Banking News

$26 Trillion added to Global economy by 2030 with greener growth

(5 September 2018 – Global) Strong action to combat climate change could cumulatively add at least US$26 trillion to the world economy by 2030 according to a study which seeks to dispel fears that a shift from fossil fuels will undermine growth.

The Global Commission on the Economy and Climate (GCEC), which includes former heads of government, business leaders and economists, said there was “unprecedented momentum” toward greener growth that would boost jobs and countries’ economies. Bold climate action could deliver at least $26 trillion in net cumulative benefits from now until 2030 compared with business as usual, it predicted. 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

The commission’s study adds detailed projections since it first issued a report in 2014 to highlight economic opportunities from a shift away from fossil fuels. Smarter investments in cleaner energy, cities, food and land use, water and industry could generate 65 million new jobs in 2030, equivalent to the workforces of Egypt and Britain combined, the study said. A shift from fossil fuels to cleaner energies such as wind and solar power would avoid 700,000 premature deaths from air pollution in 2030, it added. The report recommended high prices on carbon dioxide emissions of $40-$80 per tonne by 2020 in major economies. Subsidy reforms in the energy sector, coupled with higher carbon prices, could raise $2.8 trillion a year in government revenues in 2030. In contrast US President Donald Trump commented in 2017 that he will pull the United States out of a global climate pact called the Paris Agreement because it would impose what he called “draconian financial and economic burdens” on the country. President Trump, who doubts that man-made emissions of greenhouse gases are the prime cause of climate change and wants to promote the coal industry, has said the 2015 Paris Agreement could cost 2.7 million U.S. jobs by 2025. But the report predicted that U.S. jobs lost in fossil fuels can be more than offset by a rise in employment in renewables and construction. It said 476,000 people were now employed in wind and solar power in the United States. Despite signs of climate action the report said “we are not making progress fast enough” to limit a rise in temperatures linked to more floods, heat waves, wildfires and rising sea levels. “There’s still a perception that moving toward a low-carbon path would be costly. What we are trying to do with this report is once and for all put the nails in the coffin on that idea” GCEC spokesperson Helen Mountford said.

In Australia investors have been urged to “step up the pressure” on companies to act on climate change as AGM season approaches, with a report arguing corporate Australia is not doing enough on the issue. Environmental non-profit Market Forces says many of Australia’s 100 biggest listed companies are continuing to take a "superficial" approach to disclosure and action on climate change and emissions, despite warnings by regulators and lawyers of potential business and legal risks. Almost 40 per cent of companies examined had increased emissions over the past year, Market Forces said. Market Forces research suggests that of 74 ASX100 companies in sectors dubbed “high risk” for climate change impacts (as defined last year by a G20-led task force on climate risk disclosure) only 55 per cent identified climate change as a material business risk, and more than 80 per cent did not have a plan to reduce their own emissions.