natural disaster, while one with many mobile homes is likely to face more danger in severe storms.

“Unlike traditional natural hazard risk assessments, which address one hazard at a time and target only the most vulnerable areas, the index combines multiple hazards with socioeconomic and built environmental factors to provide a holistic view of community-level risk nationwide,” according to a FEMA spokesperson.53

As FEMA evaluates applications for grants to fund hazard mitigation projects, the NRI will help it apply its resources strategically to protect as many people as possible.

Lesson 5: Overturn orthodoxies to enhance operational sustainability

As the saying goes, what got you here won’t get you there.

Consider the case of vehicle emission reductions. The federal government employs more than 280,000 employees in the nation’s capital. For decades, in an effort to cut vehicle emissions, federal agencies have used incentive programmes to try to persuade those workers to carpool or take mass transit. Similarly, various governments have subsidised purchases of hybrid and electric vehicles and installed plug-in parking spots.

But none of these efforts can compare with the potential gains associated with radically reducing the number of commuters.

COVID-19 has shown that work as we know it can continue in a virtual environment. In many cases, remote work may become a permanent fixture of the new normal in a long-term, nationwide transformation. A recent survey by the Metropolitan Washington Council of Governments’ Transportation Planning Board found that 91% of D.C.-area respondents working from home said they wanted to continue working from home part-time after the pandemic subsides.54

Such order-of-magnitude changes will be essential if the United States is to meet the ambitious climate goals set by the Biden administration. Meaningful progress on this agenda will require federal agencies to overturn existing orthodoxies, which separate climate initiatives from the central mission in all but a handful of climate-focussed entities.55

One agency that has successfully linked environmental considerations to its core mission is the DoD, the world’s largest consumer of fossil fuels.56 “Napoleon said that an army runs on its stomach,” said one informed observer in 2014; “the army of today runs on oil.”57 But the DoD recognises that fossil fuels not only harm the environment but can hinder operations and put lives at risk. Oil convoys that deliver fuel to US bases are an easy target for adversaries. In Afghanistan, for example, one army soldier or civilian was killed or wounded for every 24 fuel resupply convoys.58 A successful attack could leave a base without power.

To reduce this vulnerability, DoD has begun to deploy alternative power sources such as mobile solar-power units that can be carried in the field. Such alternatives make operations more sustainable and more resilient in the face of enemy attacks and extreme weather events.59

These examples—telecommuting and portable solar power—illustrate the potential power of subverting traditional orthodoxies.60 If sustainability gains are sought only within the frame of how things have “always” been done, significant breakthroughs can be missed. But it’s not easy to change from “the way we’ve always done things.” Bold goals are one way to try to stretch people’s thinking, but it can also be useful to challenge that thinking in the details. The latest carbon footprint tools, for example, can provide a richly informed look at how various activities affect an organisation’s carbon footprint. Such tools can direct attention to where it matters and allow for AI-assisted modelling of potential future states. This “what if” capability fosters creative problem-solving.61

If sustainability gains are sought only within the frame of how things have “always” been done, significant breakthroughs can be missed.

Lesson 6: Focus on equity as a principle, not a byproduct

Drive through just about any city in America and you’ll see physical manifestations of the law of unintended consequences. Interstate highways split once-thriving communities. Factories and landfills cluster near disadvantaged communities, harming the health of nearby residents.

What’s missing is just as striking as what’s visible: Green space to provide recreational opportunities. Ample permeable ground to prevent flooding and runoff. Sidewalks, transit and other mobility options to connect residents with economic opportunity.

Environmental hazards in disadvantaged communities are the natural byproduct of a series of decisions made over decades that, in turn, become a self-fulfilling prophecy. Why wouldn’t you site a waste facility in an already-blighted neighbourhood? Where else would it go?

Even well-meaning climate initiatives can have unintended negative consequences for marginalised communities. Consider California’s cap-and-trade programme. Launched as a flexible regulation that gave organisations a choice between cutting their greenhouse gas emissions or offsetting emissions elsewhere by purchasing credits, the programme successfully reduced the state’s overall carbon footprint. That outcome, however, did little to address greenhouse gas production and related particulate emissions in minority neighbourhoods, where production continued to increase. Instead of lowering their emissions, these factories simply chose to purchase carbon credits, more than three-fourths of which were generated out of state, most often through forestry.62 This produced a global net benefit but did nothing to address local inequities.

The accumulation of unintended effects may be gradual, but over decades, it’s effect can be profound. Climate change is only making the problem worse. Climate change affects all of us, but it affects poor and minority groups disproportionately. Studies have shown that ecological and economic disasters induced by climate change have a bigger impact on poor and minority communities that have fewer resources to cope with the consequences.63

Recognising this fact, the Biden administration has created a governmentwide Justice40 Initiative that aims to deliver 40% of the overall benefits from relevant federal climate investments to disadvantaged communities.64 As agencies move forward with plans to combat climate change, they should consider all their actions through the lens of environmental justice. This means evaluating not just environmental impacts, but also social, health and economic outcomes over time.

To get a sense of what this would look like, one can look to the actions health agencies take to incorporate the social determinants of health in their work. Health is not determined solely by health services; it’s shaped profoundly by the economy, education, public safety and environmental factors such as infrastructure, food and the physical environment.65 To build a holistic perspective on health, the US Department of Health and Human Services has launched Healthy People 2030, a data-driven effort to improve health that includes, for example, four baseline objectives related to environmental health.66

A similarly data-rich and transparent approach should be used to address climate equity. To weave it into agency actions, decision-makers should involve stakeholders as they decide on new criteria to drive decisions, and on the data and tools they will track and employ. They need local knowledge and insights relevant to affected communities.

