Published on September 6th, 2018 | by Joshua S Hill0
“Bold” Climate Action Could Deliver $26 Trillion In Economic Benefits Through 2030
September 6th, 2018 by Joshua S Hill
A new landmark report published by the Global Commission on the Economy and Climate shows that governments and the private sector are “significantly” underestimating the benefits of cleaner and climate-smart growth, and claimed that “bold climate action” could drive at minimum $26 trillion in economic benefits through 2030.
The Global Commission on the Economy and Climate was commissioned in 2013 by the governments of Colombia, Ethiopia, Indonesia, Norway, South Korea, Sweden, and the United Kingdom as an independent initiative and comprises of 28 former heads of government and finance ministers, and leaders in the fields of economics, business and finance. It is currently chaired by Ngozi Okonjo-Iweala, Paul Polman, and Lord Nicholas Stern. The Commission and its flagship project, the New Climate Economy, published the new report — Unlocking the Inclusive Growth Story of the 21st Century — this week, heralding it as an effort to “galvanise action by economic and financial leaders in government and the private sector.”
The report claims that governments and the private sector are currently underestimating the potential economic impact that can be delivered through cleaner and climate-smart growth around the world — benefits that, according to the report, could escalate to at least $26 trillion in economic benefits through to 2030, compared with business-as-usual policies.
“We are at a unique “use it or lose it” moment”, said Ngozi Okonjo-Iweala, former Finance Minister of Nigeria and Co-Chair of the Global Commission. “Policy makers should take their feet off the brakes, send a clear signal that the new growth story is here and that it comes with exciting economic and market opportunities. US$26 trillion and a more sustainable planet are on offer, if we act decisively now.”
The authors of the report claim that “We are on the cusp of a new economic era: one where growth is driven by the interaction between rapid technological innovation, sustainable infrastructure investment, and increased resource productivity. This is the only growth story of the 21st century. It will result in efficient, liveable cities; low-carbon, smart and resilient infrastructure; and the restoration of degraded lands while protecting valuable forests. We can have growth that is strong, sustainable, balanced, and inclusive.”
The report focuses on key highlights presented across five key economic systems — energy, cities, food and land use, water, and industry — and demonstrates that if ambitious action is taken across these five sectors then the net economic gains compared with business-as-usual would be impressive. Specifically, they could:
- Generate over 65 million new low-carbon jobs in 2030, equivalent to today’s entire workforces of the UK and Egypt combined.
- Avoid over 700,000 premature deaths from air pollution in 2030.
- Generate, through just subsidy reform and carbon pricing, an estimated US$2.8 trillion in government revenues per year in 2030 – equivalent to the total GDP of India today – funds that can be used to invest in other public priorities or reduce distorting taxes.
“We can now see that this new growth story embodies very powerful dynamics: innovation, learning-by-doing, and economies of scale,” explained Lord Nicholas Stern, I G Patel Professor of Economics and Government at the LSE and Co-Chair of the Global Commission. “Further, it offers us the very attractive combination of cities where we can move, breathe, and be productive; sustainable infrastructure that is not only clean and efficient, but also withstands increasingly frequent and severe climate extremes; and ecosystems that are more productive, robust, and resilient. Current economic models fail to capture both the powerful dynamics and the very attractive qualities of new technologies and structures. Thus we know we are grossly underestimating the benefits of this new growth story. And further, it becomes ever more clear that the risks of the damage from climate change are immense and tipping points and irreversibilities getting ever closer.”
The report outlines several actions that the Global Commission deems must be urgently prioritized, including:
- Ramp up efforts on carbon pricing and move to mandatory disclosure of climate-related financial risks
- Accelerate investment in sustainable infrastructure
- Harness the power of the private sector and unleash innovation
- Build a people-centered approach that shares the gains equitably and ensures that the transition is just
“The purpose of this Report is to demonstrate how to accelerate the shift to this new growth path”, said Helen Mountford, Programme Director of the New Climate Economy and lead author of the Report. “It lays out the benefits of doing so, the challenges ahead, and the clear accelerators or actions, that can be taken to fully reap the rewards of stronger, cleaner, and more equitable growth.”