How Climate Action Can Drive Our Economic Future
Updated: Nov 25, 2022
What is the cost of Climate Inaction?
The answer is simple: inaction on climate change negatively impacts economic growth compared to a world without any further climate change. The fight against global warming has been a long one and is now needed more than ever, first for environmental reasons, but also clearly for economic and prosperity reasons!
Today current economic projections do not account for climate change which portrays an unrealistic view of how businesses will proceed in the future. This also makes climate action look like a cost instead of an investment in the long run. Without any climate action, Asia Pacific is reported to lose 12% of GDP (US$16 trillion) in 2070, which is more than China's entire current economy (US$14 trillion).
As you can see, the economic impact of Climate Inaction is very significant!
Is decarbonisation the new economic engine?
Rapid decarbonisation will result in economic gains of roughly US$47 trillion for the Asian Pacific economy by 2070. Additionally, this would equate to GDP growth of 7.5% and a gain in economic output of US$9 trillion, which is equivalent to the entire current economies of Japan, India, and Australia in that year alone! The world will see a turning point in the levels of carbon emissions by 2035-2050, when significant regional decarbonisation will be achieved (Deloitte, 2021).
A new economic climate
The world is at a turning point: action or inaction.
Taking bold climate action can create gains; inaction will cost the world trillions.
Source: Deloitte Economics Institute
The Asia Pacific region can export decarbonisation to the world
As the economies of Asia Pacific decarbonise, they have the opportunity to share the key technologies, approaches, and expertise to accelerate the global shift to a low-carbon future, thus opening up new economic opportunities for businesses in the region.
India is home to the world’s largest solar park
The biggest floating solar power plant—with a capacity of 100 megawatts—is expected to become operational in Telangana in 2021
The number of Japanese cities and local governments committed to reaching net zero emissions by 2050 has risen to over 200, representing a population of over 90 million.
In the past decade, South Korea has seen rapid growth in exports of lower-emission or “green” products
The South Korean Government has planned to construct the world’s largest offshore wind farm, with a maximum capacity of 8.2 gigawatts by 2030
South Korea is also aiming to become the world’s largest producer of hydrogen-powered vehicles and fuel cells by 2030
China is the largest global exporter of renewable energy products.
In 2020, China opened the second-largest solar farm in the world, with a capacity of 2.2 gigawatts.
China is also the world’s leader in producing and selling electric vehicles.
The region’s two largest economies, China and India, are both particularly well placed to quickly develop future green and low-emission capabilities. Asia Pacific has the economic fundamentals to increase its green export trade ratio—and the types and volume of low-emission products it can competitively export. There is 3X faster manufacturing growth in Asia Pacific compared to the rest of the world.
How to rapidly decarbonise the Asia Pacific?
Source: Deloitte Economics Institute D.CLIMATE Model
Accelerate to zero
The Asia Pacific region has made great strides in its development and growth over the past 50 years and is now equipped to be the world's economic growth engine. It is the world's biggest source of labour, know-how and the driver of global trade.
If we act now, we can gain significant comparative and competitive advantages, claiming new economic value and generating $47 trillion in just 50 years.
Sourced from: Asia Pacific's turning point - Deloitte, 2021
You can make an impact!
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