Our key takeaway: We have no time left: “delay is dangerous”, according to a WEF White Paper. We need to act jointly, urgently and at scale to create a new approach to growth and development. This includes prioritising navigating through current global shocks and ensuring long-term resilience; tackling inequality and insecurity through new, more inclusive economic models; and embarking on an urgent transformation towards greener, more attractive growth. But this can only happen if certain pieces of the jigsaw puzzle come together: we need ‘a big push’ on investments, innovation and policy to move us forward. We need capital investments to happen today. We need to significantly accelerate progress in bringing key new technologies to market in time (i.e. advanced batteries, green hydrogen, sustainable bioenergy, and carbon capture, utilization and storage (CCUS)). And we need supportive policies which includes carbon pricing and prioritising a just transition, without which we cannot achieve social acceptance of the necessary socioeconomic transformations ahead.
World Economic Forum (WEF) with the Grantham Research Institute on Climate Change, LSE published a White Paper: ‘A New Era for Investment, Finance and Internationalism: Action Now to Deliver a Sustainable, Resilient and Inclusive Future’ (May 2022):
- “Delay is dangerous”: The authors highlight that “[t]he need to move to a new growth model that better aligns with societal and environmental objectives has never been more urgent, as the world grapples with increased inequality and polarization and accelerating environmental degradation.” In response, the paper underscores “the need to act jointly, urgently and at scale to create a new approach to growth and development. We have little time, both because economies are living through multiple shocks and because the crucial direction in which we need to head in the long term starts with the capital that must be put in place today. Delay is dangerous.”
- Building resilience; tackling inequality and insecurity; and transforming for greener growth: The white paper describes three priorities, the first one being “[n]avigating through current global shocks and ensuring long-term resilience.” Vaccine policy is both economic policy, and social policy, and “to succeed against the virus anywhere we must get it under control everywhere.” Therefore, it “remains vital to achieve global vaccination targets.” It is also imperative to bring the war in Ukraine to an end in light of the humanitarian crisis created by global energy and food shocks. The second priority is “[t]ackling inequality and insecurity through new, more inclusive economic models.” The paper highlights that “[t]here has been a societal split: between those, better educated and better off, for whom the system is working and who trust it, and those for whom it isn’t and who don’t. We all have a role to play - whether as a company, government or civil society, to “tackle the sources of inequality and insecurity.” This includes seeking to “rebuild a social contract through lifelong learning models, protecting people rather than jobs and rebalancing the burden of the care economy; level access to education and health; reassess the progressivity of fiscal policies; and follow through on the stakeholder approach to business.” The third priority is “[e]mbarking on an urgent transformation towards greener, more attractive growth.” WEF highlights the contributions of COP26, including forging “a common understanding that global warming must be kept below 1.5°C”; creating “momentum around goals and targets, with 90% of global emissions now covered by mid-century net-zero targets”; and embracing the importance of “adaptation, resilience and biodiversity.” At the same time, “we must shift the terms of the debate.” Target-setting “now needs to connect with near-term action to be credible.” We need a new growth model, one which is focused not on “obligation but opportunity, not costs but capital.”
- A big push on investments, innovation and policy: The authors underscore that “[a] positive agenda is required, centred around a big push on investments, innovation and policy frameworks (both national and global) that align markets with the just transition that we need to move to net zero while creating rising living standards and more inclusive societies.” In particular, “[t]he future of people and the planet will be shaped by the capital investments made over the next 10–20 years.” When it comes to innovation and systems transformation, “[t]he Paris Agreement had a pivotal role in providing long-term direction for companies wishing to invest and innovate; it created the conditions for industries to move towards tipping points at which low-carbon technologies can outcompete high-carbon businesses.” The paper describe the immensity of the potential: “by 2030, low-carbon solutions could be competitive in sectors accounting for nearly three-quarters of emissions, compared to one-quarter today (electricity) and no sectors only five years ago. The manufacturing of renewables, clean fuel and storage solutions will by 2050 match the size of the global oil market today – but offer far more jobs and skills.” However, we need to accelerate progress, in particular in bringing “key new technologies to market in time – solutions such as advanced batteries, green hydrogen, sustainable bioenergy, and carbon capture, utilization and storage (CCUS).” This is key, because “[a]lmost half of the annual CO2 emissions reductions required to reach net zero by 2050 will come from technologies that are currently in the prototype or demonstration phase.” Finally, the “[a] big push on investments and innovation requires supportive policy” which includes carbon pricing, and prioritising a just transition. “The move to a net-zero economy must be, and must be seen to be, just, fair and inclusive, contributing to a decline in inequality and ensuring that the benefits and opportunities of the shift are shared widely, while helping those most affected by economic losses. Taking appropriate actions to support a just transition will lead to greater social acceptance of the necessary socioeconomic transformations. It will also be important to tackle inequalities between countries, and particularly to ensure that low-income and fragile states are not left behind.” The paper concludes with a description of the new global and collaborative architecture for green development financing post-Glasgow, which includes country mobilization platforms, private finance, official finance, philanthropy and voluntary carbon markets.