A climate for investment

Clear policy signals, credible over the medium to long term, will help motivate the private investment which will drive down emissions. As understanding builds, people will increasingly demand a strong response from governments. Public discussion is itself a crucial ingredient of policy.

The Review finds that effective action to curb emissions could keep the cost of mitigation to around one per cent of global GDP every year. Crucially, on this basis, the world economy would continue to grow while the transition to a low carbon economy will open up exciting business opportunities, by raising demand for new products and financial services worth hundreds of billions a year.

In contrast, the evidence examined in this Review confirms that “business as usual” is not an option. Attempts to continue along the current unsustainable pathway will increasingly be thwarted as melting ice-caps, higher temperatures, heavier storms, longer droughts, more frequent floods and rising sea levels exert an ever heavier toll of wellbeing and lives. Ignoring the problem will undermine our standard of living, and eventually harm economic growth.

Alongside mitigation to reduce emissions, we also have to encourage adaptation, or action to limit the damage caused by the climate change already built into the global ecosystem by past emissions.

Eventually the world will run out of the carbon-based fuels that cause the problem. If we continue to use them on a ‘business as usual’ basis, however, the world will be irretrievably damaged well before they are exhausted. For this reason, the rapid development of carbon capture and storage technology is essential to reconcile the continued use of fossil fuels, particularly coal, with climate change objectives.

... contd.