Overcoming the climate crisis will rapidly accelerate economic growth
27 March 21:44
Decisive action to tackle the climate crisis will contribute to the economic growth of countries, rather than harm their finances, as opponents of climate reforms claim.
This is stated in a report by the Organization for Economic Cooperation and Development, The Guardian reports , "Komersant Ukrainian".
Active actions to reduce greenhouse gas emissions will bring the global economy a total profit by the end of the next decade.
Experts estimate that by 2040, the total economic profit from such actions will be 0.23%. And by 2050, this figure will be even higher if we take into account the avoidance of devastating consequences of humanity’s inaction to address the climate crisis. In other words, experts are confident that acting now is more profitable than doing nothing and then dealing with the consequences.
By 2050, GDP per capita will increase by 60% in economically developed countries, and by 124% in lower-income countries compared to 2025.
In addition, developing countries can reap significant benefits in the near future: if they start investing in reducing greenhouse gas emissions now, 175 million people could be lifted out of poverty by the end of the decade. But if nothing is done, the global economy could lose up to a third of its size in the 21st century.
“There is compelling evidence that investments in climate transformation are not pulling us backwards. On the contrary, we are seeing moderate GDP growth – at first glance, it seems insignificant, but it tends to grow rapidly,” said Achim Steiner, head of the United Nations Development Program.
If Europe does not act decisively, it will face an economic catastrophe, said Simon Still, the UN’s chief climate negotiator. Due to extreme weather events, Europe’s GDP will decline by 1% by 2050, and then fall by 2.3% annually thereafter.
While these numbers may not seem like much, the important thing is that the decline will be steady, year after year. For comparison, during the financial crisis of 2008-2009, the EU’s GDP fell by 5.5%, but the economy began to recover within a few years. In the case of the climate crisis, the decline will be continuous, as if Europe were going through a severe recession every year.
If this situation continues for twenty years, the EU economy may simply cease to exist.
Critics believe that achieving zero emissions by 2050 is harmful to the economy, as the transition from fossil fuels to clean energy sources allegedly slows down growth and undermines the global economy.
In fact, investments in renewable energy are relatively inexpensive, especially when compared to the potential economic losses from climate change. For example, in the UK, the annual cost of such investments by 2050 is only about 0.2% of GDP. Helping poorer countries fight the climate crisis is also beneficial for richer countries.
According to the International Renewable Energy Agency (IRENA), last year the world saw a record increase in green energy capacity by 15%. And almost two-thirds of this growth was provided by China, which is a leader in renewable energy production.
