Communities everywhere continue to experience record-breaking climate impacts — from deadly wildfires to devastating storms. These effects will only worsen without greater climate action. Luckily, the world has a plan to act on the science: the Paris Agreement. Nearly four years ago, 195 countries adopted the Paris Agreement, a historic, global action plan to tackle climate change. The agreement gives the world a framework for avoiding dangerous impacts of climate change by “limiting global warming to well below 2°C and pursuing efforts to limit it to 1.5°C.”
There are many reasons why nations should double-down on this action plan. It’s essential for igniting — and protecting — progress across the Sustainable Development Goals (SDGs), including for human health, ecosystems, security, and more. But some of the more controversial discussions, particularly in the United States, center on the economy. As every other nation in the world stays in the Paris Agreement, the U.S. administration is in the process of withdrawing.
Here are 6 reasons why the Paris Agreement is good for economies:
1. Climate action could produce $26 trillion globally in economic benefits. We are vastly underestimating the economic benefits of climate action, according to a recent report from the Global Commission on the Economy and Climate. Transitioning to a low carbon economy could generate $26 trillion globally in economic benefits through to 2030. The report looked across five sectors: energy, cities, food and land use, water, and industry. Ambitious action across all these areas could deliver net gains compared with business-as-usual.
2. The Paris Agreement can create 24 million new jobs. According to a report by the International Labor Organization (ILO), action on the Paris Agreement can create 24 million new jobs by 2030 with the right policies to promote a sustainable and just economy in place. The job opportunities generated by states in the U.S. Climate Alliance, a group of 25 governors dedicated to meeting the targets of the Paris Agreement, set a clear example. Michigan, which joined the alliance in February 2019, boasts over 120,000 clean energy jobs and saw the largest clean energy job growth in the midwest from 2017 to 2018.
3. Climate-related disasters cost nearly $2.3 trillion over the past two decades. Ambitious action now can avert costly impacts later. Climate-related disasters accounted for about 90% of the more than 7,000 major disasters between 1998 and 2017 — most of them floods and storms. These economic losses totaled nearly $2.3 trillion, according to a report by the UN Office for Disaster Risk Reduction, with the U.S. bearing the biggest economic losses. Without action, these disasters will continue to worsen, threaten lives, and disrupt progress on the SDGs. This reality is especially dire for vulnerable countries, like low-lying island states, on the front lines of hurricanes and sea level rise.
4. Air pollution poses a huge financial burden. According to the World Health Organization (WHO), air pollution is responsible for more than 7 million premature deaths every year — that’s more than many other health risks, including malnutrition, alcohol use, and physical inactivity. And that burden adds up. In terms of costs, air pollution takes a heavy toll on the global economy: More than $5 trillion every year in welfare costs and $225 billion in lost income. Most climate mitigation policies would reduce many of the same pollutants that cause air pollution, thereby creating win-win-win solutions for health, climate, and economy.
5. We are subsidizing the fossil fuel industry to the tune of $5 trillion. The International Monetary Fund (IMF) estimates that the fossil fuel industry received $5.2 trillion in global subsidies in 2017. IMF defines “subsidies” in terms of both direct financial support to fossil fuel companies from governments and the hidden costs we all pay from fossil fuels, like damages from air pollution and climate change. As UN Secretary-General António Guterres described at the R20 Summit, subsidizing the fossil fuel industry basically means spending taxpayers’ money to “boost hurricanes, to spread droughts, to melt glaciers, to bleach corals: to destroy the world.” Further, countries that heavily subsidize fossil fuels and not clean energy sources give fossil fuels an unfair advantage in the marketplace.
6. Investors are sending a clear message: Act now. Ahead of the 2019 UN Climate Action Summit, a group of 515 investors managing assets worth $35 trillion — controlling nearly half of the world’s invested capital — urged leaders to act the climate crisis with the “utmost urgency.” These investors, which represent the world’s biggest pension funds and asset managers, understand that climate change threatens stability in our societies, economies, and environment. Many companies too — including 87 businesses committed to reducing emissions in line with the 1.5°C target — understand that our best path forward is the Paris Agreement.
These six reasons do not capture all of the evidence why the Paris Agreement is beneficial for economies, but it’s clear: Climate action under the Paris Agreement can drive sustainable economic growth.
And if that wasn’t reason enough for action, leaders should also step up climate efforts because lives and livelihoods are on the line, 1 million plants and animals are at risk of extinction, and ultimately, solving the climate crisis could be our biggest opportunity to create a more just, sustainable world for all.
If you live in the U.S., encourage your governor to step up climate action and join the U.S. Climate Alliance.
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