Climate action could add $26 trillion to world economy: study

September 5, 2018
There's still a chance to reap big financial gains from the fight against climate change

Ambitious action on climate change could contribute an extra $26 trillion to the world economy by 2030, international experts said on Wednesday, urging nations and businesses to step up their engagement.

The economic benefits offered by a shift to a low-carbon economy have been "grossly" underestimated, according to the Global Commission on the Economy and Climate, a think tank grouping former heads of government and top economic and business leaders.

"Bold action could yield a direct economic gain of $26 trillion through to 2030 compared with business-as-usual. And this is likely to be a conservative estimate," the commission's annual report found.

Dynamic action on climate could also generate "over 65 million new low-carbon jobs" by 2030 and avoid over 700,000 premature deaths due to air pollution, it said.

But policymakers were "not taking sufficiently bold action to escape the legacy economic systems," the study found, warning that the window for change was narrow.

"We are at a unique 'use it or lose it' moment. Policymakers should take their foot off the brakes and send a clear signal that the new growth is here," said the commission's co-chair Ngozi Okonjo-Iweala, Nigeria's former finance minister.

"There are real benefits to be seen in terms of new jobs, economic savings, competitiveness and market opportunities, and improved wellbeing for people worldwide."

Such growth would be driven by the interaction between rapid technological innovation, increased resource productivity and investment in sustainable infrastructure, which is expected to reach $90 trillion by 2030, it said.

Bold action needed

The shift would involve change in five key areas: the development of clean energy systems, improved urban planning, a shift towards more sustainable agriculture, smart water management and decarbonising industry.

"Seizing the of low-carbon and resilient growth will only be possible if we act boldly over the next two to three years," it said, flagging it as a "critical window" when many of policy and investment decisions will be taken which will shape the coming decade and beyond.

Urging economic decision-makers to move beyond generic proposals or statements, it called on governments to put a price on carbon of at least $40-80 by 2020, and to move towards mandatory climate risk disclosure for major investors and companies.

It also pushed for a much greater emphasis on investment in sustainable infrastructure, with better-designed cities, buildings, transport, energy and water systems as well as investment in forests and wetlands that purify water and offer valuable flood control.

To this end, development bodies and banks should double their collective in infrastructure, aiming to invest at least $100 billion per year by 2020, it said.

Explore further: Three reasons companies are being proactive about climate change

Related Stories

Study urges 15-year plan for low-carbon growth

September 16, 2014

The world can save both financial and environmental costs by shifting toward a low-carbon economy over the next 15 years, a high-level panel said Tuesday ahead of a UN summit.

ADB says Asia needs to double infrastructure spending

February 28, 2017

Developing countries in Asia and the Pacific will need to spend up to $1.7 trillion a year, or $26 trillion through 2030, to meet their infrastructure needs and to maintain the region's growth momentum, the Asian Development ...

Recommended for you

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.