As world leaders gear up for the climate summit being hosted by the UN Secretary General to bring momentum to the negotiations for a new climate deal, a new report of a commission led by Felipe Calderon and Nicholas Stern shows that it is possible for the world to improve economic growth and reduce carbon emissions simultaneously
Cities across the world contribute to around 80% of the global economic output. But they are also responsible for nearly 70% of the global energy use and greenhouse gas emissions. This often gives rise to the debate whether rapidly growing cities can strike a balance between economic growth and tackling climate change.
A new report – Better Growth, Better Climate – just released by a group of global leaders shows that the two can indeed go together. It can be done through technological innovation and new investments in infrastructure which are already taking place.
“The New Climate Economy report refutes the idea that we must choose between fighting climate change and growing the world’s economy. That is a false dilemma,” said Felipe Calderon, former President of Mexico and Chair of the Global Commission on the Economy and Climate. “Today’s report details compelling evidence on how technological change is driving new opportunities to improve growth, create jobs, boost company profits and spur economic development.”
The report that was launched at the UN headquarters on Tuesday shows that the global economy will increase by half in the next 15 years. About $90 trillion will be invested in infrastructure. Given this, “the next 15 years will be critical” as the global economy will undergo a major transformation and the investments made during this period will determine the future of the world’s climate system.
“The decisions we make now will determine the future of our economy and our climate,” said Nicholas Stern, Co-Chair of the commission. “If we choose low-carbon investment we can generate strong, high-quality growth – not just in the future, but now. But if we continue down the high-carbon route, climate change will bring severe risks to long-term prosperity.”
The report shows that there is huge potential to invest in greater efficiency, good-quality infrastructure and business innovations in various sectors which in turn can have significant economic and social benefits.
For example, building cities that are based on mass public transport can lead to savings of over $3 trillion in the next 15 years. Restoring just 12% of the world’s degraded lands can help feed up to 200 million people and raise farmers’ incomes by $40 billion a year.
There is huge potential in clean and renewable energy. With the falling prices of solar and wind power, it is quite likely that nearly 50% of the new energy is likely to come from the renewable sector. If the current fossil fuel subsidy of $600 billion is phased out, it will generate funds for poverty reduction while reducing carbon emissions. New financial instruments can cut capital costs for clean energy by 20%.
“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 he also pointed out that “inconsistent policy in many countries is now creating uncertainty, hurting investment and job creation. Businesses and investors need clearer market signals.”
Commenting on the report, Sunita Narain, Director General, Centre for Science and Environment, a research organization based in New Delhi, said, “These are just words that have not translated into actions. No country in the world has built the low carbon economy.”
Pointing out that developed countries need to fulfil their pledges to curb greenhouse gas emissions responsible for global warming, Narain said, “Time for words is over. This is the time for actions. Very little has been achieved since 1988 when the first conference on climate change was held. The energy basket needs to be changed from fossil to non-fossil fuels. With EU going for coal and US opting for shale gas, they are not making the transformation that is required.”
The new economy report has 10 recommendations for decision-makers to help build a greener and more robust economy. They include:
- Accelerating low-carbon growth by integrating climate into core economic decision making processes
- Entering into a strong, lasting and equitable climate agreement
- Phasing out fossil fuel subsidies and incentivising urban sprawl for more efficient use of resources
- Introduction of strong, predictable, carbon prices
- Scaling up innovation in key low-carbon and climate resilient technologies
- Restoration of at least 500 million hectares of degraded forests and agricultural lands by 2030
The report comes a week ahead of the summit called by UN Secretary General Ban ki Moon, where 125 heads of government and state are gathering to share actions to mitigate climate change. While world leaders have pledged to limit emissions to check the rise in global average temperature to 2 degrees Celsius, the current trend shows that the warming might in fact overshoot 4 degrees Celsius by the turn of the century, with potential catastrophic impacts.
According to calculations by the Global Commission on the Economy and Climate, if all the ten recommendations mentioned in the report are fully implemented, it will achieve 90% of the emissions reductions needed by 2030 to avoid the worst impacts of climate change.