World leaders will attend the United Nations summit on climate change (September 23) convened by the U.N. secretary general Ban Ki-moon, as civil society gets ready to take to the streets of New York for the People’s Climate March two days earlier on the 21 (the largest climate rally in history, say its organizers). To welcome them all, a new report brings some optimism to the table when it comes to the ever-complicated issue of fighting climate change and its correlation with economic growth. The key to success is transforming the global economy. “The next 15 years of investment will also determine the future of the world’s climate system,” says the report dubbed The New Climate Economy.
The main point the paper presents is that the next big transformation of the global economy can deliver strong economic growth and poverty reduction, and at the same time reduce the growing potential risks of climate change. The vehicle through which to reach this level is through lower-carbon forms of growth, since the difference in infrastructure investment compared to higher-carbon forms of growth is likely to be relatively modest, according to the paper. “An estimated $90 trillion will be invested in infrastructure in 2015–2030 (about $6 trillion per year); a shift to low-carbon investments would add about $4 trillion (about US$270 billion per year). That would be less than a 5% increase in projected aggregate infrastructure investment requirements,” reads the report (see figure below) produced by the Global Commission on the Economy and Climate.
The underlying theme is that future economic growth does not have to copy the high-carbon, unevenly distributed model of the past since today is now huge potential to invest in greater efficiency, structural transformation and technological change in three key systems of the economy (as stated in the report):
- Cities are engines of economic growth. They generate around 80% of global economic output, and around 70% of global energy use and energy-related green house gas emissions. As pioneering cities across the world are demonstrating, more compact and connected urban development, built around mass public transport, can create cities that are economically dynamic and healthier, and that have lower emissions. Such an approach to urbanization could reduce urban infrastructure capital requirements by more than $3 trillion over the next 15 years.
- Land use productivity will determine whether the world can feed a population projected to grow to over eight billion by 2030, while sustaining natural environments. Food production can be increased, forests protected and land use emissions cut by raising crop and livestock productivity, using new technologies and comprehensive approaches to soil and water management. Restoring just 12% of the world’s degraded agricultural land could feed 200 million people by 2030, while also strengthening climate resilience and reducing emissions. Slowing down and ultimately halting deforestation can be achieved if strong international support is combined with strong domestic commitment to forest protection and rural income development.
- Energy systems power growth in all economies. We are on the cusp of a clean energy future. Coal is riskier and more expensive than it used to be, with growing import dependence and rising air pollution. Rapidly falling costs, particularly of wind and solar power, could lead renewable and other low-carbon energy sources to account for more than half of all new electricity generation over the next 15 years. Greater investment in energy efficiency – in businesses, buildings and transport – has huge potential to cut and manage demand. In developing countries, decentralized renewables can help provide electricity for the more than one billion people without access.
The report is considered the first major economic study case for acting on climate change since the seminal Stern Review of 2006. “We are proposing a way to have the same or even more economic growth, and at the same time have environmental responsibility,” said the chairman of the commission, Felipe Calderón, the former president of Mexico and an economist. The commission is formed of former heads of government and finance ministers, and leaders in the fields of economics, business and finance and was advised by by a panel of distinguished international economists.
On September 23, up to 122 heads of government will attend the climate summit where they are expected to make four-minute speeches outlining commitment to global emissions agreement for the next major meeting which will happen in Paris. The 2015 United Nations Climate Change Conference aims to secure a legally binding, universal agreement on climate from all countries of the world. A low-carbon economy is the direction the report suggests and is the one the global community to go in. For now, it’s the clearest, coherent, and well-presented path to follow for protecting the planet while maintaining economic growth.