The World Economic Forum (WEF), the international non-governmental and lobbying organization which, since 1971, has been organized every year in Davos, a Swiss town in the heart of the Alps, is underway these days.
The World Economic Forum brings together key world leaders to promote multilateralism and multi-stakeholder solutions to global challenges. Multilateralism means not only agreeing on a set of global principles and rules, but also drawing on different knowledge, strengths and perspectives from different sides to quickly transform new knowledge into collective action.
Great attention to environmental issues, especially in light of the latest IPCC report which launches the warning that time is no longer on our side to take action on climate change.
Also at the center of the talks the Global Turning Point report recently published by the Deloitte Economics Institute.
The report examines two possibilities: global action and global inaction. Economic modeling reveals the growth and opportunities that could present themselves over the next 50 years if we take swift and substantial global action for the climate, compared to a baseline economic scenario of insufficient action that considers increased damage and loss of opportunity.
According to the report, we can still help reverse the trend of an unprecedented rise in temperature. This is achieved through a change in the behavior of society and thanks to a sequence of actions by governments, businesses and civil society. The world can still achieve zero emissions by 2050 and we have a chance to achieve the Paris Agreement goal of limiting warming to as close as possible to 1.5 ° C.
Global Climate Action Against Inaction
What could happen if we continue to follow the business as usual path?
A recent survey by Deloitte, involving 23 countries and more than 23,000 respondents, found that more than half had personally experienced an extreme weather event related to climate, from wild fires to excessive heat, from floods to drought. Uncontrolled climate change could create global economic losses of $ 178 trillion (in terms of present value) between now and 2070. And we know that often those who contribute less to global carbon emissions suffer the most from climate impacts.
If we let global greenhouse gas emissions rise and the planet continue to warm, we will see a future where average temperatures will rise by around 3 ° C by 2100. This will not only lead to significant damage on an environmental and human scale, but it will be also detrimental to the global economy.
But what could happen if we take concerted and coordinated measures for decarbonisation right now?
Analysis by the Deloitte Economics Institute shows that the race to net zero will not only benefit the environment, but also long-term economic growth. We already have many of the technologies, business models and policy approaches to achieve rapid decarbonisation. This economic transformation could lead to significant and more sustainable economic prosperitythanks to the avoided costs of climate damage and new jobs, industries, technological innovations and the opportunities that would create a global zero-emissions economy.
Regional economic benefits of decarbonisation
Tackling climate change quickly is a global economic imperative, with benefits for all. The appearance and development of this transformation will vary by region, but nearly all countries and sectors will gain from rapid decarbonisation and climate action.
- Asia Pacific may turn its $ 96 trillion loss from the baseline scenario into a profit of $ 47 trillion, limiting heating to 1.5 ° C. By 2070, the region’s economy could grow by $ 9 trillion annually compared to a world with 3 ° C warming. This roughly equates to adding the economies of Japan, Australia and India to the region by 2070.
- Europe, meanwhile, can leverage a relatively low-cost transition to reap the benefits of becoming the world’s first carbon neutral region. Rapid decarbonisation can increase regional GDP by 1.8% in 2070 (equal to 730 billion euros) compared to the reference scenario of 3 ° C, a benefit that could increase in the following years thanks to Europe’s thirty-year low-emission industrial revolution. While the benefits would not immediately be as significant as in the Asia Pacific region, with an annual cost of 0.7% of European GDP through 2050, the benefits of proactive continental decarbonisation would outweigh the costs.
- Compared to the 3 ° C heating path, decarbonisation in North and South America in 2070 can increase regional GDP by 1.8%, or $ 1 trillion. The United States can raise $ 885 billion of this benefit, a dividend that would exceed the current combined annual revenues of Amazon, Alphabet and Microsoft. Given this advantage, it is in the economic interest of the United States to mobilize its influence to encourage global decarbonization.
The dimensions of the opportunity are clear. Indeed, the regions most exposed to the economic damage of uncontrolled climate change, such as Asia and the Pacific, are also those that have the most to gain from embracing a low-carbon future. However, the benefits of decarbonisation for each region can only be fully realized with coordinated and comprehensive climate action.
Reorient the global economy in the race towards Net Zero
Limiting warming to as close to 1.5 ° C as possible represents a rare once-a-generation opportunity to redirect the global economy towards more sustainable, resilient and equitable growth. It will be an industrial revolution of unprecedented speed and scale, which will require that existing frameworks be set aside in favor of a systems-based approach: extraordinary levels of collaboration and a synchronized transformation of multiple and interdependent systems. Taking concrete and collective measures to decarbonise the global economy can give a significant boost to the economies of many parts of the worldaccelerate growth and offer new job opportunities.
We can endlessly model, analyze and recommend climate action pathways, but each of us has a role to play in action and in accelerating change at all levels to combat the climate crisis and to bring about real and lasting change for our collective future.