Tougher GHGE targets would bolster economic growth.
By John Elkington
Wherever in the world I find myself, I talk to audiences about the Sound Barrier. I take them back to the late 1940s and early 1950s, when test pilots were slamming into an invisible – but deadly – obstruction in mid-air as they tried to fly ever faster. Aircraft broke apart as the shock waves tore their wings away. But then one pilot did something crazy, in desperation: in a power dive, he found his controls locked. Instead of pulling the control column back, he pushed it forward. Quite unexpectedly, the aircraft recovered.
Then I make the connection: as growing numbers of technologies and business models crash into today’s ‘Sustainability Barrier,’ I say, many are beginning to break apart. It started with things like insecticides, asbestos and chlorofluorocarbons, and is now spreading out to carbon-intensive markets. To survive, politicians and business leaders will increasingly find they need to reverse the controls on their economies, value chains and companies.
Now a study published by Germany’s federal environment ministry makes the same point, using the latest mathematical models. Entitled A New Growth Path for Europe, its conclusions will come as a shock to anyone who believes tackling climate change with increasingly tough emission targets represents a net drag on the economy.
At a time when the European Union has 20% greenhouse emission reduction targets, and many business leaders complain this is damaging prospects for future growth, prosperity and job creation, the new study says nonsense, “it is time for boldness.”
The problem with the 20% target is not that it is too aggressive, but that it is too weak. Instead of sticking with 20%, Europe should make “a decisive move to a 30% target.” If this is done well, by 2020 the rate of European growth could be boosted by up to 0.6% a year; European investments would rise from 18% to up to 22% of GDP; GDP itself would grow by up to 6% both in both old and new member states; and up to 6 million additional jobs would be created.
Perhaps most surprising of all, economic opportunities linked to tighter emissions targets would be available whether or not 2012 sees a global climate agreement after the Rio+20 UN summit meeting.
So why do the latest models show such different outcomes with tighter emission controls? They assume that tougher controls trigger greater additional investments, stimulating what they call ‘learning-by-doing’ across the entire economy—particularly in sectors focusing on such areas as advanced construction materials and renewable energy. Learning-by-doing, in turn, increases competitiveness and spurs further economic growth, boosting the expectations of investors—and fuelling further investment.
Just as our species went from balloons and powered box kites to machines that could break the Sound Barrier and, ultimately, reach to the moon and beyond, so green growth sectors can push our economies onto radically new trajectories. In a time of growing stress and danger, doing the unexpected may save not just one test pilot but our entire civilization.
About John Elkington
John Elkington is Executive Chairman of Volans and Non-Executive Director at SustainAbility. He is also a Board member at GRI and an Advisory Board member at IIRC. Elkington blogs at johnelkington.com and tweets at volandia.
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