Fighting Climate Change Could Add $26 Trillion to Global Economy by 2030
“We are at a unique ‘use it or lose it’ moment.”
For many years, a common narrative has been that investing in clean energy and mitigating climate change would cost jobs and hinder economic growth.
A group of analysts wants to finally put that myth to rest.
The Global Commission on the Economy and Climate released a report Wednesday that shows that the global economy stands to gain $26 trillion if climate change is taken seriously.
“We are at a unique 'use it or lose it' moment,” Ngozi Okonjo-Iweala, former finance minister of Nigeria and co-chair of the Global Commission, said in a statement. “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.”
The report argues that investments in cleaner energy, efficient cities, and sustainable resource management can generate 65 million jobs and prevent 700,000 premature deaths from air pollution by 2030.
The authors also found that an annual $2.8 trillion in government revenue would be generated simply by getting rid of fossil fuel subsidies and enacting carbon pricing measures that take into account the external costs of fossil fuel emissions.
Currently, the world subsidizes fossil fuels at a rate of $5 trillion per year. That includes $333 billion in direct subsidies and a range of externalities such as the more than 7 million people who die from air pollution annually, the countless health consequences of air pollution, and the pollution imposed on agricultural and water sources, and more.
“There’s still a perception that moving toward a low-carbon path would be costly,” Helen Mountford, lead author of the report, told Reuters. “What we are trying to do with this report is once and for all put the nails in the coffin on that idea.”
The authors argue that a fair carbon pricing scheme would be $40 to $80 per ton of carbon emissions by 2020. More than 40 countries currently force companies to pay for carbon emissions.
The Paris climate agreement, which includes the active participation of every country except the United States, calls for a rapid transition to a renewable energy economy to save the planet and protect humans from extreme shifts in climate.
This new report seeks to add to that urgency by adding an economic underpinning.
On the flipside, failing to invest in climate change would cost the global economy an estimated $30 trillion because of extreme weather, rising health care costs, declining productivity, and lowered agricultural output.
The US has already spent $350 billion on harms associated with climate change and that expense is expected to rise to $35 billion annually by 2030.
In the face of these challenges, investing in measures to protect the planet and promote sustainability seems to be the only option that makes economic sense.
“This is more than just a report,” former President of Mexico Felipe Calderon, honorary chair of the Commission, said in a statement. “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.”