10 steps to a 'new climate economy'
Among the proposals in a major new report on the economics of global climate action: investing $1 trillion — per year — on clean energy.
The Global Commission on the Economy and Climate this week launched a major report outlining key actions that governments and businesses can embrace to help the world tackle climate change.
The report lists 10 central actions, which the authors claim would achieve up to 96 percent of the emissions reductions in 2030 needed to hold the rise in global temperature to under 2 degrees Celsius, the level which governments have pledged not to cross.
Here's the rundown of the business sectors, investors and policy levers identified in the New Climate Economy report:
1. Build carbon-sensitive cities
All cities should commit to developing and implementing low-carbon urban development strategies by 2020.
Where possible, they should use the framework developed by the Compact of Mayors, prioritizing policies and investments in public, non-motorized and low-emission transport, building efficiency, renewable energy and efficient waste management.
This could save around $17 trillion globally by 2050.
2. Fight for forests
Halt deforestation by 2030 and restore degraded farmland.
How? By boosting partnerships such as REDD+, the 20x20 Initiative in Latin America and the Africa Climate-Smart Agriculture Alliance to bring together forest countries, developed economies and the private sector.
3. Ante up on clean energy — to the tune of $1 trillion per year
Renewable energy, in particular wind and solar, are well on their way to becoming commercially viable for consumer and business buyers. But it will take large-scale investment to spur mass adoption.
Governments, development banks and the private sector should collaborate to reduce the cost of capital for low-carbon power and energy efficiency.
4. Raise the bar on energy efficiency
The G20 and other countries should converge their energy efficiency standards in key sectors, such as appliances, lighting, and vehicles.
Investment in energy efficiency could boost cumulative economic output globally by $18 trillion by 2035.
5. Put a price on carbon
All developed and emerging economies should commit to launching or strengthening carbon pricing by 2020.
A key complementary action: Phasing out fossil fuel subsidies.
6. Plan for climate-smart infrastructure
The G20 and other countries should include climate change impacts in their national infrastructure policies and plans.
These should be used to guide investment strategies of public and private finance institutions, particularly multilateral and national development banks.
7. Prioritize low-carbon innovation
The private sector should work with countries to boost research and development, along with demonstrations, of low-carbon technologies that will be critical to post-2030 growth and emissions reduction.
While the Obama administration has leaned on the private sector to raise $4 billion in clean energy capital committments, the report argues that public funding for green R&D should be at least tripled by major economies by the mid-2020s.
8. Make new markets with businesses and investors
All major businesses should adopt short- and long-term emissions reduction targets and implement corresponding action plans. All major industry sectors and value changes should agree on market transformation roadmaps consistent with the long-term decarbonization of the global economy.
Financial sector regulators and shareholders actively should encourage companies and financial institutions to disclose critical carbon and environmental, social and governance factors and incorporate them in risk analysis, business models and investment decision making.
9. Think bigger when it comes to aviation and maritime
Emissions from the international aviation and maritime sectors should be reduced in line with 2 C goals through action under the International Civil Aviation Organization.
The goal is to implement a market-based measure and aircraft efficiency standard, and through strong shipping fuel efficiency standards under the International Maritime Organization.
10. Phase out hydrofluorocarbons (HFCs)
Parties to the Montreal Protocol should approve an amendment to phase out the production and use of HFCs used as refrigerants, solvents, fire protectants and in insulating foams.
These materials account for HFCs are the fastest growing greenhouse gases in much of the world, increasing at a rate of 10 to 15 percent per year.
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