Study: Clean energy makes economic sense

Analysis takes a new tack by showing benefits of investment

Investments to help fight climate change can spur economic growth, rather than slow it as widely feared, but time is running short for a trillion-dollar shift to transform cities and energy use, an international report said on Tuesday.

The study, by former heads of government, business leaders, economists and other experts, said the next 15 years were critical for a bigger shift to clean energies from fossil fuels to combat global warming and cut health bills from pollution.

"It is possible to tackle climate change, and it is possible to have economic growth at the same time," Felipe Calderon, head of the Global Commission on the Economy and Climate and former president of Mexico, told a news conference. Many governments and businesses fear that measures to slow climate change will undermine jobs and growth, but they are wrong, he said.

Unlike past climate change studies, which have focused on the risks of inaction, the new study seeks to show the economic benefits of environmentally friendly investments. The report was prepared as a guide for world leaders at a Sept 23 climate summit hosted by UN Secretary-General Ban Ki-moon.

Almost 200 nations are working on a UN pact, expected to be concluded in Paris in late 2015, to rein in rising greenhouse gas emissions. Progress to combat global warming has been slow despite two decades of work.

"How the world's largest and fastest growing cities develop will be critical to the future path of the global economy and climate," the report said, recommending investment in public transportation and a shift to "compact cities" that use less energy.

Cities are home to half the planet's 7.2 billion people, generating 80 percent of global economic growth and accounting for about 70 percent of energy-related greenhouse gas emissions, it said. But many urban areas are sprawling out of control.

The report said the next 15 years were vital because the global economy will grow by more than half, a billion more people will live in cities and new technology will change both business and everyday life.

A UN panel of experts says swift action is needed to avert more heat waves, floods, droughts and rising seas. It says it is at least 95 percent probable that human activities, rather than natural swings in climate, are the main cause of trouble.

Overall, the Commission said that $90 trillion in investment is needed in the next 15 years to maintain a high-carbon model of infrastructure for cities, transport, energy and water systems - an average $6 trillion a year.

A shift to low-carbon energy, such as wind or solar power, and greener cities would cost a further $270 billion a year - a 4.5 percent increase in the bill that could be offset by other savings, for instance on fuel.

"Investing in a low-carbon economy is a cost-effective form of insurance against climate risk," it said.

The existing model has serious drawbacks, the report said, citing the cost of air pollution at 4.4 percent of the globe's gross domestic product, with a high of more than 10 percent of GDP in China.

Jeremy Oppenheim, who directed the report, said China and other emerging nations had grown aware of the risks of coal-based growth and fast-expanding cities.

"Things are very different even compared with five years ago," he told Reuters.

In rich nations, inefficiencies still abound in cities such as New York, London or Paris. "Twenty percent of fuel costs in cities are spent looking for parking spots," he said.

(China Daily 09/17/2014 page10)