Decisive action to overcome the climate crisis will promote economic growth in countries, rather than harming their finances, as opponents of climate reforms argue.
This is stated in a report by the Organization for Economic Cooperation and Development, The Guardian reports.
Active action to reduce greenhouse gas emissions will bring overall benefits to the global economy by the end of the next decade.
According to experts, 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 the devastating consequences of humanityʼs inaction to solve the climate crisis. That is, experts are confident that acting now is more profitable than doing nothing and then raking in the consequences.
By 2050, GDP per capita in economically developed countries will increase by 60%, and in lower-income countries by 124% compared to 2025.
In addition, developing countries could 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 investing in climate transformation is not holding us back. On the contrary, we are seeing moderate GDP growth – at first glance it seems insignificant, but it has a tendency to grow rapidly,” said Achim Steiner, head of the United Nations Development Programme.
Unless Europe takes decisive action, it faces an economic catastrophe, according to Simon Still, the UNʼs top climate official. Extreme weather events will reduce Europeʼs GDP by 1% by 2050, and then by 2.3% each year.
While these numbers may not seem like much, the important thing is that the decline will be continuous, year after year. For comparison, during the 2008-2009 financial crisis, EU GDP fell by 5.5%, but within a few years the economy began to recover. 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 net zero emissions by 2050 is harmful to the economy, as the transition from fossil fuels to clean energy sources allegedly slows growth and undermines the global economy.
In reality, investing in renewable energy is relatively inexpensive, especially when compared to the potential economic damage from climate change. In the UK, for example, annual spending on such investments is only about 0.2% of GDP by 2050. Helping poorer countries fight the climate crisis also benefits richer countries.
According to the International Renewable Energy Agency (IRENA), the world saw a record 15% increase in green energy capacity last year. And China, the world leader in renewable energy production, accounted for almost two-thirds of that growth.
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