Fighting climate change could boost the global economy by $26 trillion
04 September 2018 | Mitigation
Over the next 10 to 15 years, the world will invest $90 trillion in new infrastructure–more than the total current stock that exists today. If those investments are in line with what’s needed to address climate change, a new report says, it could be part of a shift that delivers $26 trillion in economic benefits between now and 2030.
For the climate, it’s a critical window to keep the global temperature from rising more than 2 degrees Celsius. Most of the choices for the new investments in infrastructure will be made in the next two or three years. “If we get that infrastructure right, we’re going to put ourselves on the right path,” says Helen Mountford, lead author of the report from the Global Commission on the Economy and Climate’s New Climate Economy project. “If we get it wrong, we’ll be very much stuck on that wrong pathway.”
The report analyzed the economic impact of ambitious climate action across key systems–cities, energy, food and land use, water, and industry. Quickly ramping up action, they found, would generate more than 65 million new low-carbon jobs in 2030, and avoid 700,000 premature deaths. Reforming fossil fuel subsidies and setting a price on carbon could generate $2.8 trillion in government revenues a year by 2030. In total, “bold action” on climate could net the world $26 trillion in benefits; that’s a conservative estimate.
As the cost of solar and wind power and other renewable tech has dropped, climate-friendly investment is already happening. But the report outlines how much action needs to accelerate to address climate change. “We’re starting to see some real shifts happening, which is very positive, and that’s going in the right direction,” says Mountford. “On the other hand, we need to accelerate this action. We know that if we keep going at this pace, we’re not going to get to where we need to be from a climate perspective.”
Among other things, the world’s largest economies need to put a price on carbon of at least $40-$80 by 2020, and reform subsidies for polluting industries, the report says. Cities need to become more compact and improve transit. The food system needs to end deforestation. Companies need to disclose their financial risks from climate change, and all Fortune 500 companies need to set science-based goals to reduce emissions in line with the Paris agreement. We need to invest at least $50 billion in innovative climate tech outside the energy sector. Development banks need to double their investment in infrastructure and commit to making it sustainable.
All of this needs to happen equitably. “We need to work with local communities, with energy companies, with the workers in those companies, to ensure that we’ve got a just and well-managed transition,” says Mountford.
It’s a tall order, though the shift is beginning. Seventy jurisdictions now have or will soon have carbon pricing in place, representing around 20% of global carbon emissions; a few years ago, only 1% of emissions were covered. Nearly 400 companies plan to disclose their climate-related financial risk. More than 450 companies have set or are setting targets to cut emissions in line with the Paris agreement. More than 100 cities get most of their electricity now from renewable sources; in the U.S., dozens of cities have committed to shift to 100% renewable electricity.
If the changes happen at the scale experts believe is necessary, the benefits would be widespread. “When you look through the report, I think the benefits before us of the opportunities of this new growth path are enormous, and it’s not just environmental,” Mountford says. “It’s economic, it’s fiscal, it’s social opportunities, it’s development opportunities. From that perspective, I’m optimistic.”
Source: Fast Company