Action on climate change can provide a shot in the arm for the global economy - economist

CNBC reports that Charles Dumas, chief economist at TS Lombard, said that action on climate change is often criticized as moving too slowly. However, with governments increasing spending to aid their post-Covid economies, they may start catching up. 

A key tenet of this is the ever-decreasing cost of electricity per megawatt hour, according to figures from TS Lombard, with costs of solar, offshore and onshore wind dropping over the last 10 years, while gas and coal have remained largely the same.

“Effectively by 2030 the cost of renewable electricity is going to be half that of coal and gas sourced electricity,” Dumas said.

These trends will bring many of the various pledges to reach net zero more closely in sight.

Dumas said that as COP26 (the United Nations Climate Change Conference) approaches, governments need to understand their key priorities, and among them should be infrastructure investments as numerous technological and engineering challenges continue to obstruct renewable energy.

Energy transmission could be another bottleneck, he said. While the developing world, including several African nations, has great potential in developing sites for generating solar power, that power needs to move easily.

Storage and carbon capture are all areas that require hefty investment, Dumas added, if governments are to reach their net-zero targets.

Paul Steele, chief economist at an independent policy research institute called the International Institute for Environment and Development, said that climate action and renewable energy investments will serve the dual purpose of tackling the climate crisis while creating jobs for the post-Covid economy.

“One of the priorities coming out of Covid is to create labor intensive employment. Both in developed and developing countries, you can provide labor intensive employment through renewable energy,” Steele said.