Is Combating Climate Change the Key to Economic Growth?
A new report says economies could expand if their governments reduce toxic emissions in cities and reduce the amount of energy and land used in industrial production.
A study by the Global Commission on the Economy and Climate found that governments will spend some $90 trillion to improve their urban infrastructure by 2030, an investment that will yield equalizing dividends, including more than $3 trillion from improvements in mass transportation.
The report also says that recovering just 12 percent of land that has deteriorated from decades of industrial use could raise farmers’ income by as much as $40 billion and feed as many as 200 million people in the next fifteen years.
The panel recommends that governments triple their spending to at least 0.1 percent of gross domestic product for research and development of low- or non-polluting technologies, and gradually end $600 billion in annual subsidies to industries that rely on fossil fuels.
“If we choose low-carbon investment, we can generate strong, high-quality growth – not just in the future, but now,” said Nicholas Stern, the co-chairman of the commission, which was set up by seven nations to advise on the best ways to fight climate change.
Many government officials agree that the very act of working to reverse global warming helps boost economies. German Environment Minister Barbara Hendricks told Bloomberg News, “Climate protection has become a growth engine.”
Germany is taking major steps to replace its nuclear reactors with renewable forms of energy, including solar and wind power.
The report also found that cities are major pollution culprits. Half the world’s population of 7.2 billion people now live in cities, which generate 80 percent of global economic growth but also about 70 percent of toxic emissions.
Cities also tend to sprawl unchecked as their populations continue to grow – by an estimated rate of 1 billion people in the next fifteen years.
The report was issued one week before heads of state and government from around the world will meet at a summit in New York hosted by U.N. Secretary-General Ban Ki-Moon. In the past twenty years, progress to limit toxic emissions has been slow. Now, though, nearly 200 countries are shaping a treaty that would limit toxic emissions. The pact is expected to be ratified in Paris in 2015.
Originally written for OilPrice.com, a website that focuses on news and analysis on topics of alternative energy, geopolitics, and oil and gas. OilPrice.com is written for an educated audience that includes investors, fund managers, resource bankers, traders, and energy market professionals around the world.