Tilmann's Blogging
November 30, 2009
Climate change – An opportunity not to be missed
With a week to go for the beginning of the UN’s Copenhagen climate conference everything indicates that the summit will not produce the breakthrough deal that has been hoped for – despite the fact that getting serious on climate change is the only way for us to get out of the world’s twin economic and environmental crises. We desperately need a deal that puts humanity on a low carbon development path towards green development that would also let us steer away from major climate catastrophes. The basic obstacle: The perceived economic cost of a large-scale shift towards a low carbon world economy. It may be true that the required shift would represent a cost for some economic sectors that are inherently non-green, such as the fossil fuel power sectors. However, on a broader level, this is an ill-perceived view: It overlooks that apart from avoiding costly climate change, enormous economic opportunities lie in a transformation towards a green world economy.
More than a year has passed since the near collapse of the world’s financial system and the eruption of the global economic crisis. Governments of many countries swiftly responded by spending large sums of money to stimulate their economies, but the impacts of the crisis are still being felt. High unemployment is expected to continue in the US many other countries, private investment has not yet recovered and growth is low in many economies. However, if left unchecked, the economic impacts of climate change will dwarf the current economic problems, as the influential Stern Review and other reports have shown. Ambitious action on climate change is an opportunity that allows addressing both the current crisis and the future impacts of climate change. As a recent study by The Climate Group, a think tank, has shown, an ambitious global agreement in Copenhagen would not only reduce climate change but also lead to more economic development.
The logic behind this is simple: The stronger the agreement to reduce greenhouse gases, the more demand for green products will it create. From China to the US, from the EU to Brazil, economies worldwide have rapidly growing business sectors that develop and produce green goods and services. The stronger the agreement, the more will the companies involved have the incentive to expand and improve renewable energy technologies, more efficient use of energy in homes and offices, cleaner transport and many other clean technologies and services. While unfortunately, emissions of greenhouse gases are global – they contribute to climate change no matter where they are emitted – fortunately, the products and services to combat these emissions can be global as well. In our globalized world, these green products can be traded among countries. This fact greatly expands the benefit potential for firms in the green sector. Moreover, employment numbers would benefit as well: the UN’s International Labor Organization has found out that renewable energies are more labor intensive than traditional energy sources. It estimates that employment in renewable energies could increase from 2.3 million jobs globally in 2007 to 20 million jobs by 2030; Greening buildings in the EU and the US alone would create 2 million jobs; And the list goes on and on.
As mentioned, some companies and thereby employees stand to lose from ambitious climate policy. But the cited study by The Climate Group, also shows that the more countries participate in a global agreement, the lower can the price of carbon be that would allow us to protect the climate (pricing emissions of the greenhouse gas carbon dioxide is a strategy to induce less emissions of it). This in turn implies that if we have a truly global agreement, a more gradual but nevertheless massive economic transformation is feasible. This would allow more time for companies and employees to adapt while we still effectively combat climate change.
What some experts have called new diplomacy, for example negotiating such a global climate agreement, faces the challenge that not just governments but also other actors, particularly business and consumers, have to be involved if agreements are to be successful. Shifting the perspective from costs to profits makes this challenge surmountable. A basic insight from the so-called mutual gains approach, which is applied to advance complex negotiations, is that it is easier to reach an agreement if one increases the size of the pie to be shared by the participants of the agreement. The focus has to be on the large opportunities that come with fighting climate change.
The higher the number of countries and the more ambitious the climate agreement reached in Copenhagen, the more is there to be gained by companies and employees all around the world. This means high profits and millions of jobs. And the earlier individual countries start, the faster will they reap benefits and strengthen competitiveness compared to other countries, while laying the foundation for long-term economic growth. As the saying goes: In every threat there is opportunity – Copenhagen is a chance we should not miss if we want to resolve the multiple crises afflicting our planet.
I wrote this op-ed for the course Sustainable Development Policy, which I am taking with Professor William Moomaw at The Fletcher School of Law and Diplomacy, Tufts University.
More than a year has passed since the near collapse of the world’s financial system and the eruption of the global economic crisis. Governments of many countries swiftly responded by spending large sums of money to stimulate their economies, but the impacts of the crisis are still being felt. High unemployment is expected to continue in the US many other countries, private investment has not yet recovered and growth is low in many economies. However, if left unchecked, the economic impacts of climate change will dwarf the current economic problems, as the influential Stern Review and other reports have shown. Ambitious action on climate change is an opportunity that allows addressing both the current crisis and the future impacts of climate change. As a recent study by The Climate Group, a think tank, has shown, an ambitious global agreement in Copenhagen would not only reduce climate change but also lead to more economic development.
The logic behind this is simple: The stronger the agreement to reduce greenhouse gases, the more demand for green products will it create. From China to the US, from the EU to Brazil, economies worldwide have rapidly growing business sectors that develop and produce green goods and services. The stronger the agreement, the more will the companies involved have the incentive to expand and improve renewable energy technologies, more efficient use of energy in homes and offices, cleaner transport and many other clean technologies and services. While unfortunately, emissions of greenhouse gases are global – they contribute to climate change no matter where they are emitted – fortunately, the products and services to combat these emissions can be global as well. In our globalized world, these green products can be traded among countries. This fact greatly expands the benefit potential for firms in the green sector. Moreover, employment numbers would benefit as well: the UN’s International Labor Organization has found out that renewable energies are more labor intensive than traditional energy sources. It estimates that employment in renewable energies could increase from 2.3 million jobs globally in 2007 to 20 million jobs by 2030; Greening buildings in the EU and the US alone would create 2 million jobs; And the list goes on and on.
As mentioned, some companies and thereby employees stand to lose from ambitious climate policy. But the cited study by The Climate Group, also shows that the more countries participate in a global agreement, the lower can the price of carbon be that would allow us to protect the climate (pricing emissions of the greenhouse gas carbon dioxide is a strategy to induce less emissions of it). This in turn implies that if we have a truly global agreement, a more gradual but nevertheless massive economic transformation is feasible. This would allow more time for companies and employees to adapt while we still effectively combat climate change.
What some experts have called new diplomacy, for example negotiating such a global climate agreement, faces the challenge that not just governments but also other actors, particularly business and consumers, have to be involved if agreements are to be successful. Shifting the perspective from costs to profits makes this challenge surmountable. A basic insight from the so-called mutual gains approach, which is applied to advance complex negotiations, is that it is easier to reach an agreement if one increases the size of the pie to be shared by the participants of the agreement. The focus has to be on the large opportunities that come with fighting climate change.
The higher the number of countries and the more ambitious the climate agreement reached in Copenhagen, the more is there to be gained by companies and employees all around the world. This means high profits and millions of jobs. And the earlier individual countries start, the faster will they reap benefits and strengthen competitiveness compared to other countries, while laying the foundation for long-term economic growth. As the saying goes: In every threat there is opportunity – Copenhagen is a chance we should not miss if we want to resolve the multiple crises afflicting our planet.
I wrote this op-ed for the course Sustainable Development Policy, which I am taking with Professor William Moomaw at The Fletcher School of Law and Diplomacy, Tufts University.
Labels: Climate Change, COP 15, Economic Crisis, green economy
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The views of a European student at The Fletcher School/University of St. Gallen on current issues in international affairs, particularly related to sustainable development policy.
