Resource Depletion, Climate Change, and Economic Growth

TitleResource Depletion, Climate Change, and Economic Growth
Publication TypeReport
Year of Publication2013
AuthorsSteer, Andrew
Date Published2013///
InstitutionGlobal Citizen Foundation
KeywordsCarbon pricing, climate change, environmental degradation, food prices, green growth, greenhouse gas emissions, international cooperation, natural resource depletion, population growth

Current patterns of energy and natural resource use, agricultural practices, and urbanization appear to be largely unsustainable and require urgent remediation. Left unchecked, these patterns will lead to dangerous climate change and reduced economic growth, as a result of increased economic, social, and environmental costs and decreased productivity. Current economic models fail to incorporate the effects of high-carbon growth on climate change and environmental degradation. A new generation of economic models is needed that account for the risk of catastrophic impacts, do not overestimate the costs of climate change action, and use a discount rate that does not treat future generations as less important than the current one. Models of how economies adjust to tighter environmental policies need to incorporate new evidence that actions such as increasing energy and resource efficiency can lead to larger win-win gains than were earlier thought possible; that smart policies combining carbon pricing and directed investment in research can lead to increased investment, growth, and competitiveness; and that investment can be raised by providing long-term policy confidence about the price of carbon and associated risks of stranded assets. A variety of policies—including removing subsidies on fossil fuels, pricing carbon, addressing other market failures, improving international cooperation, and facilitating citizen voice through the marketplace—will play an important role in putting economic processes on a more sustainable footing.