Once in a generation

The cost of investment in climate change adaptation is small change compared with the cost of inaction, writes Achim Steiner, Executive Director, United Nations Environment Programme and Under-Secretary General, United Nations
The G20 Antalya Summit was only the 10th meeting of the G20 members, but it will probably be the most important one to be held in my lifetime. Coming on the heels of the historic Agenda 2030 agreement, which acknowledged the integral role of the environment in virtually every aspect of global health and prosperity, the Antalya Summit offered the last opportunity to build the momentum and commitment to deliver an equally historic agreement at the United Nations Climate Change Conference in Paris.
Climate change is an unprecedented environmental phenomenon with dramatic implications for every aspect of social well-being, economic development, security and stability. With the complex issues surrounding climate change so thoroughly woven into the fabric of everyone’s lives, the solution must be too. That means transforming to a more inclusive, sustainable green economy and transferring adequate, available funding to help the most vulnerable countries deal with the consequences of climate change that are already taking effect.
The current socio-economic model of consumption and waste is an inefficient, carbon-intensive mechanism that excludes many and benefits few. The bottom 40% of the population shares less than 4% of the global gross domestic product (GDP), much of which comes from small-scale farming around coastlines or on the edge of forests.
However, we can reverse such trends, not necessarily by investing more, but rather by investing more wisely. Today’s infrastructure, technology and finance choices offer an unprecedented opportunity to rapidly redeploy global investment.
The G7 members have already pledged to mitigate climate change and decarbonise their economies, but the laws of science and nature are not restricted by the laws of international politics. So, action on climate change needs to be a global effort. Tackling the two biggest emitters of greenhouse gases – energy and land use – will require the redirection of $1 trillion per year until 2050. Yet, in 2013, public financing for climate change was $137 billion and private investment $193 billion, 90% of which remained invested in the country of origin.
Green dividends
Much of that funding gap will have to come from the private sector. Successful businesses already know how to anticipate and adapt to changing markets. Those who take the same approach in shifting towards a green economy will continue to enjoy success because the dividends will be, by default, sustainable. Studies from the International Energy Agency show that the uptake of economically viable energy efficiency investments could boost cumulative economic output by $18 trillion in the next 20 years. That is more than the combined economic output of the United States, Canada and Mexico.
Many people will be quick to say that a complete overhaul of the global economy is too much to ask. Not so long ago we heard the same about the ozone layer. Yet the past 30 years of action will restore the ozone layer to pre-1980s levels in the next 30 years. Change on this scale may be daunting, but it can be done.
In the meantime, we will all continue to feel the impact of climate change and must protect those most vulnerable to the risks. The first Adaptation Report produced by the United Nations Environment Programme (UNEP) shows that coping with the consequences of climate change will cost between $150 billion and $500 billion per year until 2050. For example, today Bangladesh spends $1 billion a year dealing with the impact of climate change. That is nearly a fifth of the amount the World Bank estimated for the country’s climate change adaptation by 2050.
That sounds like a massive investment, and it is, unless you compare it to the cost of inaction. Across Africa, two thirds of arable farmland could be lost to erosion in the next 20 years. Preventing human-induced soil erosion could enable the production of an additional 280 million tonnes of cereal crops every year. It would be a significant leap towards increasing food security and national income, while simultaneously reducing food import costs and poverty. Failing to do so could cost 12% of the continent’s GDP and affect anybody who depends on the 97% of global food supply that comes from terrestrial ecosystems.
For the world to secure a new action plan on climate change, those key issues need to be addressed: the shift towards an inclusive, sustainable green economy and the allocation of adaptation funding. This cannot be a choice of one over the other; we need both to underpin the credibility of any agreement on climate change.
Support from the financial sector
Over the past 20 years, the UNEP Finance Initiative has built a partnership with more than 200 banks, insurers and fund managers to develop a granular understanding of the links that exist between environmental, social and financial performance.
Then, last year, that foundation was built upon with the launch of the UNEP Inquiry to help individual states establish a framework that puts sustainable development at the very heart of their decisions, by facilitating market reform and more effectively channelling capital to green investment.
Crucially, this is not about anybody trying to take financial institutions down a road they are reluctant to take. Some 365 leading financial organisations are signatories to the Global Investor Statement on Climate Change. They are pushing for courageous political leadership in key areas such as carbon pricing and a controlled move away from fossil fuels subsidies towards the development and deployment of renewable technologies.
This year has offered leaders a once-in-a-generation opportunity to take ambitious decisions on both the green economy and climate adaptation, with the full support of both the United Nations and the leading players of the global financial sector.