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Economists Make Financial Case for Climate Change

A new report outlines in economic terms the global benefits of transitioning to a low carbon economy.
The New Climate Economy report has been produced by the Global Commission on the Economy and Climate, which includes former Mexican President Filipe Calderon, British economist Nick Stern and Bank of America chairman Chad Holliday, among others.

The report states that between now and 2030, $90 trillion will be spent on infrastructure across cities, land use and energy sectors. Shifting to a low carbon economy, the report shows, would cost an extra $4 trillion.

By contrast, the report refers to the Intergovernmental Panel on Climate Change (IPCC), which has shown the cost of global warming of just 2 degrees Celsius would be 0.5 to 2.0 percent of global gross domestic product by mid-century and much higher for larger temperature increases.

Christian Aid’s principle climate change adviser, Alison Doig, said the report was encouraging and showed the growing consensus for climate action from across spectrum of society.

“Development organizations and environmentalists have been preaching action on climate change for decades, but now financiers and business leaders are starting to make the case simply on economic grounds,” she said.

“Four trillion dollars sounds like a huge amount of money but when compared with the $90 trillion, which will be spent on infrastructure, it’s a relatively affordable price to pay to deliver a safe and secure planet and protect the world’s most vulnerable people, especially when we consider that the financial cost of doing nothing would be far greater,” Doig said.

She added, “It’s particularly timely with world leaders meeting in New York … to kick start their negotiations on an international deal to start tackling the problem of global warming.”

Writing in The Guardian recently, Christian Aid’s chair, Rowan Williams, the former Archbishop of Canterbury, said the report was yet more encouragement for political leaders to act.

“This report will show that action on climate change is entirely compatible with economic growth in almost all countries and that the economic benefits, both short- and long-term, will outweigh the costs,” Williams said.

He went on to point out that as well as the economic case for action, the scientific and moral cases were also now clear.

Among its conclusions, the New Climate Economy report urges a move away from coal energy with greater investment in renewables, more compact and connected urban development to reduce emissions and a reduction in deforestation.

Specifically, it calls for a clear strategy to deliver the $100 billion per year of climate finance by 2020 from developed countries, which was promised by Hillary Clinton in 2009.

Paul Hobson is the news editor of The Baptist Times, the online newspaper of The Baptist Union of Great Britain. A version of this news article first appeared on The Baptist Times website and is used with permission. You can follow Paul on Twitter @PaulHobson10, the Baptist Times @BaptistTimes and the Baptist Union @BaptistUnionGB.