Guest essay by Eric Worrall
This remarkable business opportunity will only be realised if it is funded by taxpayers and supported by carbon taxes.
The world economy could grow $26 trillion in a decade if governments and businesses focus on climate change
WILL MARTIN
SEP 5, 2018, 6:56 PM…
Bold action on climate change could add more than $US2 trillion a year to the global economy over the next decade, according to a major new report, which seeks to dispel the belief that tackling environmental issues will stifle economic growth.
The report from theGlobal Commission on the Economy and Climate (GCEC) on Wednesday argues that the world’s politicians and decision-makers are “significantly underestimating the benefits of cleaner, climate-smart growth.” It said the global economy could increase in size by $US26 trillion by 2030, if more ambitious steps are taken.
Former heads of government, business leaders, and economists are all part of the GCEC’s team, and have argued that the globe is at a crossroads, whereby it needs to fully commit to sustainable future growth, or see the earth suffer even more.
“There’s still a perception that moving toward a low-carbon path would be costly,” Helen Mountford, the lead author of the report said in an interview with Reuters. “What we are trying to do with this report is once and for all put the nails in the coffin on that idea.”
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Read more: https://www.businessinsider.com.au/global-commission-on-the-economy-and-climate-report-2018-9
From the energy chapter of the main report;
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Energy will account for just under a third of total core and primary energy sustainable infrastructure investment to 2030, or around US$1.7 trillion per year. Meeting a 2C scenario requires slightly more investment and large increases in spending on energy efficiency, at double current levels if not more, but this is offset by lower investment requirements for primary energy such as coal and oil. The investment challenge includes providing access to 2.7 billion people for clean cooking and to 1 billion for electricity. Making sure energy infrastructure is sustainable will not cost much more, but it requires shifting the way we invest. This shift requires supportive policies that reveal the value proposition of renewables and energy-efficiency investments and that level the playing field. Policymakers also need to spend better, with the right objectives and with the use of relevant metrics for success in dealing with sustainability. Essential policies include the reforming of fossil fuel subsidies, alignment of taxation and other policies offering financial incentives, raising and allocating public funds to sustainable infrastructure, and the smart use of limited public funds to attract private investment.
Previous analysis conducted for the Global Commission estimates that only half of the infrastructure investment required is currently flowing and about 70% of the spending gap is in emerging and developing economies. Both public and private investment will be needed. Overall, public infrastructure investment appears to be on the rise though it remains well below levels required to meet demand for infrastructure services. In developing countries, roughly 60% of infrastructure investment is from the public sector, while in developing countries it is only about 40%. On the private investment side, although the level of investment required is manageable on a macroeconomic basis, with enough global savings to cover the need, it has historically been a struggle to channel private finance to green energy infrastructure and energy-efficiency investment, especially in developing economies. The levels of returns and investment risks (real or perceived) have been key barriers to increased private investment. To address these common barriers and facilitate commercial investment, the G20 is advancing a ‘Roadmap for Infrastructure as an Asset Class’ which in turn should foster the development of infrastructure as a heterogeneous asset class.
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Public investment also needs to shift. In 2014, the public sector accounted for more than half of ongoing investment in coal-fired power, showing the need for more climate-consistent strategies in the power sector. Even with notable progress in phasing out fossil fuel subsidies in some countries, these were estimated to be an estimated US$373 billion in 2015 according to the OECD and International Energy Agency (IEA), well above renewable energy subsidies in 2015. This effectively creates a negative carbon price and disincentivises investment in clean energy alternatives. At the same time, the number of carbon pricing systems is growing, now covering over 70 jurisdictions and about 20% of global GHG emissions (see Section 1.A, Figure 4). Yet over 75% of emissions covered are priced at an effective rate of less than US$10 per tonne,49 far from US$40–80 per tonne by 2020 recommended as a floor price by the 2017 High-Level Commission on Carbon Prices. Absent consistent and sufficiently high carbon pricing, the risk-return proposition for investment in clean energy remains weak, and continued subsidies for fossil fuels raise the risks of stranded assets in the future.
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Read more: https://newclimateeconomy.report/2018/energy/
If this is such a remarkable business opportunity, why do governments have to get involved? Why does the “risk-return proposition for investment in clean energy remain weak”? Given the alleged falls in the price of solar panels and wind turbines, why are carbon taxes still seen as so essential?
Surely climate enthusiast Silicon Valley entrepreneurs and green Ivy League endowment funds can raise enough cash between them to get the ball rolling.
A string of trillion dollar climate business success stories would sweep aside all skepticism about the benefits of green investment.
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The way to goose the economy is to take money from people that earned it and give it to people who buy politicians.
Right.
Go tax FANG instead.
“What we are trying to do with this report is once and for all put the nails in the coffin on that idea.”
Oooooooooh! Missed it by that much!
HAHAHAHAHAHAHAHA!
Perhaps the UN could issue its own currency, then raising a cool trillion would be no problem.
The ECB and FED wit now QE4 and terrified to trim, are just spewing trillions. Probably outsourced from the UN.
What exactly is The Global Commission on the Economy and Climate, who pays them, and how well? The Report is totally devoid of any technical specifics. A bunch of parasites, maybe?
These people really don’t understand even basic economics.
Taxation constrains creation of value added products and true wealth.
Absolutely correct, but taxation empowers those who benefit from taxing others to say otherwise. And there’s the rub!
