Green transition presents $10trn opportunity for global economy

New green industries could be worth more than $10trn (£8.2trn) to the global economy by 2050, which would be equivalent to over 5% of the world’s GDP that year, a new report claims.

The report from Arup and Oxford Economics draws on the expertise of climate specialists, economists and sectoral experts, identifying “three pillars of opportunity” that will emerge from the green transition.

Firstly, it explains how the switch to clean energy will create competitive opportunities across all industries, and how businesses adapting to changing demands and hiring capable talent quickly, will benefit most.

Secondly, the report identifies the direct contribution to GDP of electric vehicles manufacturing, renewable power generation, clean energy equipment manufacturing, renewable fuels and green finance.

Thirdly, it highlights substantial productivity benefits, with the combination of carbon pricing and investment in technology and working practices placing the global economy on a more prosperous and sustainable footing.

Overall, the researchers estimate that, in today’s prices, the green transition could be worth $10.3trn to the global economy by 2050, equivalent to 5.2% of global GDP.

Commenting on the findings, IEMA’s Deputy CEO, Martin Baxter, said: “This report demonstrates the huge financial benefit that green industries can offer the global economy, and underlines the crucial need for governments and organisations to invest in green skills and training.

“Every job must be greener if we are to tackle the climate and environmental emergency. Our recently launched Green Careers Hub will help anyone – from any sector or background – understand how they can play a role in the wider green economy.”

The report also includes three tools to help economic policy decision-makers identify the right green economic opportunities, and maps out the steps required to capture them.

These tools include:

• A new taxonomy for green economic activities

• A framework to identify which opportunities work best for which economies

• A policy action tool for policymakers in different contexts

Adrian Cooper, CEO of Oxford Economics, said: “This study provides an original perspective on the commercial prize on offer for those enterprises and industries that move fastest and most capably to meet the demands of a greener economy.

“Our hope is that, as the world and its political and business leaders look towards another year of progress in advance of next year’s COP Summit, this analysis will provide a constructive contribution to their understanding.”