Davos: World leaders at WEF told $700 billion green investment 'insignificant' compared to global climate change costs
- 22 January 2013
DAVOS: A report presented at the World Economic Forum in Davos yesterday, states that the world must spend US$700 billion a year on green investments to meet global energy demand and avert the enormous economic damages that unrestrained climate change will cause.
The Green Investment Report says that of the US$5 trillion investment needed in infrastructure to meet the towering demands of economic growth, about US$700 billion a year of this must be in investments such as clean technology, greener infrastructure and energy efficiency to avoid dangerous climate change.
Presented to some of the world’s most powerful people at the World Economic Forum in Davos, Switzerland, the report is put together by the Green Growth Action Alliance (GGAA), a group which includes Accenture, Bloomberg New Energy Finance, the Climate Policy Initiative, HSBC, and the World Economic Forum itself.
It admits that while green investment costs are steep in the short term, the estimated US$700 billion a year is an insignificant cost when compared to the damages to global economies that climate change could cause. Authors write: "The incremental costs of greening growth are insignificant compared with the costs of inaction."
The report states that the climate change crisis is an investment opportunity that could drive much needed employment and community benefits, stating that global investment in clean energy in 2011 was up 17%, to US$257 billion.
One example highlighted in the report is the World Bank’s US$6 billion in climate technology funds. For every public dollar invested, US$8 in co-financing was attracted.
Former President of Mexico Felipe Calderon, founder of the GGAA, writes in the foreword: “Economic growth and sustainability are interdependent, you cannot have one without the other, and greening investment is the pre-requisite to realizing both goals. […]Development needs to be greened by re-evaluating investment priorities, building capacity, investment-grade policies and improving governance, among other activities.”
To rapidly steer private finance into clean energy investment and tackle the climate challenge, the report offers four recommendations:
- G20 leaders must renew their commitment: that green growth is the only route to sustainable economic growth. They must also report on progress in leveraging private investment.
- Governments must accelerate efforts to phase out fossil-fuel subsidies, enact long-term carbon price signals, enable greater free trade in clean technologies, and expand investment into climate adaptation.
- Public finance agencies must increase efforts to drive private capital into green infrastructure.
- Private investors must use investor forums and expand partnerships with public agencies to advance and adopt new financing solutions.
Luc Bas, Director of European Programs and International States and Regions, The Climate Group, said: “A clean revolution: the upscale of clean technology and energy innovation, investment and deployment is key. But it will also need to go hand in hand with a fundamental change in our consumption and production patterns to be able to meet the demands of the 9 billion people that will be on our planet by 2050.”
Learn more about The Climate Group's Clean Revolution.