A faster energy transition will bring greater economic benefits

Action to significantly ramp up the move away from fossil fuels and towards cleaner sources of energy will boost the global economy and create jobs, while tackling climate change, according to a major study published in September 2018

The report from the Global Commission on the Economy and Climate, an independent body led by former heads of government and finance ministers, and business leaders, finds that bold climate action could deliver $26 trillion in economic benefits through to 2030 compared with business-as-usual. It defines this figure as conservative, suggesting the benefits of this new growth are being “grossly under-estimated” with current economic models “deeply inadequate for capturing the opportunities of such a transformational shift or the grave dangers of climate inaction”.

Ambitious changes to key economic systems, including energy, cities, food and land use, water and industry, could also generate over 65 million new low-carbon jobs in 2030, says the report, Unlocking The Inclusive Growth Story Of The 21st Century: Accelerating Climate Action In Urgent Times.

New Economic Era
“Amazing technological and market progress” has taken place over the last decade towards “a new climate economy” despite “often weak or even contradictory policies” in certain countries, says the report, acknowledging particular progress “on low-carbon and energy-efficient technologies”. It cites the “major shift in capital allocation within the energy sector in just the last few years” in favour of renewables and the $280 billion invested globally in new renewable energy generation in 2017.

It also underlines how auctions for long-term power contracts are generating unsubsidised bids from renewable energy producers at prices under $3 cents per kilowatt hour, out-competing fossil fuels in an increasing number of locations.

A decision by political, finance and business leaders to increase their ambition to reduce greenhouse gas emissions in all industrial sectors would benefit everyone, argues the study, insisting this is the only way to generate economic growth in the years to come.

“We are on the cusp of a new economic era: one where growth is driven by the interaction between rapid technological innovation, sustainable infrastructure investment and increased resource productivity,” states the report. “This is the only growth story of the twenty-first century. We can have growth that is strong, sustainable, balanced and inclusive.”

Critical Moment
The report warns, however, that there is no time to waste. “The next ten to 15 years are a unique ‘use it or lose it’ moment in economic history.” Globally around $90 trillion will be invested in infrastructure between now and 2030, says the study. “Ensuring this infrastructure is sustainable will be a critical determinant of future growth and prosperity.”

Making the right infrastructure decisions will also be critical in attempting to keep global temperature rises below the critical two degrees Celsius level and avoiding the human and financial costs this will engender, adds the report. Disasters triggered by weather- and climate-related hazards were already responsible for thousands of deaths and $320 billion in losses in 2017. Climate change will lead to more frequent and more extreme events like these, including floods, droughts and heat waves.

Writer: Philippa Jones