Yes, We Can Tackle Climate Change and Promote Economic Growth

Authors

• Edward Cameron

  Former Managing Director, BSR

Edward Cameron, Director, Partnership Development and Research, BSR

On Monday, the New Climate Economy (NCE) project launched a landmark report, “Better Growth, Better Climate,” which asks if it is possible to tackle long-term global warming while also promoting economic growth and development. The conclusion from the NCE’s Global Commission on the Economy and Climate—which comprises leaders from government, finance, business, and research institutions—is yes.

Instead of exploring ways to reduce greenhouse gas emissions, the report’s authors opted, creatively, to examine how minsters of finance, chief executives, and financial institutions could achieve their principal goals while also reducing their climate impacts. As a result, they harvested critical insights to inform investments, economic development, and climate action in the next 15 years. These include:

• How we choose to invest future financing will shape growth and determine whether the world can successfully shift to a more stable climate. Between now and 2030, around US$90 trillion will be invested globally in urban development, land use, and energy infrastructure. If we use this money wisely, we will create sustainable livelihoods, secure health benefits, improve social mobility, and build climate resilience. If we use the money carelessly, we will be locked into warming, with dangerous consequences for biodiversity, ecosystems, food security, human rights, and long-term development.
• Major structural and technological changes in the global economy are now making it possible to achieve lower-carbon development and better economic growth. Innovation in clean energy and information technology, along with rapid urbanization, is driving new opportunities for low-carbon growth.
• A growing number of successful businesses, cities, and countries are demonstrating that it is possible to improve economic performance and lower climate risk at the same time. Many will showcase their actions and their ambition across a range of sectors, including agriculture, energy, financial services, and transportation, at the UN Climate Summit in New York next week.
• Addressing climate risk is not too costly. The report addresses this long-standing concern and points out that financial impacts can be overstated, especially when the multiple benefits of climate action are taken into account.

The report stresses that there are "no simple reform formulas” for addressing climate, but it does present a 10-point action plan to advance climate action and build sustainable growth.

A number of the points are aimed squarely at governments. For example, the report calls for the 2015 climate talks in Paris to result in a “strong, lasting, and equitable international climate agreement,” under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC). In addition, the report calls for carbon pricing, the phasing out of fossil-fuel subsidies, and the creation of sensible incentives for sustainable cities, climate-smart agriculture, and curtailing deforestation.

There are also a number of recommendations directed toward the private sector. Businesses are asked to integrate climate risk and resilience fully into core business strategies, to improve efficiencies, to speak out in favor of climate policies, and to increase collaboration across industries.

These recommendations align with BSR’s own strategy, Business in a Climate-Constrained World. We have also concluded that actively addressing the full range of climate risks substantially outweighs the costs of inaction. And we have determined that ambitious climate action can be pursued in a manner that is pragmatic and consistent with other business goals. Finally, we strongly believe that collaboration is the secret to helping companies address complex sustainability challenges that are too systemic for any one actor to tackle alone.  

The NCE report opens with a quote from economist John Maynard Keynes: "It is better to be roughly right than precisely wrong." In recent years, the weight of scientific evidence, coupled with painful real-world experience in places from New York to the Philippines, has revealed that ignoring climate risk is precisely the wrong strategy for business and society. At a time when many countries are struggling economically, the Global Commission on Climate and Economy has made an enormous contribution to this debate by revealing that tackling climate change can kick-start better economic growth.

BSR will attend events around the UN Climate Summit and Climate Week NYC. See where we’ll be.