BANGKOK (Thomson Reuters Foundation) - Tackling climate change could boost the world’s 20 biggest economies by nearly 5 percent in 2050, compared to a continuation of current policies, the Paris-based OECD said on Tuesday.
Investing $6.9 trillion per year in clean infrastructure between 2016 and 2030 in G20 countries would help limit global temperature rise to below 2 degrees Celsius as agreed by world leaders in Paris in 2015, the Organization for Economic Co-operation and Development (OECD) said in a report.
The additional investment cost could be offset by annual fuel savings of $1.7 trillion from more energy-efficient technologies and infrastructure, it added.
Keeping global warming below 2C would limit the worst effects of sea-level rise, Arctic sea ice melting, damage to coral reefs and acidification of oceans, according to the U.N. Intergovernmental Panel on Climate Change.
The OECD says G20 countries account for 80 percent of carbon dioxide emissions, a key contributor to climate change.
“Far from being a dampener on growth, integrating climate action into growth policies can have a positive economic impact,” OECD Secretary-General Angel Gurría said in a statement.
Combining climate policies, such as charging polluters, with economic policies to drive growth through more environment-friendly infrastructure could increase G20 economies’ gross domestic product by up to 2.8 percent on average in 2050, the report said.
This rises to nearly 5 percent if the economic benefits of avoiding climate change impacts such as coastal flooding or storm damage are taken into account, it said.
Experts say private sector financing is key to achieve these investments. The OECD report called on development banks and financial institutions to facilitate and support public and private investors.
Mitigating the impacts of climate change is “a huge economic opportunity” globally, Paul Ekins, a professor at University College London and co-director of the UK Energy Research Centre, told a new conference in Bangkok on Tuesday.
Speaking on economic and environment challenges facing the Asia Pacific region, he pointed to a January 2017 report that found companies could unlock $12 trillion in market opportunities by implementing a few key development goals, including energy efficiency.
“There is a perception among politicians that... if we want a clean environment, we have to sacrifice the economy,” he said.
“That can be true but overwhelmingly, the environment is a business opportunity partly because we have so abused it in the past it is having serious negative impacts on our health, and therefore on our productivity and on our economy.”