Solving climate change could be the best bargain ever offered to humanity.
A number of studies have estimated that we should invest roughly $500 billion per year -- slightly less than one percent of global GDP -- in clean energy and solutions to climate change.
Why is this potential investment such an amazing deal? I will give you three reasons.
First of all, if we can replace fossil fuels, which are the main source of climate change, we will solve other problems as well. How many geopolitical problems -- such as terrorism, corruption, and autocratic rule -- are in part fueled by oil and the vast un-earned wealth it produces? Also, numerous health problems result from air soiled by smog and particulate matter, which are the non-greenhouse gas byproducts of burning fossil fuels. Every year millions of people die prematurely from this air pollution. One cannot put a price tag on life, but, some studies show that aggressively fighting climate change will largely pay for itself, because cleaner air will create fewer health problems. And all these benefits are in addition to whatever geopolitical solutions arise.
Second, even without these extra benefits, the cost of investing in solutions is far less than the cost of adapting to climate change. Although $500 billion dollars of investment per year is an enormous figure, it pales in comparison to the potential damages of climate change. Lord Nicholas Stern, one of the UK's top economists, has estimated that unmitigated climate change could damage the world economy by more than 5 percent, costing the world trillions of dollars per year because of droughts, storms, and rising sea levels.
Third, and perhaps most importantly, the $500 billion we need to spend per year is not wasted, but instead is an investment in next generation solar, wind, and electrical grids -- the technologies of the future. Regardless of health, climate, or geopolitical concerns, the world has a finite amount of coal, oil, and gas, and we must have alternative fuels. As scarcity of traditional fuels grows, prices increase. We are seeing this on a regular basis with oil, even now it is climbing back up toward $100 per barrel. We need to create choices to lessen demand to keep prices low. The companies and countries that develop cheap alternatives will be those with winning economies, with new jobs and economic growth. In fact, we are already witnessing the clean technology boom -- jobs in clean energy are growing faster than almost any sector, and clean technology will likely be the world’s third largest industrial sector by 2020.
Solutions to climate change will thus create health, geopolitical, and economic benefits -- in addition to avoiding climate change. This is an enormous deal for society. Unfortunately, global investments in clean energy are less then half what they need to be.
So, how do we spur this investment?
We need leadership from individuals, companies, and governments. We need governments to make it easier to invest, and we especially need companies to show their eagerness to make these investments.
At Climate Deal Day, we are attempting to encourage this investment. The "enormous deal" consists of countless smaller deals, such as companies investing in renewable energy projects or announcing major efficiency retrofits on buildings, or individuals around the world improving the efficiency of their homes and changing how they get to work.
The goal of Climate Deal Day is to help highlight and encourage these deals.
The first Climate Deal Day will be held on Jan. 26 during the opening day of the World Economic Forum in Davos, Switzerland. The World Economic Forum is a meeting of top business leaders, international political leaders, and intellectuals who come together to discuss the most pressing issues facing the world. During the Climate Deal Day event, representatives from companies will meet and make or announce climate deals. These deals can be in a number of different categories -- energy, transportation, forestry, and others -- and we encourage companies who will be in Davos to take part.
Too many people think of climate change and think of either 1) the disastrous consequences of global warming or 2) the "sacrifice" that they believe is necessary to avoid these consequences. Few think of opportunity or the possibility of a more prosperous, cleaner world. Yet thanks to the innovators and entrepreneurs, the creation of this better world is already underway, and through Climate Deal Day we will help showcase and encourage more climate deals to accelerate the improvement of quality of life for all of us.
If you have a Climate Deal that you would like to announce, you can do so on our website, ClimateDealDay.org, or through contacting us at deals[at]climatedealday.org.
Cross posted on ClimateDealDay.org.