A Santa Barbara city councilman inadvertently let slip the primary purpose of progressivism in 21st century America.
The city recently criminalized the use of plastic straws. Speaking to that issue, Councilman Jesse Dominguez said, “Unfortunately, common sense is just not common. We have to regulate every aspect of people’s lives.”
As if those creating the regulations will employ common sense!
I am reminded of the “hanging chad” controversy of the 2000 presidential election in the US. Progressives called for a federal mandate to ensure that all voting was done using mark sense reader technology.
It was lost on these progressives that when the government chooses a technology, alternatives are frozen out. Had the federal government been in control of all precincts’ method of voting before 2000, ALL voting would have been by punch card. No precincts would have been able to switch to mark sense readers when that technology became available.
SR
Taking money away from the real productive sector by government taxation has never improved the economy. This is precisely why, when the left big costly governments have impoverished the economy, the right gets elected to turnaround double digit real unemployment and recessionary flat or declining growth. How do they accomplish this? By strongly chopping government employment and redundancy and slashing taxes -corporate and personal. It works every time and this lesson, it seems, cannot be learned.
It can be learned, but apparently not by those who reap rewards from their ignorance.
Mony spent or moved without doing work—creating real wealth—does not boost the global economy. One might as well flush it down a toilet.
You create lots of non jobs AND create more destructive climate police jobs which are turning inefficient government from just bad to a basket cases. Add that to wasting the skills and time of expensively trained engineers on worthless projects. That will do what exactly? Create wealth? Advance society?
With all the additionalCO2 in the atmosphere, my money tree is producing extra cash. I will use this to pay for my share of the carbon taxes.
Just another international socialist elite scam for wealth redistribution.
I often ponder the demand from the Left for the USA to spending trillions of tax dollars going to renewables while at the same time they demand we give trillions to third world countries. Meanwhile, another branch of the elite socialists movement wants worker bees to cough up trillions for universal health care, free college tuition, etc, etc.
As for those debating here today whether government expenditures economically benefit society, they do but an great inefficiency. For 20 out of thirty plus professional career I managed a government budget. When we attempted to go to “measurable outcomes” and connect those outcomes to cost our state government had significant problems and staff rebellion. First, most had an extremely hard time defining a single measurable outcome for their program. Second, even those that were responsible for their program budget had a hard time defining the total cost to obtain a given outcome once defined.
To give one a hint of what it cost for government to do its job consider just personnel issues. A individual full time employee with benefits cost our state, some states and the federal government are considerable more, 1.3 times their present salary, which might be as much as three times the base salary for the position. Not included in those benefits are the cost of a personnel disciplinary system, workmen’s compensation, unemployment compensation, training, office space & maintenance, transportation, travel, etc. Note even when travels is restricted to ground transportation it is the second largest cost besides personnel for most agencies. All of which are costs incurred prior to any productive activity, like producing a measurable outcome. Note all these same cost apply to university staff plus additional cost, like laboratory space, classroom, etc.
I could take any government budget and within 18 months cut the total cost and total personnel by at least 25% and no one would notice any difference in outcome to the public. During the 1990s I did it four years running.
Edwin for President!
Don’t forget the additional $32 Trillion the Left wants to spend for ‘universal health care’ (not counting the illegal immigrants they also want to cover), which provides no actual care.
Global commissions need global cash….by design
Correction: Global commissions need American cash.
and that’s why gore and obama got that peace prize.
it was the fluffing for an american reaming.
2020 is the target date for the global carbon tax push. That global Rahm Emanuel moment will be the revenue Spindletop they have been lusting over for years now. The Waxman-Markey bill was a good omen for the over reach style and the slush fund design aspects. It will be sold as a business-only tax and with many vote-buying features to protect the poor. Get ready. A storm is coming from the west.
Is it just me or do I see bare faced marxism we have always known to be there showing its ugly face in plain sight? Groups of suspicious scientists calling for world government etc. I do not believe in coincidences In this field. Too much bs and double speak for too long. Lord Monkton has pointed the finger at the root cause for a number of years
To be more precise it will increase the world economy $97 bagillion
Broken window fallacy!
As soon as all green subsidies are taken off the whole industry will collapse.
Is there a 97% consensus among economists on this?
Ths ignorance, it burns!!
Powering generators by burning the money directly in the furnace would be more cost efficient that the present generation of solar generators and wind farms, particularly at night in a wind lull.
Is there an example of an economy that has grown with an introduction of a tax on energy and production and a focus solely on climate change?
What planet do these people live on?
This is similar to the broken window fallacy. Some of the carbon taxes they collect might very well be used to subsidize a low-carbon path (after government siphons off their cut). But they don’t take into account the fact that the taxed individuals and businesses would have spent that money for other things, many of which would be more practical and valuable to the economy than what the government does with the money.
It’s like drilling more holes in your life boat to employ more water bailers… Taxes do not generate real GDP growth. Taxed dollars are taken away from those best equipped to use them in the most efficient way and given to those least equipped.
They will have trouble putting nails into coffins without the fossil fuels required to mine the metals required to manufacture the nails:
Most nails are made of steel. Aluminum, copper, brass, bronze, stainless steel, nickel, silver, monel, zinc, and iron are also used.
Read more: http://www.madehow.com/Volume-2/Nail.html#ixzz5QMvMvIUC