Is lack of data a climate cop out?

Digest #39

As the 27th climate conference in Egypt wraps up and negotiators board flights home, global attention is focused on the event’s failure to increase the ambition of Nationally Determined Contributions, agreement to create a fund for loss and damage payments to poor countries,  and next year’s global stocktake. Data is central to all of these. Without it, we can’t assess progress or make informed decisions. 

Yet the state of climate data is way behind where it should be. Climate data is often patchy, unreliable, or outdated. Where data exists, limitations related to capacity, technology, and missing standards prevent data being brought together effectively for analysis.

The “dearth” of climate data is often cited as a primary reason for inaction. For example, a recent survey of leading UK banks and insurers found that insufficient data was seen as the foremost challenge in addressing climate risk over the next five years. So why is climate data so paltry? The political economy of data—who has an interest in its production and use and how funding flows (or doesn’t flow) to data systems—can offer useful insights.

Everyone wants better data, but no one wants to pay for it.

Governments are not keeping up with the data demands of the Sustainable Development Goals (SDGs) and the Paris Agreement. A 2020 survey conducted by the United Nations (UN) and the World Bank found that only one in six countries had sufficient data to report on Climate Action (SDG 13) and that the most recent data available in most cases was from 2015. The lack of national-level data makes producing global estimates extremely difficult. At present, we only have global estimates for 55 of the 90 environmental indicators across the SDG framework.

Now, as part of the Enhanced Transparency Framework (ETF), all countries that have ratified the Paris Agreement will follow a single, universal reporting process. The information gathered under the ETF is expected to provide a clear understanding of climate change actions and support, and ultimately contribute to the global stocktake that will assess progress on implementation of the Paris Agreement. But, for many low- and middle-income countries with limited reporting capacity, the ETF poses significant challenges. It risks being another promising mechanism that countries can’t live up to. 

Greater transparency is critical to hold countries accountable for their climate commitments. But, more stringent reporting demands more capacity where countries are already struggling, and increasing capacity requires additional resources. 

Countries rarely prioritize forward-looking investments in data systems. While data investments provide the essential foundations for all other activities, they don’t often deliver immediate results. With cascading crises and multiple pressures on governments in low-income countries, it’s extremely difficult to make the case for sustained investments in data systems to national parliaments. 

Likewise, donors rarely prioritize data investments. Funding for data and statistics has stagnated in the last 10 years at a paltry 0.3 percent of Official Development Assistance (ODA). Strengthening data systems and building data capacity takes time and is not conducive to donors’ short planning and project cycles. In the case of major climate investments and climate finance facilities, investing in data to assess risk, generate predictive analysis, and monitor progress is generally an afterthought.

Notwithstanding the challenges of securing funding for data systems, evidence shows these investments generate strong returns. A recent study by Dalberg Development Advisors found that every dollar invested in data systems generates $32 of economic benefits on average. Building on these returns, other ways to improve incentives for data financing include new financing mechanisms like the World Bank’s Global Data Facility, which will pool resources to drive more coherent data investments and leverage larger lending programs. 

Another way of shifting incentives is to consider data’s return on investment across sectors like environment and climate. If investing in data systems on their own is a tough sell, then perhaps the key is to see data as a strategic asset in the fight against climate change and to fund it as a small but integral part of climate mitigation and adaptation investments. 

Or, perhaps, not everyone actually wants better data.

Where capacity is thin (and often where it’s not), there are many reasons governments may not report fully, accurately, or on time. Keeping a lid on unsustainable practices may enable governments to maintain low-cost production processes for longer or even serve patronage systems that benefit the ruling elite. With increasing pressure to compensate low-income countries for loss and damage, rich countries may prefer to obscure the picture of what they owe. For example, in the final hours of negotiations on the loss and damage fund last week, oil-producing countries succeeded in watering down language on phasing down all fossil fuels to name only coal. 

Nonetheless, there is a long tradition in global development of marshaling government commitments to time bound measurable goals and holding them accountable for progress. Starting with the Millennium Development Goals, the SDGs and Paris Agreement targets are designed to do just that. In contrast, there is much less precedent for compelling companies to produce high-quality, timely, and comparable data on their contributions to climate change.

While just 100 companies in the world are responsible for 71 percent of global emissions, only 10 percent of companies worldwide measured their greenhouse gas emissions comprehensively in 2022, allowing the rest to obscure their contributions to this global crisis. 

Those that do monitor and report on the climate impacts of operations often do so through their own stand-alone systems or indicators. Without consistent standards, it's not a surprise that these ESG disclosures are hard to draw into national climate reporting mechanisms. By steering clear of sharing data in a common system, many companies avoid direct comparability with competitors and reduce the chances that sensitive commercial information will end up in the wrong hands.  

Governments have an important role to play in setting the frameworks to incentivize comprehensive and standardized reporting through carrots, such as tax incentives, and sticks, such as regulation and enforcement. Global reporting mechanisms can also drive increased reporting and foster a race-to-the-top by rewarding corporate leadership.

The World Benchmarking Alliance (WBA) has set out to shift companies’ incentives in favor of robust measurement of their sustainability impacts by developing benchmarks that compare companies’ performance on the SDGs and the Paris Agreement. The WBA’s theory of change is that, by establishing common benchmarks, measuring companies’ performance, and ranking them against their peers, investors, governments, and civil society will pressure companies to change their practices and motivate companies to act.

In a similar vein, the Net Zero Data Public Utility (NZDPU), announced at COP27, will fill data gaps and encourage data sharing across sectors to assess whether companies are delivering on their climate commitments. It aims to “provide accurate, trusted and verifiable climate transition-related data, openly available in a single place for the first time.” Like the World Benchmarking Alliance, the NZDPU depends on the positive pressure that making data available to investors, governments, and civil society will have on corporate emitters.

Bad data is a bad excuse.

The sorry state of climate data is not an accident. Like all governmental systems, the capacity required to regularly, reliably, and comprehensively measure climate change will never develop without sustained investment. Even when such investments or capacity exist, incentives for public and private sector players to report comprehensive climate data are not always aligned. 

We’ve come too far to continue using lack of data as an excuse for inaction. We know what the problems are, and that they are solvable—if we can get the politics, funding, and incentives right. Many initiatives are underway to address climate data challenges in both the public and private sectors. They won’t fix all our data problems overnight, but we must continue to advocate for and build on them. The climate crisis can’t wait.