The 2020s represent a “once-in-a-generation opportunity” for countries, companies and investors to scale zero-carbon industries that will stimulate growth, support more resilient economies and create millions of jobs, a newly released global report argues.
Titled ‘The Paris Effect: How the climate agreement is reshaping the global economy’, the report has been published by global consultancy SYSTEMIQ, a Certified B Corporation founded in 2016 to drive the achievement of the Paris Climate Agreement and the United Nations Sustainable Development Goals. B Corporations are for-profit companies that seek to use the power of business to solve social and environmental problems.
Since the 2015, the report states, the investment and deployment of low-carbon solutions has accelerated, underpinned by the growing competitiveness of low-carbon technologies and solutions, such as wind and solar in the electricity sector.
SYSTEMIQ estimates that low-carbon solutions are already competitive in sectors representing around 25% of global emissions and that, by 2030, such solutions could be competitive in sectors representing 70% of global emissions.
“The dynamics set in train since the Paris Agreement have created the conditions for dramatic progress in low-carbon solutions and markets over the last five years,” the report states.
With policy support, conditions could be created for various low-carbon solutions to move towards tipping points this decade, whereby they can out-compete legacy, high-carbon businesses.
“To capture this opportunity, countries need to deliver decisive action over the coming year, leading up to COP26 in Glasgow. Individually, countries can send unambiguous policy signals into the real economy through consistent, ambitious targets, regulation and fiscal incentives.”
Building towards net-zero economies by 2030, the report adds, stands to add over 35-million net new jobs globally, in sectors like renewable power, energy-efficient buildings, local food economies and land restoration.
Many countries and companies are beginning to move to capture the benefits, with 20 countries and the European Union having already made net-zero commitments and more than 100 others considering doing so, while more than 1 500 companies with combined revenues of $12.5-trillion have set net-zero targets.
“Countries that see the opportunity are taking steps to harness the power of reinvestment cycles to establish globally competitive players in new industries,” the report notes.
It adds, too, that the case for enlightened self-interest has never been stronger.
“Those countries, companies and cities that act decisively today will strengthen their own competitive prospects and will drive a real economy transformation that can deliver high-quality, lower-risk growth, jobs and returns.”
However, it also warns that most countries, particularly developing countries, are not moving fast enough, while some governments had decided to support existing industries in the wake of the unprecedented economic and employment shock that has accompanied the Covid-19 pandemic.
SYSTEMIQ argues that, while such actions are understandable, they are “ultimately unwise”.
“By failing to predict the pace of change, countries are making poor policy and investment decisions and wasting taxpayers’ money.”