Climate action’s triple dividend
Climate action’s triple dividend
This article has been adapted from VERGE Weekly, GreenBiz's newsletter running Wednesdays. Subscribe here.
There’s a significant transformation underway in the global community’s understanding of the costs and benefits associated with investing in climate mitigation and adaptation.
Previously, the dominant narrative was that tackling climate change at scale would crash the global economy. But, like the broader trend in climate coverage — which Joel Makower demystified in a piece earlier this week — this, too, is shifting in lockstep with growing concern over the climate crisis.
Put simply, the story is shifting from "Solving this is too expensive and we can’t afford it" to "Fixing it now will be expensive, but not as expensive as waiting, and there are other societal benefits from acting sooner than later."
Over the past few weeks, two authoritative research reports have concluded that there are trillions of dollars to be gained from investing in climate solutions, and that the economic opportunities are significant in rich, poor, cold and hot countries alike.
The Global Commission on Adaptation is kind of a big deal — and so are the insights to be gleaned from its most recent report, "Adapt Now: A Global Call for Leadership on Climate Resilience." The commission, led by an impressive group including Microsoft founder Bill Gates, former United Nations Secretary-General Ban Ki-moon and World Bank CEO Kristalina Georgieva, concluded that investing $1.8 trillion in climate solutions by 2030 would yield $7.1 trillion in total net benefits. You read that correctly: We’re talking a fourfold financial return, not to mention the cascading ecological and social benefits that come with ensuring a livable, healthy planet.
Indeed, the report’s authors refer to this return as the "triple dividend": the ability of the investment to reduce future losses; the positive economic benefits of reducing risk, increasing productivity, and driving innovation through the need for adaptation; and the social and environmental benefits. That’s a pretty healthy ROI.
The report focuses on the potential of investing in five linchpin systems: weather warning; infrastructure; dry-land farming; mangrove protection; and water management. The resulting insights across each are striking, and have led the commission to call for three distinct but interconnected revolutions:
A Revolution in Understanding — to ensure that the risks that societies and economies face are fully understood, and reflected in the decisions that public and private actors make;
A Revolution in Planning — to improve how we make policy and investment decisions and how we implement solutions; and
A Revolution in Finance — to mobilize the funds and resources necessary to accelerate adaptation.
Central to the evolving conversation and strategy is how best to enable these revolutions in developing nations — the "climate-sensitive" countries in need of adaptation strategies but with limited access to financial services. They are, after all, those least responsible for the causes of climate change and already, with increasing frequency, the first victims of it. And because of their already precarious living conditions, the consequences could be existential.
The report outlines examples of productive models already underway: In Fiji, a 10 percent tax on the wealthy, as well as on major luxury items, raised almost $120 million for clean energy, disaster relief, reforestation, research and infrastructure. In the United States, Miami voters approved a $400 million "Miami Forever Bond" program that already has begun funding resilience projects.
Another recent report, published by the National Bureau of Economic Research and authored by researchers at the University of Cambridge, contests the prevailing assumption that the economic burden of climate change will fall primarily on hot or poor countries. According to the authors, "All countries — whether rich or poor, hot or cold — will suffer economically by 2100 if the current trajectory of carbon emissions is maintained."
The study suggests that, in a business-as-usual emissions trajectory — which puts average global temperature rise at over 4 degrees Celsius by 2100 — we can expect 7 percent of global GDP to disappear. In this 4-degree-warmer world, countries including the United States, Japan, India, Russia and New Zealand would likely lose about 10 percent of their GDP, while Switzerland and Canada would lose closer up to 13 percent.
Conversely, committing to and achieving the goals of the Paris Agreement would limit the losses to under 2 percent of GDP, say the authors.
Of course, while all these economic data points and projections are insightful, what matters most is how they inform — and ultimately incite — better, bolder action. Revolutions, such as those the Global Commission on Adaptation is calling for, historically have created better outcomes — a more just, equitable, clean and healthy world for all. The nature of the changes may be disruptive, but it’s important to maintain our focus on what’s at stake — and on what’s possible if we get this right.
Speaking of climate leadership and what success looks like: This year’s VERGE Vanguards, whom we announced this week, are at the forefront of both.
Now in its second edition, our annual VERGE Vanguard report profiles individuals who are harnessing innovation to mitigate climate change and facilitate the clean economy transition. This year’s 20 honorees are operating across the full spectrum of what’s possible and needed: They are inspiring an equitable, inclusive transition to a clean power grid; drawing the roadmap for a zero-emissions transportation system; building the framework for a more circular economy; and enabling communities and companies around the world to draw down levels of atmospheric carbon dioxide.
I strongly urge you to read the profiles and stories of these pioneers — leaders disrupting the business as usual trajectory from within and outside of large organizations — for a healthy dose of inspiration.
Finally, in case you missed it: This week we announced California Gov. Gavin Newsom as our opening keynote for VERGE 19 — joining an all-star lineup that includes Apple’s Lisa Jackson, RMI’s Amory Lovins, CARB’s Mary Nichols, Google’s Rebecca Moore and PolicyLink’s Angela Glover Blackwell. It’s going to be our biggest and best VERGE event yet, and I sincerely hope you’ll join us. Our Early Bird Rate expires Sept. 27, so now is a great time to register if you haven’t already.