Business-as-usual inaction on climate change could cost the world’s economy US$178 trillion by 2070, while a concerted and collaborative global push for net-zero could see $43 trillion in economic growth over the same period, says a new report from the Deloitte Center for Sustainable Progress.
Released during the World Economic Forum’s annual meeting last week in Davos, Deloitte’s Global Turning Point Report warned that a collective failure to rein in global heating could produce a 7.6% cut in global GDP by 2070, reports Environment + Energy Leader. The loss of wealth will translate into acute suffering for those least buffered from climate impacts, including scarcity of food and water.
But that future is not yet certain. Analyzing 15 “geographies” in the Americas, Asia Pacific, and Europe, the report found that “if global leaders unite in a systemic net-zero transition, the global economy could see new five-decade gains of $43 trillion—a boost to global GDP of 3.8% in 2070.”
Urgently needed to achieve such gains, however, will be “extensive coordination and global collaboration throughout industries and geographies.” Government collaboration with the finance and technology sectors will be particularly important, the report states.
A critical early step in the global decarbonization process, according to the report, will be to unite public and private sector in building the frameworks and policies that will “drive actionable change.”
Next, the report foresees structural changes in the global economy as both businesses and governments invest in low-emissions industries, leading to the “turning point” moment when “the benefits of a net-zero transition begin to outweigh the costs—and ultimately drive regional net-positive growth and value.” That moment will arrive at different times in different parts of the world, depending upon factors like existing governance structures, exposure to climate risks, and “marketplace strengths”, Deloitte says.
Cautioning that “no two paths to net zero will be the same,” the report projects that while the Asia Pacific region will begin to experience the benefits of a low-carbon transition before 2030, Europe will not see returns on its investment until the 2050s. With the necessary global cooperation and regulation, however, all geographies will experience their “turning point” by 2070.
Beyond this point, the fourth and final stage of global decarbonization will be realized when “interconnected, low-carbon systems underpin a clean economy that grows at an increasingly faster rate than its carbon-intensive alternative,” Deloitte says.