As the global population expands to 9 billion by 2050, we are set to spend trillions of dollars on supporting infrastructure that is likely to damage our climate. The good news is that spending more up front on making that infrastructure sustainable will pay off in the long run and provide new growth opportunities.
That's the conclusion reached by a group of multinational businesses and institutions -- called Green Growth Alliance -- tasked by the G20 to consider green growth. To make that vision a reality, though, governments would need to spend $130 billion -- an amount that could, if well directed, mobilize another $570 billion of private finance, the group argues in a report released this week.
But it will take some political and business courage to make that $700 billion yearly investment a reality.
The positive outlook of the Green Growth Alliance, chaired by former Mexican President Felipe Calderón, is partly based on evidence that sustainable investment has proven remarkably resilient in recent years. Spending on renewable energy in 2011 was up 17 percent on 2010. That is double what was being invested just before the financial crisis struck in 2007 and six times higher than in 2004. Global agricultural productivity is rising faster than population and 2 billion more people have enjoyed improved water access in the last 20 years.
Investment needs to be directed at newly industrializing economies to keep climate change under control. That is already happening. More surprisingly, we are at -- or just about at -- the point when more clean energy asset financing is originating from these emerging markets themselves than from developed countries.
Next page: Targeted spending to bridge funding gap