World leaders heading home from this week’s Davos economic forum, will leave with a stark prediction ringing in their ears: invest trillions of dollars in green technology or face economic and environmental meltdown.
The warning is made in a report released by the Green Growth Action Alliance, a group led by former Mexican President Felipe Calderon which includes over fifty of the world’s largest energy companies as well as, amongst others, the World Bank, Deutsche Bank and the European Bank for Reconstruction and Development.
The report - which can be viewed here - claims that we will need to spend an additional $700bn per year over the course of the next two decades to “green” the global-economy, avert the worst impacts of climate change, and ensure long-term sustainable economic growth
Outlining the need for additional world-wide investment in areas including clean energy and infrastructure, low carbon transport and efficient industrial technology, the alliance calls on G20 members to use public finance to mobilise private investment through policy support, incentives, and guarantees.
Acknowledging that public funds are limited, and increased public-spending isn’t particularly compatible with the current climate of international-belt tightening, the report’s emphasis is firmly on supporting private investment. Indeed, citing observations of climate-specific investment, it argues that a relatively small increase in highly targeted public spending to around $130 billion per year could secure private capital in the region of $570 billion per years.
There’s no getting away from the fact that the figures discussed are pretty huge. $700 billion a year for the next 20 years is $14 trillion; an almost unimaginable figure that has prompted some visitors to our poll - to wonder whether we’ve gone mad.
We haven’t. And though we’re not economists, if you accept the overwhelming scientific consensus supporting anthropogenic climate and give credence to the warnings of independent scientists the world over, then its certainly plausible that this scale of investment would be required. Indeed, it seems a small price to pay for our continued survival on this planet.
The Green Growth Alliance report is the latest sign that this scientific consensus is being strengthened by a growing economic consensus. And there’s nothing like a strong economic argument to make politicians sit up and take notice. Indeed, President Obama’s inaugural pledge to tackle climate change was a significant statement of intent, and a welcome sign that these economic arguments are falling on increasingly receptive ground.