Investing in Climate, Investing in Growth, out today, has argued integrating growth and climate agendas could add 1% to average economic output in G20 countries by 2021 and lift 2050 output by up to 2.8%.
An additional net GDP increase of nearly 5% by 2050 would also be felt if climate change impacts on coastal regions could be avoided - such as flooding and storm damage.
The report says G20 countries – which account for 85% of global GDP and 80% of CO2 emissions – should adopt a combination of pro-growth and pro-environment policies in developing their overall growth and development strategies.
This means combining climate policies such as carbon pricing with supportive economic policies to drive growth centred on investment in low-emission, climate-resilient infrastructure.
“Far from being a dampener on growth, integrating climate action into growth policies can have a positive economic impact,” said OECD secretary general Angel Gurría
He added: “There is no economic excuse for not acting on climate change, and the urgency to act is high.”
The report urges governments to use infrastructure investments over the next 15 years to achieve the objectives of the 2015 Paris Agreement to stablilise the global climate, warning that delay could be costly.
According to the study there has been “chronic underinvestment” in infrastructure in G20 countries and it would require USD 6.9 trillion per year in infrastructure investment between now and 2030 to limit rise in global temperature to 2%, as agreed in the Paris talks.
The report recommends that G20 countries:
· Ensure the integration of climate objectives in pro-growth reforms, in particular to deliver better resource allocation, stronger investment and structural reforms in line with the low-emission transition.
· Strengthen climate mitigation policies, including carbon pricing, fossil fuel subsidy reform, smart regulations and the use of public procurement to help drive low-carbon innovation
· Scale up efforts to mobilise private investment in low-emission and climate resilient infrastructure through further efforts to green the finance system.
· Engage local governments, employers and workforce in the transition of exposed activities and communities, to deliver a just transition for workers.
