Greener growth could add $26 trn to world economy by 2030: report
06 Sep 2018
Concerted action supporting greener growth and policies to combat climate change could make the world richer by at least $26 trillion by 2030, according to a study released on Wednesday.
A major report released by the Global Commission on the Economy and Climate finds that we are significantly under-estimating the benefits of cleaner, climate-smart growth. Bold climate action could deliver at least $26 trillion in economic benefits through to 2030, compared with business-as-usual.
The findings are in stark contrast with claims made by entrenched interests that a shift away from fossil fuels will undermine growth.
Chances are that disruptive growth will undermine the fossil fuel industry and a whole lot of industries attuned to the fossil fuel industry. The combustion engine that currently drives automobiles would be the first calamity in a wholesale shift to renewable fuels, mainly electricity.
The report finds that over the last decade there has been tremendous technological and market progress driving the shift to a new climate economy. There are real benefits to be seen in terms of new jobs, economic savings, competitiveness and market opportunities, and improved wellbeing for people worldwide. Momentum is building behind this shift by a wide range of cities, governments, businesses, investors and others around the world, but it is not yet fast enough, says the report.
“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 - $26 trillion and a more sustainable planet are on offer, if we act decisively now.”
Unlocking the Inclusive Growth Story of the 21st Century was presented to the United Nations Secretary-General António Guterres on Wednesday at a global launch at UN headquarters in New York City. The report arrives just one week before the Global Climate Action Summit in San Francisco.
“The momentum from businesses, states, cities, investors and citizens is now unstoppable, not least because those taking bold climate action are already seeing tangible benefits,” said Paul Polman, CEO, Unilever and co-chair of the Global Commission. “But if we are to unlock the full benefits of this new low carbon growth opportunity and avoid runaway climate change, economic and financial leaders in both government and the private sector need to do even more, and fast.”
The Report highlights opportunities in five key economic systems – energy, cities, food and land use, water, and industry. It demonstrates that ambitious action across these systems could deliver net economic gains compared with business-as-usual and:
- 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; and
- Generate, through just subsidy reform and carbon pricing, an estimated $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. 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,” said Lord Nicholas Stern, I G Patel Professor of Economics and Government at the LSE and co-chair of the Global Commission. “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 Global Commission calls on governments, business, and finance leaders to urgently prioritise actions on four fronts over the next 2-3 years:
- 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; and
- Build a people-centred 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.”
“This is more than just a report. It is a manifesto for how we can turn better growth and a better climate into reality. It is time we decisively legislate, innovate, govern, and invest our way to a fairer, safer, more sustainable world,” said former President of Mexico, Felipe Calderon, honorary chair of the Commission.
The Global Commission on the Economy and Climate, and its flagship project the New Climate Economy, were set up to help governments, businesses and society make better-informed decisions on how to achieve economic prosperity and development while also addressing climate change.