Yes! A new report from the Global Commission on the Economy and Climate Change finds that we no longer have to choose between economic growth and a better climate: we can have both.
The findings of Better Growth, Better Climate: The New Climate Economy report, released on 15 September, are welcome news for governments and businesses aiming for economic prosperity as well as combatting climate change. One need not come at the expense of the other.
The Global Commission on the Economy and Climate Change (the Commission) and its flagship project The New Climate Economy have been set up to help governments, businesses and society make more well-informed choices on the critical issues of economic growth and climate change.
Rapid technological innovation, new investment and infrastructure are making it possible to tackle climate change, while improving economic performance at the same time. What is needed is strong political leadership and credible, consistent politics.
The report comes shortly before the UN-convened summit on climate change starting on 23 September in New York, where world leaders will hear economists and political leaders argue that we must transform the global economy within the next 15 years.
“The report sends a clear message to government and private sector leaders, and outlines compelling evidence on how technological change is driving new opportunities to improve growth, create jobs, boost company profits and spur economic development,” says Felipe Calderon, Chair of the Global Commission on the Economy and Climate.
The report finds that over the next 15 years, US $9 trillion will be invested in infrastructure in the world’s cities, agriculture and energy systems, which means there is unprecedented opportunity to drive investment in low-carbon growth. This will bring multiple benefits including more jobs, improved health, business productivity and quality of life.
Lord Stern, co-author of the report and one of the most influential voices on climate economics, says that “reducing emissions is not only compatible with economic growth and development – if done well it can actually generate better growth than the old high-carbon model.”
The report finds that there are major opportunities to achieve strong growth with lower emissions in three sectors of the global economy: cities, land use and energy.
To achieve this growth, governments and businesses need to improve resource efficiency, invest in good-quality infrastructure, and stimulate technological and business innovation.
- Cities: Building better connected, more compact cities based on mass public transport can save over US $3 trillion in investment costs over the next 15 years. These measures will improve economic performance and quality of life with lower emissions.
- Land use: Restoring 12% of the world’s degraded lands could feed another 200 million people and raise farmers’ incomes by $40 billion a year – and also cut emissions from deforestation.
- Energy: As the price of solar and wind power falls dramatically, over half of new electricity generation over the next 15 years is likely to be from renewable energy, reducing dependence on highly polluting coal.
- Resource efficiency: Phasing out the $600 billion currently spent on subsidies for fossil fuels (compared to $100 billion on renewable energy) will help to improve energy efficiency and make funds available for poverty reduction.
- Infrastructure investment: New financial instruments can cut capital costs for clean energy by up to 20%.
- Innovation: Tripling research and development in low-carbon technologies to at least 0.1% of GDP can drive a new wave of innovation for growth.
To achieve these results, we need competitive markets and consistent government policy signals, which are essential for businesses and investors to create low-carbon jobs and growth. By establishing a strong carbon price and a level playing field through an international climate agreement, governments can unlock new investment and innovation.
“Major companies, smart investors and a new generation of entrepreneurs are already demonstrating how markets can drive low-carbon growth,” said Jeremy Oppenheim, Global Programme Director of the New Climate Economy project.
“But inconsistent policy in many countries is now creating uncertainty, hurting investment and job creation. Businesses and investors need clearer market signals,” he says.
The report details a 10 point Global Action Plan of practical recommendations that can achieve greater prosperity and a safer climate at the same time.
The Global Action Plan involves strategic economic decision making:
- Accelerate a low-carbon transformation by integrating climate action and risk into strategic economic decision making.
- Create the confidence needed for global investment and climate action by entering into a strong, lasting and equitable international climate agreement.
- Phase out subsidies for fossil fuels and agricultural inputs and incentives for urban sprawl.
- Introduce strong, predictable carbon prices as part of good fiscal reform.
- Substantially reduce the cost of low-carbon infrastructure investment.
- Scale up innovation in key low-carbon and climate-resilient technologies and remove barriers to entrepreneurship and creativity.
- Make connected and compact cities the preferred form of urban development.
- Halt the deforestation of natural forests by 2030.
- Restore at least 500 million hectares of lost or degraded forests and agricultural land by 2030.
- Accelerate the shift away from polluting coal-fired power generation.
These measures will lead to net benefits to the economy, even before their climate benefits are considered. To read the full report, click here.