A few years ago Citibank released a report which showed that global action to fight climate change would be cheaper than simply continuing on a business as usual path. The savings on investment costs alone were only $2 trillion BUUUUT when you factor in the avoided costs of inaction (ie. the cost of damages from climate change that are avoided) the savings were closer to $34 trillion (based on avoiding 2.5 degrees of warming)!
With those kinds of savings you’ll be asking yourself why we’re not jumping at the chance to invest in climate action and renewable energy. Indeed the Citibank report did exactly that wondering “Why would you not?”. As this Guardian article by Dana Nuccitelli explains, coal companies stands to lose a lot of money, a lot of it already invested in assets, with the switch to gas and renewables. That’s why they’ve been using their sizable resources and influence over governments to sew doubt about climate change and hold back support for policies that price carbon and support renewable energy.
A report released this week by the World Bank’s International Finance Corporation ahead of the UN’s COP 23 climate conference next week suggests that global private investment holds the key to helping countries meet their Paris pledges to reduce carbon emissions and keep warming under 2 degrees.
As IFC chief executive Philippe Le Houérou said in the Guardian: “We can help unlock more private sector investment, but this also requires government reforms as well as innovative business models, which together will create new markets and attract the necessary investment.” These reforms involve, you guessed it, unpicking support for incumbent fossil fuel companies.
The scale of investment needed in low-emissions technology for the world to stay under 2 degrees of warming though is considerable according to recent analysis from the Precourt Institute for Energy at Stanford – triple what is currently being invested, or $2.3 trillion a year to 2040. That’s a lot of money that needs to be unlocked. But if coal companies get out of the way and government works with business to do what’s needed we all stand to benefit and more than just economically.