Low oil prices, interest rates present opportunities for low-carbon economy
January 22, 2015 | By
Barbara Vergetis Lundin
Low oil prices combined with continuing low interest rates in wealthy countries represent an ideal opportunity for investments in low-carbon infrastructure while making it easier to cut fossil fuel subsidies and introduce a tax on carbon in an effort to slow climate change. That is according to members of the Global Commission on the Economy and Climate who spoke at the recent World Economic Forum. According to the Commission, fossil fuel subsidies cost consumers $600 billion a year. They contend that a tax on carbon would be more easily absorbed by businesses and households in today's economic climate, driving greater economic efficiency and reducing emissions. "This would also send a strong signal to businesses and investors about the direction of the global economy ahead of the crucial Paris talks later this year where a new climate deal is at stake," said Lord Nicholas Stern, co-chair of the Global Commission, "encouraging countries and businesses to invest in low-carbon alternatives and better economic growth." Low interest rates and low costs of capital in developed
countries make this an ideal time to invest in low-carbon
infrastructure, which includes creating more efficient energy
systems and building new urban transport networks that would
reduce pollution and generate savings of $3 trillion over the
next 15 years, according to research by the Commission, which is
co-chaired by former President of Mexico Felipe Calderón. As an example, in the 15 countries with the highest greenhouse gas emissions, the damage to health from poor air quality costs over 4 percent GDP on average, reaching 10 percent in China, according to the Commission. "Around $90 trillion will be invested globally in cities, land use and energy infrastructure between now and 2030," said Calderón. "Whether we invest that money in a low-carbon or high-carbon pathway will shape future growth." In 2015, the Global Commission on the Economy and Climate will launch a second report investigating the emissions reduction potential and economic benefits and costs of international cooperative initiatives. For more: © 2015 FierceMarkets, a division of Questex Media Group LLC. All rights reserved. |