Climate change is having widespread and devastating impacts on the environment worldwide, from hotter temperatures to increasing severe weather events, global hunger, and species extinction. Over the past 100 years, temperatures have risen approximately 1.8 degrees Fahrenheit (2023 was the hottest year on record), sea levels have risen six to eight inches, and the wildlife population has decreased by 73 percent.Â
Climate change impacts businesses through physical risks from damage caused by environmental threats and transition risks related to new climate change policies, laws, and regulations. Forecasts indicate that, by 2050, climate change could cost $38 trillion annually in damages and disrupt businesses through energy volatility, infrastructure damage, and agriculture disruptions.Â
These environmental and business impacts necessitate strategies to address climate change globally. To this end, world leaders at the 2015 UN Climate Change Conference in Paris agreed to a coordinated effort to combat climate change and achieve the target of net zero emissions by 2050; as of June 2024, 107 countries have embraced net zero pledges. Non-state actors, including regions, cities, and organizations, have also signed up to do their part through Race to Zero.Â
This article explores key focus areas in climate policy, how experts come together to drive change, and how you can become a climate-conscious leader making a difference in the world.
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Key Areas of Focus in Climate Policy
Climate Change
Climate change “presents a fundamental threat to human health… contributing to humanitarian emergencies from heatwaves, wildfires, floods, tropical storms and hurricanes and they are increasing in scale, frequency and intensity,” according to the World Health Organization. The term climate policy refers to coordinated actions that focus on managing and mitigating the effects of climate change as well as addressing the risks it poses to humans and the planet. These policies typically work to reduce and improve climate change while helping people adapt and build resilience. Climate policy encompasses many focus areas, including agriculture, energy, and transportation.Â
But which of these policies work, which don’t, and why? That’s the question behind the Fletcher School’s Climate Policy Lab (CPL) at Tufts University, which conducts research and analysis to drive effective climate-related decisions. Their work is rooted in a desire to support sustainable and resilient climate change solutions that improve the quality of life.Â
Climate policy significantly impacts international business management, encompassing supply chain management, operations, finance, risk assessment, technology, regulatory compliance, and more. Leaders who work in this realm must ensure their businesses adhere to national and international regulations, prepare for and adapt to new risks, and promote sustainability in their practices, all while operating as efficiently as possible to remain competitive. Below, we’ll take a closer look at some key areas of climate policy.
Clean Energy Innovation
Clean energy—energy from sources that don’t emit harmful greenhouse gases into the environment—is essential for improving air quality and creating a reliable and sustainable power supply. Examples of clean energy include solar, which converts light from the sun into electricity; wind, which uses wind turbines to convert wind into electricity; water, which generates energy through its movement; and geothermal, which utilizes heat energy generated from the earth.
Clean energy technologies can take a long time to develop and require a significant investment. Additionally, investors perceive new clean energy firms as riskier than technology startups; these firms face a higher likelihood of failure. Policy plays a crucial role in promoting and improving clean energy innovation by providing support to mitigate some of these risks. Governments have expanded policy measures to include things like R&D grants, tax incentives, business equity, loans, access to laboratories, and cross-border cooperation to foster clean energy innovation.
Low Carbon Growth
Low carbon growth promotes economic development by reducing carbon emissions, pollution, and resource use, ultimately fostering growth that protects the environment. It plays a vital role in achieving “net zero” by cutting carbon emissions and adopting more sustainable practices.Â
Although many countries have agreed to the net zero emissions target, the world is not on track to reach the goal by 2050. Still, many governments worldwide have made tangible progress by successfully implementing low carbon growth policies. Since enacting a mandatory green building code in 2015 and instituting subsequent green initiatives, Colombia has become a leader in sustainable building, with 27 percent of new buildings receiving EDGE certification in 2022. In the Sahel region of Africa, farmers have adopted traditional practices to preserve soil, increase crop yields, and add tree cover. In 2008, British Columbia instilled a carbon tax on fossil fuels used for transportation, heating, and electricity, covering 70 percent of emissions without increasing the overall tax burden. Evidence shows that most people support the tax, which reduces emissions and inequality while boosting growth and employment.Â
Climate Finance
Climate finance involves funding and resources to combat or adapt to climate change. Climate finance policies include green banks, mission-driven financial organizations that use creative financing to support the transition to clean energy technologies and address climate change; green bonds, fixed-income investments designed to fund projects that benefit the environment; and weather-index insurance, which offers payouts determined by specific weather conditions, like rainfall, instead of evaluating actual damages on-site. Climate finance is essential for reducing emissions and adapting to climate change, especially for vulnerable communities.Â
A crucial element of climate change policy is securing sufficient funding for climate action. A record-setting $1.2 trillion in climate funding in 2021-2022 represents a good start, but climate financing must increase to $8.5 trillion by 2030 to limit global warming to 1.5°C above preindustrial levels.
