Clean global economic growth now ‘within reach’

Halting global warming without denting economic growth can be done more easily than many companies and governments realise, a report from 28 chief executives, economists and political figures shows.

Volatile oil prices, plummeting renewable energy costs and other global trends have set the stage for economies to cut greenhouse gas emissions and keep growing, the study says.

Up to 96 per cent of the emissions cuts needed to prevent risky global warming could be achieved by 2030 if the report’s recommendations for governments to collaborate more and build on these trends are implemented, the authors say.

“Today’s report shows us that a goal we once thought of as distant is within our reach,” said Felipe Calderón, the former president of Mexico and chairman of an international panel that commissioned the study. “We can achieve global prosperity and secure a safe climate.”

This idea runs counter to the conventional view that it is too expensive for many developed countries — let alone developing nations — to tackle climate change.

The report argues that recent developments now challenge such views — including dramatic falls in the cost of renewable energy.

Globally, the cost of solar power systems has fallen by 75 per cent since 2000, while energy storage costs have dropped by 60 per cent in the past decade.

This means solar power is becoming competitive with fossil fuels in a growing number of countries, the report says, and a similar effect is being seen with wind power.

At the same time, the recent fall in oil prices has spurred several countries to accelerate reforms of fossil fuel consumption subsidies that were estimated to total $548bn in emerging and developing economies in 2013.

We can achieve global prosperity and secure a safe climate

While crude prices are not necessarily going to stay low, the report argues that it is likely they will remain volatile, increasing the attractiveness of cleaner energy systems that are more resilient to such swings.

Meanwhile, global carbon dioxide emissions from burning fossil fuels for energy remained flat in 2014, even though the world economy grew. This may not be a permanent trend, but the report suggests it is a “positive sign” that emissions can fall as gross domestic product rises.

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The report, which is timed to influence debate as governments work on finalising an international climate change agreement in Paris in December, acknowledges that much more needs to be done to create the “decisive shift” required both to grow and decarbonise the global economy.

But one of the report’s authors, Michael Jacobs, said it was clear that the pledges countries had been making for the Paris agreement so far did not fully reflect the possible gains available that were also in countries’ economic self-interest.

“Our numbers show there is more potential out there,” he told the Financial Times.

To achieve such gains, the report urges cities and countries to work more collaboratively on measures such as raising energy efficiency standards, cutting aircraft and shipping pollution and boosting investment in clean energy.

Investing in energy efficiency could boost cumulative economic output globally by up to $18tn by 2035, it says.

The study points to simple measures that have already been shown to produce significant energy efficiencies, such as polishing ships’ propellers more often.

One company, for example, has found that a fouling-resistant hull coating on a bulk cargo vessel at a cost of $360,000 saved about 5,400 tonnes of fuel over nine years — a 22 per cent efficiency improvement.

Higher shipping efficiency standards could save an average of $200bn in annual fuel costs by 2030, the study estimates.