Time is running out to act on climate change. But rather than climate action being a drain on the economy, our report on the European continent shows there is a window of opportunity to act now to significantly boost GDP, accelerate growth and provide new employment opportunities for citizens.
Reducing Europe’s emissions will have global economic benefits because it helps limit global warming to as close to 1.5°C as possible, reducing the economic harm of continued warming.
The continent has the technologies, regulatory frameworks, and the capabilities to reach net zero emissions. By moving quickly we can accelerate transformation and advance towards sustainable economic prosperity. Emerging industries will create new occupations for today’s workers and a transformed European economy would be well-positioned to capitalise on new global markets for decarbonised exports.
Investments now will be recovered many times over through averting potential extreme climate damage, minimising economic impact and creating an equitable transition for all countries on the European continent.
Italy’s turning point
Economic imperative—our turning point
The cost of action and inaction
Acting on climate change is the new economic engine.
€730 billion added to European economies in 2070.
There is evidence that the regions that take early and rapid action to establish green and low-emission production capabilities will be rewarded with more sophisticated and competitive economies in a low-emission world.
Europe is well-positioned to become the world’s first climate-neutral continent.
The cost of doing nothing is economically devastating.
€6 trillion lost from European economies in the 50 years to 2070.
In this climate-damaged future, there could also be 110 million fewer jobs available in Europe’s economies over the next 50 years, a scenario that could diminish the region’s long-term economic prospects.
We have a narrow window of time to change the future. Now is the time to accelerate transformations across the European continent, to combat the worst impact and accelerate economic growth.
Source: Deloitte Economics Institute.
The opportunity and impacts
Europe has an opportunity to accelerate
European economies have much to gain from action
With the right transition framework, Europe can move away from mounting climate damage towards new growth in a low-emissions economy. By getting started now, the continent can set the right direction, rate, and quality of growth to achieve an industrial revolution in the next 30 years. Not only can upfront coordination speed the path to net zero, but it could ensure a supportive transition that eases the cost burden —and shares the benefits—of change with all economies on the continent.
European economies must accelerate progress
For decades, Europe has fought climate change across the continent and abroad. Yet global inaction and the ‘locked-in’ effects of climate change means the time has passed to start isolated transitions. It is now time to accelerate collectively. The cost of transitioning the European continent—which some have argued would be too high—is actually less than 0.7% of GDP each year to 2050. This is a small cost and one worth paying.
Yet even if Europe takes bold and collective action, it needs to be responsive to what’s going on in other parts of the world. That’s because the built-in assumptions about the outcomes of Europe’s decarbonisation depend on the efforts of all the regions of the world. This will require Europe to confront aspects of its regional politics that may otherwise impede regional cooperation.
Source: Deloitte Economics Institute.
Time to act—accelerating to zero
Four phases will shape our economic and climatic future
Four phases will shape our economic and climatic future.
- Bold Climate Plays – 2021 – 2025: Decisions begin to accelerate decarbonisation at scale.
- Accelerate to Zero – 2025 – 2035: Big economic shifts occur in policy, energy systems and consumer behaviour.
- The turning point – 2035-2050: Decarbonisation of high-emission industries almost complete. Costs of sustainable technologies start decreasing and wider net economic gains.
- Low-emission future – 2050 onwards: Radical transformation of economic structure. European economies near net zero emissions and operating in a world that keeps global warming to below 2°C.
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