Search

How Climate Action Can Drive Our Economic Future

Updated: Aug 2

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 percent 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!


Asia Pacific losses due to climate inaction by 2070 - Bloom Impact Investing
Significant losses in Asia Pacific from Climate Inaction, in 2070

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).


Potential economic gain for Asia Pacific due to decarbonisation - Bloom Impact Investing
Potential economic gain for Asia Pacific due to decarbonisation

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.

Economic growth in the Asia Pacific Region if decarbonisation occurs
Economic growth in the Asia Pacific Region if decarbonisation occurs

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:

  • 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

Japan

  • 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.

South Korea

  • 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

  • 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 the production and sale of 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 Asia Pacific?

how to rapidly decarbonise Asia pacific
Modeled scenario where global warming is reduced to 1.5 degrees Celsius by 2050 and Asia Pacific's economy would thrive

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 economic growth engine of the world. 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 value for the economy and generating $47 trillion in just 50 years.


Sourced from: Asia Pacific's turning point - Deloitte, 2021


You can make an impact!


Do you want your money to work for not against nature? Then download the Bloom app and start using your investments to fight climate change.


Don't forget, you can also join the Bloom community if you want to learn more about sustainable investing We have an upcoming array of events where you can learn how to make a positive impact on your finances


The information on this website is prepared by Bloom Impact Investment Services Pty Ltd (ACN 651 965 098 AR 001294778), who is an authorised representative of Cache Investment Management Pty Ltd (ACN 624 306 430 AFSL 514 360) (Cache). Bloom’s financial products are issued by Melbourne Securities Corporation Limited (ACN 160 326 545 AFSL 428 289), as disclosed in the relevant PDS. All information provided in this article is general information only and does not take into account your personal circumstances, financial situation or needs. Before making a financial decision, you should read the relevant product disclosure statement and target market determination consider whether the product is right for you and whether you should obtain advice from a professional financial adviser.


95 views0 comments