In total how much money have industries around the world spent to help Climate Change, and how much more of a budget is needed to end it?
This is such a good question and one that is quite tricky to answer accurately as there isn’t any exact global tally of money spent by all sectors on climate action. We only have estimates. It’s also difficult to tease out a separate figure for what industries spend, versus what governments spend. In addition to this, when we think of money spent on climate we need to think about what amount goes to mitigation and what’s allocated to adaptation. Here are some things we do know about global spending on climate change.
To transition to net zero by 2050, it is estimated that the world will need to spend about US$275 (A$428) trillion, an average of US$9.2 (A$14.3) trillion a year. We are currently far of this mark: we would need to increase annual spending by as much as US$3.5 (A$5.4) trillion from today. This figure is for spending on physical assets for energy and land use systems. We also need to consider how much money is spent on adaptation to climate change. The United Nations estimates that currently some US$50 (A$78) billion is spent on adaptation: a small fraction of what is actually needed. Rich countries pledged under the 2015 Paris Agreement to provide US$100 (A$155) billion a year to developing countries cope with damages from climate change. Unfortunately, this pledge has not been followed through, and climate finance to developing countries has fallen well short of the US$100 billion target since this initiative began.
It’s also important to think how much it would cost if we don’t invest in tackling climate change. It’s estimated that global economic losses from unmitigated climate change could be US$15.49 (A$24.1) trillion per year. In contrast, if we do invest in transition to net zero now, the global economy could see gains of US$43 (A$67) trillion between 2020 and 2070 and an overall boost of 3.8% to global GDP.
Where could money to deal with climate change come from? Research shows that the trillions of dollars needed to deal with climate change could come from redirecting current subsidies to sectors like the fossil fuel industry. It’s been estimated that US$7 (A$11) trillion a year in planet-damaging subsidies could be repurposed to combat climate change. Overall, it’s clear that that we only stand to benefit from spending on climate action now – and that as a global community we can afford it. In fact, we can’t afford not to.
