Friday, September 7, 2018

Bold Climate Action Could Deliver US$26 Trillion to 2030, Finds Global Commission

A ... 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 US$26 trillion in economic benefits through to 2030, compared with business-as-usual.

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.
Unlocking the Inclusive Growth Story of the 21st Century is being presented to the United Nations Secretary-General António Guterres ... 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 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. 
  • Generate, through just subsidy reform and carbon pricing, an estimated US$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 cliamte-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. 


[Other highlights include:

Smarter urban development: More compact, connected, and coordinated cities are worth up to US$17 trillion in economic savings by 2050[1] 2 and will stimulate economic growth by improving access to jobs and housing. They can strengthen resilience to physical climate risks and could deliver up to 3.7 gigatons per year of CO2e savings over the next 15 years, just shy of the total emissions of the European Union (EU) today.
Sustainable land use: The shift to more sustainable forms of agriculture combined with strong forest protection could deliver over US$2 trillion per year of economic benefits; generate millions of jobs, mainly in the developing world; improve food security including by reducing food loss and waste (a third of all food produced is lost or wasted along the food chain); and deliver over a third of the climate change solution.7 At the same time, restoration of natural capital, especially our forests, degraded lands, and coastal zones, will strengthen our defences and boost adaptation to climate impacts, from more extreme weather patterns to sea-level rise.
Wise water management: Today, 2.1 billion live without readily available, safe water supplies at home, and 4.5 billion live without safely managed sanitation.8 Water will also be where climate change impacts will be felt most keenly. Water scarce regions, notably the Middle East, the Sahel, Central Africa, and East Asia could see gross domestic product (GDP) declines of as much as 6% by 2050 as a result of climate change, spurring migration and sparking conflict.9 There are enormous opportunities to curb these impacts by using water better, whether though deployment of improved technology (from drip irrigation to remote sensors to water-efficient crops), planning and governance, use of water prices with targeted support to the poor, or by investing in public infrastructure. Today, poorly managed and often under-priced water results in the over-use and misallocation of resources across the economy. Addressing the water-energy-food nexus will be critical, particularly in increasingly water-stressed regions.
A circular industrial economy: From 1970 to 2010, annual global extraction of materials grew from almost 22 to 70 billion tonnes.10 Each year, at least eight million tonnes of plastics leak into the ocean, contributing to a major new challenge for the 21st Century.11 Microplastics have been discovered in 114 aquatic species, many of which end up in our dinners.12 This challenge, however, is not just a social or environmental issue; it is also economic. Today, 95% of plastic packaging material value—as much as US$120 billion annually—is lost after first use.13 Policies which encourage more circular, efficient use of materials (especially metals, petrochemicals and construction materials) could enhance global economic activity, as well as reduce waste and pollution. Shifting to a circular industrial economy, combined with increasing efficiency and electrification, including for hard-to-abate sectors and heavy transport, could decouple economic growth from material use and drive decarbonisation of industrial activities.
Jobs: The Report also finds that taking ambitious climate action could generate over 65 million new low-carbon jobs in 2030, equivalent to today’s entire workforces of the UK and Egypt combined, as well as avoid over 700,000 premature deaths from air pollution compared with business-as-usual.
Subsidy reform and carbon pricing alone could generate an estimated US$2.8 trillion in government revenues per year in 2030 – more than the total GDP of India today – much needed funds that can be used to invest in public priorities.

In addition, outdoor air pollution, largely from fossil fuel combustion, is estimated to result in over 4.2 million premature deaths annually. The costs of congestion are growing, with recent International Monetary Fund (IMF) estimates suggesting a cost of over US$350 billion per year, based on lost productivity and health impacts. It is estimated to cost as much as 5% or more of GDP in Beijing, Sao Paulo, and Bangkok.  The difference among countries is pronounced: For every 1% increase in urbanpopulation, for example, per capita GDP increases by 10% in China, 4% in Indonesia, and 13% in India.  Auctions for long-term power contracts are generating unsubsidised bids from renewable energy producers at prices under US$3 cents per kilowatt hour, out-competing fossil fuel alternatives in more and more locations. Companies shifting to hydrofluorocarbon (HFC)-free refrigerants in line with the Montreal Protocol have reported energy-efficiency improvements of up to 40%, as well as electricity cost savings and emissions reductions....

Additional Quotes from Global Commissioners:

Sharan Burrow, General Secretary, International Trade Union Confederation: “Decisive climate action can create 65 million new jobs by 2030.

Kristalina Georgieva, CEO, World Bank: “Climate change presents us with a clear choice. We must take the bold action this report recommends and urgently transition to a low-carbon global economy, a path that creates over 65 million new jobs and allows people to breathe clean air and live healthy, productive lives. The alternative is business-as-usual that will destroy economies, jobs and lives, especially in developing countries. The World Bank Group is supporting countries to make the smart choice and invest in resilience and low-carbon transformation.”
Caio Koch-Weser, Chair, European Climate Foundation: “The climate story is fundamentally an economic one. If we act boldly now, we will see higher productivity, greater social inclusion and more resilient economies. Finance Ministers particularly should pay close attention to the main message of this Report: climate action is the growth story of the 21st century.”
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. ‘Implementing Better Growth at Speed and Scale’ is the fourth major report of the Global Commission. It was prepared by teams from the following institutions: SYSTEMIQ, the Energy Transitions Commission, the Coalition for Urban Transitions, the Food and Land Use Coalition, the Overseas Development Institute, the Brookings Institution and World Resources Institute (Managing Partner).

For more information go to

Press Release dated September 5, 2018
New Climate Economy

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