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www.Corp2020.com @Corp2020
The Economics of Climate ChangeA Case for Urgent Action
Pavan SukhdevFounder & Author, Corporation 2020
Study Leader, TEEBUNEP Goodwill Ambassador
Global Environment FacilityScientific and Technical Advisory Panel
20 March 2013
www.Corp2020.com @Corp2020
The Greatest Challenge
Scientific Assessment for the GEF by STAP team: Climate change is “one of the single greatest challenges – perhaps the greatest challenge – facing humanity” (Nov 2012).
“We have it in our hands to overcome these problems through sound policy, collaborative behaviour, a more far-sighted approach to the consequences of our action, and the processes of discovery about technology, organisation and policy.” –Sir Nicholas Stern, in foreword to Corporation 2020
“[W]hat we do in the next 10 or 20 years can have a profound effect on the climate in the second half of this century and in the next.” –Stern Review of the Economics of Climate Change
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What will it cost?
Stern Review (2006): “If we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more.”
“In contrast, the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change [stabilizing between 500 and 550ppm CO2e] – can be limited to around 1% of global GDP each year.”• Range is: –1% (net gains) to +3.5% of GDP
In 2008, Stern revised his estimate up to 2% of global GDP. And earlier this year, he said that, in contrast to the 2006 report, which said that there is a 75% chance of 2-3 degree rise, he now believes we are “on track for something like four.”
We already see 400,000 premature deaths/year from climate change, costing $1.2 trillion, or 1.6% of global GDP.
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Summary: What will it cost?
•Stern: 2% of GDP = $1.4 trillion/year• International Energy Agency: $38 trillion over 25 years•World Economic Forum: $500 billion/year•UNEP: $1.05 to $2.59 trillion/year to meet MDGs and IEA “Blue Map
Scenario”. T-21 model scenario used = $1.3 trillion
•Reasonable estimate: $1.5 trillion/year
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How much money is available?
Millions of $. Cumulative since 2003. Pledged donations. Fund to Fund Transfers Excluded. Data from http://www.climatefundsupdate.org/global-trends/size-spending
Fund AmountJapan's Fast Start Finance $15,000
UK's International Climate Fund 4,640Clean Technology Fund (CTF) 2,849
Norway's International Climate and Forest Initiative 1,608Germany's International Climate Initiative 1,082
GEF Trust Fund (GEF 5) 1,077GEF Trust Fund (GEF 4) 754
Least Developed Countries Fund (LDCF) 540Pilot Program for Climate Resilience (PPCR) 525
Global Climate Change Alliance (GCCA) 385
Scaling Up Renewable Energy Program (SREP) 277Special Climate Change Fund (SCCF) 259
Australia's International Forest Carbon Initiative 216Forest Investment Program (FIP) 206
Forest Carbon Partnership Facility - Readiness Fund (FCPF-RF) 180
Global Energy Efficiency and Renewable Energy Fund (GEEREF) 170Adaptation Fund (AF) 136
Forest Carbon Partnership Facility - Carbon Fund (FCPF-CF) 122MDG Achievement Fund 90
Amazon Fund 33UN-REDD 27
Indonesia Climate Change Trust Fund (ICCTF) 21Green Climate Fund (GCF) 6
Total: $30,201
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www.Corp2020.com @Corp2020
74.9%
7.1%
5.5%
12.5%
U.S. Gross Value Added
Private Business
Households
Nonprofit institutions serv-ing households
Government
Total = GDP (US$14,526.5 billion)
From Macro to Micro: Why the transition to a “Green Economy”
needs evolution to “Corporation 2020”
2010 data. Source: U.S. Bureau of Economic Analysis
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Micro-Policy Reforms to Make Business Deliver
a Green Economy
Source: “Why Corporation 2020?”, Island Press, 2012
Resource Taxation : Taxing the “bads” more & taxing the “goods” less
Limiting Leverage : Introducing rules & limits to govern financial leverage
Accountable Advertising : Making advertising responsible & accountable via norms & standards
Disclosing Externalities : Measuring & disclosing all major corporate externalities (+ve & -ve)
Read more at: www.corp2020.com
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Thank You !
Pavan Sukhdevwww.Corp2020.com
Founder & Author, Corporation 2020Study Leader, TEEB
UNEP Goodwill Ambassador