Cha-Ching on Climate Change.

• Author: Gregoire, Eric
• Position: ECONOMIC OBSERVER

COUNTRIES THAT TAKE ambitious action against climate change can benefit macroeconomically--if they prioritize the most-economically efficient measures for mitigating emissions. "The Economic Case for Combating Climate Change," a report released by The Boston Consulting Group (BCG) and the BCG Henderson Institute, shows that most countries can achieve 75% to 90% of their individual 2050 2[degrees]C Paris Agreement targets using proven and generally accepted technologies. If they prioritize the most-efficient emissions reduction measures, mitigation activities actually accelerate, rather than slow, gross domestic product growth for many of them--even if countries move unilaterally.

"Consensus thinking holds that the world will have a hard time reaching the headline goal of the Paris Agreement," says report coauthor Philipp Gerbert, a BCG senior partner. "While that may be true, substantial progress is within most countries' reach. If managed appropriately, even unilateral emission reduction efforts do not need to trigger first-mover disadvantages."

BCG examined climate change mitigation strategies in seven countries that collectively account for close to 60% of current global greenhouse gas (GHG) emissions: China, India, Brazil, Russia, Germany, South Africa, and the U.S. (which, under Pres. Donald Trump's direction, has pulled out of the Paris Agreement). The work is modeled on previous BCG research commissioned by the German Industry Association, Climate Paths for Germany, one of the most-comprehensive studies of national emissions reduction potentials to date. In a position paper, German industry united behind the core findings of the study and called for more systematic and economically guided climate action by the German government.

Under current policies, all of the seven countries studied will fail to meet their individual 2[degrees]C Paris targets. BCG estimates that for all countries globally to move to a 2[degrees]C path, it would require total investment of up to 75 trillion dollars until 2050, but almost half of this is accrued in the "last mile" between what can be done under current technologies and the full 2[degrees]C target, and much of it creates payback through efficiency gains or savings in fossil fuels. For many countries, a significant share of investments before this "last mile" thus can create macroeconomic gain.

The report corrects several common misconceptions:

* We hardly require new technologies--more R&D remains...