New reports say “green growth” strategies would boost European and world economies

22 February 2011

LONDON, 22 February 2011: A new report released yesterday by the Potsdam Institute for Climate Impact Research (PIK) and Oxford University says that increasing the EU’s 2020 greenhouse gas reduction target from 20 per cent to 30 per cent could boost European investments, leading to a GDP increase of up to €620bn ($840bn) and the creation of up to six million additional jobs.

The report, A New Growth Path for Europe - Generating Growth and Jobs in the Low-Carbon Economy, was commissioned by the German Federal Ministry of the Environment and argues: “Sticking to the 20% target in a situation where this target has become too weak to mobilize innovations and to stabilize political will is the equivalent of digging deeper while being stuck in a hole."

The study shows that the European economy could be shifted into a new ‘low-carbon equilibrium’ through a decisive move to a domestic 30% emissions reduction target and independently of an international post-2012 agreement, thereby setting expectations for growth of the European economy at a higher level. European industry can maintain and enhance its competitiveness by developing the low carbon materials and technologies that will shape the future.

Professor Carlo Jaeger, lead author of the new report, said: “By credibly engaging on the transition to a low-carbon economy through the adoption of an ambitious target and adequate policies, Europe will find itself in a win-win situation of increasing economic growth while reducing greenhouse gases”.

Mark Kenber, CEO of The Climate Group said: “Many of the businesses we work with want a more ambitious European climate policy to create the certainty they need to invest in a low carbon future. Far from being a drag on the EU economy, this new research shows moving to a 30 per cent climate target would cut emissions and drive a virtuous circle of green growth, creating six million jobs and boosting GDP growth by over half a trillion Euros in the next 10 years.”

Another report published yesterday by the United Nations (UNEP’s Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication) also challenges the myth of any trade off between environmental investments and economic growth. It argues that investing two per cent of global GDP (around $1.3 trillion a year) into ten key sectors – including industry, energy, buildings, and transport – would kick-start the global economy without increasing global emissions.

Backed by forward-looking national and international policies, it argues its investment ‘blueprint’ would grow the global economy “at around the same rate if not higher” than those forecast under current economic models, but without “rising risks, shocks, scarcities and crises” increasingly inherent in the existing, high carbon 'brown' economy.

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