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World Bank: Climate policies could generate $2.6 trillion a year

Smart policies in US, EU, China, India, Brazil and Mexico would add trillions to global wealth

Pic: Flickr/Kathy

Pic: Kathy/Flickr

By Sophie Yeo

Smart climate policies in the US, EU, Brazil, China, India and Mexico could add up to US$ 2.6 trillion to the world’s economy a year, according to the World Bank.

The new report, ‘Climate-Smart Development: Adding up the Benefits’, assesses the impact of potential government policies on energy efficiency, waste management and public transport across the six regions.

It finds that implementing these new policies would have significant benefits for the economy, climate and health.

“The report’s findings show clearly that the right policy choices can deliver significant benefits to lives, jobs, crops, energy, and GDP – as well as emissions reductions to combat climate change,” said Jim Yong Kim, President of the World Bank Group.

Policies

The report analysed the impacts of these six regions adopting policies including a 30-45% improvement in vehicle fuel efficiency, reducing the energy consumption of industrial sectors by up to 53% and up to a 28% improvement in the energy intensity of buildings, all by 2030.

These policies would generate between $1.8 trillion and $2.6 trillion per year, as well as avoiding around 94,000 premature pollution-related deaths, found the report, which the World Bank produced together with the ClimateWorks Foundation.

It would also save around 8.5 billion tons of CO2 emissions being pumped into the atmosphere, and save the equivalent energy to taking 2 billion cars off the road.

In total, the three policies across the six regions would account for 30% of the total reductions needed by 2030 to limit global warming to 2C – the internationally agreed target, based upon scientific predictions that, beyond this, climate change could be too difficult and costly to handle.

The report supports the idea that smart policies to tackle climate change are more economically sensible than leaving climate change to run its course.

Financial burden

The UN’s science panel, the IPCC, concluded in their recent report that tackling climate change would slow economic growth by just 0.06% a year. Meanwhile, estimates of the economic costs of the damage caused by climate change mount into the tens of trillions.

Rich countries have pledged to raise US$ 100billion every year from 2020 to help mitigate and adapt to climate change.

A recent report by climate economist Lord Stern warned that the costs of climate change impacts could be higher than has been predicted so far.

“Governments should take a close look at the evidence in this report,” said Rachel Kyte, World Bank Group Vice President and Special Envoy for Climate Change.

“It reinforces the economic case for action over inaction on climate change. The report shows that climate action does not require economic sacrifice or, put differently, good economic stewardship can reap huge climate rewards.”

Scaling up

The report also looked at the impact of scaling up some existing policies: clean cookstoves in China, rapid bus transit in India, solid waste management in Brazil and agricultural waste management Mexico.

The combined benefits of these included over one million saved lives, 200,000 additional jobs and a reduction of CO2 equivalent to shutting down 100-150 coal plants.

If China used 70 million clean cookstoves – a method of reducing the country’s poisonous air pollution problem – the country would reap around $11 billion in economic benefits, the report found.

The findings are released ahead of a landmark climate summit to be hosted by UN Secretary General Ban Ki-moon in New York this September. The summit will be an opportunity for world leaders to declare new policies to tackle climate change, ahead of a UN climate conference in Lima.

Declarations at the Ban Ki-moon summit are expected to come in the form of sectoral and regional pledges, of the kind analysed in the World Bank report, rather than economy-wide cuts in emissions.

“The September Climate Summit provides a critical opportunity for world leaders to be on the right side of history, to champion ambitious action that not only cuts carbon pollution, but also delivers jobs and economic opportunity,” said Jim Yong Kim.

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