World Bank: Climate Change Policies Will Boost Global Economy

The economic argument against taking action on climate change — i.e., "It’s just too expensive!" — is fast becoming passé, with a World Bank report this month noting that policies to cut carbon pollution might actually boost the global economy by up to $2.6 trillion a year.

Yes, that’s trillion!

This is the first time that “climate-smart” project scenarios have been tallied on such a large scale to find out how government actions can boost economic performance and benefit lives, jobs, crops, energy and GDP – as well as emissions reductions to combat climate change.

The 88-page report, "Climate-Smart Development: Adding Up the Benefits of Actions that Help Build Prosperity, End Poverty and Combat Climate Change," focuses on five countries – Brazil, China, India, Mexico, and the United States – plus the European Union. Big benefits will flow by 2030 if that group implements just three sets of policies on clean transportation, energy efficiency in industry and energy efficiency in buildings, the report asserts.

“The annual benefits of just these policies in 2030 include an estimated GDP growth of between $1.8 trillion and $2.6 trillion.” In addition, the report found that “these policies alone would account for 30 percent of the total reduction needed in 2030 to limit global warming to 2 degrees Celsius (3.6 degrees Fahrenheit).” More benefits: these policies avoid 94,000 premature pollution-related deaths and 8.5 billion metric tons of carbon dioxide equivalent (CO2e) emissions, the World Bank found. They also would save nearly 16 billion kilowatt-hours of energy, roughly equivalent to taking 2 billion cars off the road.

“Climate change poses a severe risk to global economic stability, but it doesn’t have to be like this,” said World Bank Group President Jim Yong Kim. “At the World Bank Group, we believe it’s possible to reduce emissions and deliver jobs and economic opportunity, while also cutting health care and energy costs. This report provides powerful evidence in support of that view.”

In the transportation policy scenario, for example, if the five countries and the EU shifted more travel to public transit, moved more freight traffic off of roads to rails and sea, and improved fuel efficiency, they could save about 20,000 lives a year, avert hundreds of millions of dollars in crop losses, save nearly $300 billion in energy, and reduce pollution emissions by more than four gigatons.

Some of the benefits come from reducing emissions of what are known as short-lived climate pollutants, or SLCPs, the report continues. Black carbon from diesel vehicles and cooking fires, methane from mining operations and landfills, ozone formed when sunlight interacts with emissions from power plants and vehicles, and some hydrofluorocarbons are all SLCPs. “They can damage crops and cause illnesses that kill millions. Reducing these emissions could avoid an estimated 2.4 million premature deaths and about 32 million tons of crop losses a year.” the World Bank said. Unlike CO2, SLCPs do not linger in the atmosphere for centuries but are removed in weeks or years. Stopping these air pollution emissions from entering the atmosphere would by itself help reduce warming and provide time to develop and deploy effective CO2 interventions.

The World Bank’s finding matches that of the recent International Energy Agency (IEA) report, “Energy Technology Perspectives,” according to a ThinkProgress article. The IEA found that an aggressive effort to deploy renewable energy and energy efficiency (and energy storage) to keep global warming below the dangerous threshold of 3.6 degrees Fahrenheit/2 degrees Celsius would be staggeringly cost-effective, “resulting in net savings of $71 trillion” by 2050.

It’s becoming clear that addressing climate change on a national and world level is more a matter of political will than concern about the cost. Financial cost is a perilous excuse for inaction.

As the World Bank says, “Thanks to a growing body of research, it is now clear that climate-smart development can boost employment and can save millions of lives.” Smart development policies and projects can also slow the pace of adverse climate changes. “Based on this new scientific understanding, and with the development of new economic modeling tools to quantify these benefits, it is clear that the objectives of economic development and climate protection can be complementary.”

What in the world are we waiting for?

Image credit: Climate-Smart Development report cover via the World Bank