Can economic growth and action on climate change go hand-in-hand?

Global Commission on the Economy and Climate explains how this could be achieved in its New Climate Economy report

By Arjuna Srinidhi
Published: Tuesday 16 September 2014

Projected investment in infrastructure to the tune of $90 trillion represents a huge opportunity transition to green economy, says the report (Photo: American Enterprise Institute)

A new report released by a group of global leaders suggests that it is possible for governments and businesses to improve economic growth while also reducing their emissions.  Better Growth, Better Climate: The New Climate Economy Report was released at the UN headquarters in New York city at a global launch attended by United Nations Secretary General Ban Ki-Moon.  Released just a week ahead of the UN Climate Summit, the report hopes to drive world leaders and businesses towards a greener economy.

Addressing a press briefing, the chairperson of the Global Commission on the Economy and Climate and former president of Mexico, Felipe Calderón, said, “We are proposing a way to have the same or even more economic growth, and at the same time have environmental responsibility.”  According to the report, some US $90 trillion is likely to spent over the coming 15 years on new infrastructure around the world, representing a huge opportunity to not only transition towards a greener economy but also generation of co-benefits related to health, business productivity and quality of life.

The commission represents a group of 24 leaders from across 19 countries and comprises of government officials, business leaders, finance ministers, economists, city mayors and others.  It is advised by a panel of world-leading economists and is co-chaired by the eminent economist Lord Nicholas Stern.  The report also spells out a 10-point global action plan to achieve economic growth while limiting climate change with the claim that the agenda would lead to net benefits even before climate change is factored.

While some of the actions mentioned in the report might make economic sense, not all of it will be easy to implement.  The recommendation on eliminating subsidies for fossil fuels and agricultural inputs would meet stiff political resistance in a lot of developing and middle-income countries.  The methodology used for valuing co-benefits, such as human health, could also be debatable as even the IPCC has been hesitant in attaching a specific value.

An equitable international agreement on dealing with climate change would be vital to support the kind of investments detailed in the report.  Developed countries will have to take the lead with significant cuts in emissions and providing financial and technological support to developing countries. The timing of the report, just prior to New York Climate Summit where Ban Ki-moon has called for developed nations to make ‘bold pledges’, is therefore critical.  But what kind of actions and commitments it leads to be is yet to be seen.

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