Page 7 - AsiaElec Week 02 2023

AsiaElec COMMENTARY AsiaElec

Green transition is $10.3 trillion

opportunity for global economy

by 2050, new report finds

GLOBAL New green industries could be worth $10.3 tril- mid-century could actually save the world at
lion to the global economy by 2050, equivalent to least $12 trillion, compared with a scenario in
5.2% of global GDP that year, finds a new report which current levels of fossil fuel use continue,
by Arup and Oxford Economics. says the study.
The green transition is often seen as a cost, but A decarbonised energy sector would not only
the report demonstrates the substantial benefits result in lower energy system costs than a fossil
and the need to move quickly to capture them. fuel system – by ramping up solar, wind, batter-
Investment in green technologies, exper- ies, electric vehicles (EVs) and clean fuels such
tise and renewable energy sources is crucial to as green hydrogen – but it would also provide
addressing urgent climate challenges, say the more energy to the global economy and expand
authors in Global Green Economy, Capturing energy access to more people internationally.
the Opportunity. “There is a pervasive misconception that
“Transitioning to a green economy is an inev- switching to clean, green energy will be painful,
itable end game for all countries, and many have costly and mean sacrifices for us all – but that’s
already started their journey,” notes the report. just wrong,” said Professor Doyne Farmer, the
The report highlights ways innovation and mathematics professor who led the research at
strategic policymaking can address existential the Institute for New Economic Thinking at the
issues for the planet in a way that also builds Oxford Martin School.
broad prosperity and social well-being. Climate Oxford Economics even found that a failure
change is clearly an existential issue, with even a to act could dent global GDP by some 5% by
1.5-degree Celsius rise in average temperatures mid-century. In 2021, the researchers estimated
seen as leading to devastation. that the cost of weather-related interruptions to
“As economists, we have to be honest about economic activity had already reached $233bn.
the fact that mitigating climate change will be “This report shows the green transition is
expensive,” said Oxford Economics’ chief exec- not a burden on the global economy, but a sub-
utive, Adrian Cooper. “But the transition to a stantial opportunity to bring about a greater and
carbon-neutral global economy also presents more inclusive prosperity,” said Arup’s global
compelling opportunities.” strategy skills leader, Bryce Richard.
New green industries – carbon-neutral Meanwhile, a second report by Arup and
goods, such as renewable-energy facilities, as Oxford Economics issued the same day on car-
well as services – are an essential part of reaching bon prices found that they must rise higher as
the Paris Agreement net-zero target. climate ambitions rise.
“This includes the direct contribution to GDP While carbon prices historically have been
of electric vehicles manufacturing, renewable low and limited, this should change with rising
power generation, clean energy equipment man- climate ambitions, say the researchers. Coun-
ufacturing, renewable fuels and green finance; tries with established carbon markets and ambi-
plus the activity supported across global supply tious climate agendas will take the lead, they
chains,” said the report. continued.
Indeed, former Bank of England governor Norway is expected to have the highest
Mark Carney has said that a net-zero emissions effective price among European nations, reach-
future will allow banks, fund managers and ing $212/tonne of carbon dioxide equivalent
insurers to invest in private sector plans – and (tCO2e) in 2030. Elsewhere, Canada is estimated
profit from the “greatest commercial opportu- to have an effective price of $93/tCO2e by 2030.
nity of our time.” Meanwhile, the effective carbon prices of China
And a peer-reviewed study using proba- and the US – the two biggest polluters – will
bilistic cost forecasts by University of Oxford barely break $30/tCO2e in 2050.
researchers, published in 2022, found that tran- In the absence of stated policies, other
sitioning to a decarbonised energy system by economies like India and Saudi Arabia are not

Week 02 10•January•2023 www. NEWSBASE .com P7