Resilient Development
Resilient development focuses on prioritizing sustainability, protecting people and the environment, and creating infrastructure, systems, and policies adaptable to changing conditions. Over the past decade, extreme weather events related to climate change have resulted in global economic losses of over $2 trillion. These events have an especially devastating impact on developing countries.Â
Climate-resilient development policies help communities prepare for and withstand climate change impacts. The government of Timor-Leste is addressing climate-resilient development by building new infrastructure that can endure weather events such as flooding and landslides. With support from the United Nations Development Programme, the Georgian government is in the midst of a comprehensive project protecting 40Â percent of the country’s population from hydrometeorological hazards. Similarly, the Tongan government is preparing for a seven-year project to enhance the resilience of vulnerable coastal communities by focusing on infrastructure, climate risk-informed adaptation planning, and long-term adaptation solutions.
Sustainable Agriculture
Sustainable agriculture involves farming practices that safeguard the environment, conserve and increase natural resources, and promote healthy soil. Examples of sustainable agriculture practices include crop rotation and diversification, where different crops are planted in the same area to maintain soil health, reduce pests, and improve crop yields; improving ecosystems in rural areas to transform communities and promote sustainability; and introducing farmers to new practices that foster sustainability.Â
Smallholder farms, which number more than 500 million worldwide and represent a large portion of vulnerable rural communities, produce about one-third of the world’s food. Creating resilient food systems and farming practices is essential for global food security and supporting a more sustainable environment for smallholder farms and their communities. Â
An International Climate Conference: Coming Together as an Industry
Addressing climate change and its impact on international business management requires the support and participation of leaders, academic researchers, and industry experts. These parties come together at events like the annual United Nations Climate Change Conference of the Parties (COP), where attendees—including leaders, scientists, Indigenous Peoples, and young people—gather to discuss the climate crisis. During these events, stakeholders from various locations and sectors collaborate to discuss climate change and find solutions to reduce carbon emissions, promote sustainability, and adapt to climate change. These meetings are crucial for developing policies and strategies that help us approach net zero emissions while supporting economic growth.
The 2024 conference, COP29, was held in Baku, Azerbaijan, in November 2024. Faculty members and students from Tufts attended the conference, connecting and learning from leaders across all disciplines. The Climate Policy Lab cohosted a booth and featured several COP29 delegation members who spoke at the conference. Travis Franck discussed climate policy modeling and NDC updating opportunities, while Jenna Clark and Sophie Lehrenbaum spoke about energy cooperation between the United States, the Republic of Korea, and Japan.Â
Throughout the conference, Tufts CPL members gained valuable insights. Ana Paola De La Vega Núñez realized that “Those of us in the academic sector have a lot of work ahead of us to help answer the many questions around how to make climate action and climate finance just,” while Ingrid Elena Manson González discovered “the importance of connecting with other students, organizations and institutions. United, our efforts can have a much greater impact.”
Become a Climate-Conscious Leader: Advance Your International Business Management Career with a Tufts GBA
With the effects of climate change significantly impacting our world, the demand for international business management professionals attuned to global climate issues increases. If you hope to impact climate change and make a difference in the world, the Fletcher School’s online GBA provides the ideal place to get started. The GBA offers a dynamic curriculum that combines globally focused courses, an international immersion, career coaching, a vast alumni network, and a direct line to Digital Planet, an interdisciplinary research initiative of The Fletcher School’s Institute for Business in the Global Context. The program prepares graduates to adapt and thrive in the global economy.Â
Next Steps: Apply to the Tufts GBA
With climate change accelerating, the need for climate-conscious business leaders who can drive sustainability has never been more urgent. Apply today to start your journey to sustainable leadership, or connect with our admissions team to learn more about the Tufts online GBA.