National tools such as EPA’s environmental justice screening and mapping tool (EJSCREEN) can help align environmental justice with climate change goals. But agencies should still establish environmental justice indicators tailored to the local context of each decision or investment they make. These indicators could include unique local priorities, goals, interests, concerns, risks and benefits for underserved or disadvantaged groups as well as the community at large. In the next two years, more than 140 California cities and counties plan to update their long-term plans to include environmental justice.67

Agencies should also consider the impact of their initiatives on other agencies and programmes. As they establish programmes, they should share their projected investments and benefits so that planning for other programmes can take them into account. A single initiative may struggle to quantify and achieve equity goals on its own, but the collective impact of many initiatives may have a sustained impact that addresses both equity and climate goals.

Broadening the view of climate action

Historically, government leaders have looked at climate change in terms of mitigation and adaptation. While these are important fundamental concepts, they aren’t necessarily effective prompts for action. Figure 5 illustrates five distinctive lenses—five ways of looking at action on climate change—that can assist leaders in identifying opportunities for action.

Each focusses on an important area of potential climate action. But, as noted elsewhere in this article, much of the benefit comes when separate actions reinforce one another; hence the depiction of a set of overlapping lenses. These five lenses can spur a creative and comprehensive review of the activities an agency might undertake to address climate change effectively.

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Lesson 7: Leverage your “ecosystem” to fix the ecosystem

Governments often respond to problems by “dividing and conquering”; for climate change, DoE looks at how to reduce carbon outputs, NOAA measures changes in weather patterns, the head of buildings at the State Department seeks to reduce the agency’s carbon footprint, and so forth. But climate change poses challenges that are much too big for any single agency to tackle on its own. To get results, coordinated joint action across agencies is required. This coordination will help minimise the risk of work at cross purposes and ensure that each agency’s actions complement and reinforce those taken by other parts of government.

Of course, federal agencies aren’t the only stakeholders concerned about climate change. State, local and international governments, companies, academia, think tanks and private citizens all have important roles to play. By building interdependent and collaborative public-private ecosystems, agencies can unlock vast stores of shared knowledge and resources while ensuring that the broader community supports their actions.

An integrated approach to achieve net-zero emissions by 2050

One challenge will be for government agencies to figure out where it makes sense for them to lead on climate change, and where they might make a bigger impact in a supporting role to the private sector. For example, NOAA is partnering with Google to see how AI and machine learning might enhance its ability to predict the weather.68 Such partnerships can provide access to powerful tools and technologies that amplify government resources. Another consideration is data transparency. As government agencies identify new partnerships and engage with stakeholders, measurement will be important for tracking progress toward both climate change and equity.

Ultimately, government agencies must decide which of the roles depicted in figure 6 they should play in each action to advance the climate agenda within their scope of influence.

One challenge will be for government agencies to determine where to lead on climate change, and where to play a supporting role to the private sector.

• Integrators build and sustain the ecosystem by creating processes and platforms that allow multiple participants to collaborate effectively.

• Problem solvers develop actual solutions to specific challenges.

• Enablers make the innovation process easier by providing critical resources such as skills training, data and funding to other members of the ecosystem.

• Motivators create incentives to spur innovation, including tax credits, public recognition, grants and supportive infrastructure.

• Conveners assemble diverse sets of partners to collaborate via conferences, taskforces, hackathons, crowdsourcing and other tools.69

The five roles are by no means mutually exclusive. In many cases, agencies may choose to fill multiple roles simultaneously. (To learn more about the five roles, see Catalysing public sector innovation: Defining your role in the innovation ecosystem.)

Looking ahead

To address the challenge of climate change, leaders across all parts of government must consider and embrace new approaches. The lessons in this article can provide a starting point for powerful and integrated action. Acting on these lessons will require sustained and broad-based action, as befits a situation that requires major breakthroughs. No agency can do it alone. The public sector can’t do it alone. No one nation can do it alone. All the ecosystem players have to be willing to work together. Each will undoubtedly question whether the others will make the efforts and dedicate the resources needed for the long haul. In short, can they trust each other?

Trust is earned over time, of course. But the lessons presented here should help to foster trust. They accept the challenge in managing the complexity and the potential—even the need—for disruption. They recognise, manage, and reduce risks while embracing equity and interdependence. Perhaps most encouragingly, following these lessons can weave a focus on climate into the very fabric of each agency’s mission and operations. That focus on climate at all levels, every day, will provide the greatest foundation for long-term trust. If they execute their plans well, agencies can build a self-sustaining focus on climate—and a more sustainable planet.

Government & Public Services

Deloitte’s GPS Climate Action team helps public sector clients navigate and solve the challenges presented by climate, to facilitate mitigation and adaptation, and to plan effectively for the future. To help our clients meet this challenge, Deloitte offers an experienced team of climate professionals, analysts and industry and financial specialists who understand both the public and private sectors and how to navigate the complexities of the climate space. Using our Climate Framework, Deloitte empowers clients across five integrated lenses to identify and assess challenges, gaps and opportunities within and across organisational missions.

Learn more

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A number of Deloitte colleagues generously contributed their time and insights to this report, including Gary RahlKathleen O'DellDavid SpiraHoai HuynhJamie SawchukScott CorwinDerek PankratzKate HardinSuzanna SanbornKristen SullivanCarmen WadePetros KusmuSJ MaxtedChloe HartwellSarah MilsomSally D'AmatoRuthie FetscherAlan FalkCatherine FoleyMahesh Kelkar, and William Eggers.

The authors would also like to thank Akash Keyal and Thirumalai Kannan for their research contributions.

Cover image by: Adamya Manshiva

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