Prior to going on sabbatical, Dr. Augusto Lopez-Claros served as the director of the World Bank’s Global Indicators Group for six years. An expert with extensive experience in economic development, he has written extensively on a range of issues. He has argued that although high economic growth in recent decades has greatly improved average life expectancy, infant mortality, and other leading indicators, policymakers and development practitioners are still worried about the sustainability of these trends and whether people in developing countries would eventually enjoy the high standards of living of high-income countries, against the background of a planet under increasing stress as a result of climate change.

A key finding of the latest scientific work on climate change is that the annual cost of introducing control measures for greenhouse gases is far smaller than the potential cost of uncontrolled climate change. The UN’s Intergovernmental Panel on Climate Change (IPCC) has, in the past, provided estimates suggesting that stabilizing greenhouse gases by 2030 would slow global economic growth by maybe 0.1-0.2 percentage point per year. The risks of inaction, however, are huge. It has proved difficult for computer models to deliver robust cost estimates for scenarios that lie outside the range of recent human experience.

A rise in temperatures in excess of 2°C with respect to pre-industrial levels, for instance, has not been seen on the planet in the last 1 million years (perhaps much longer), though this is the envisaged increase consistent with the pledges made by 175 countries in Paris in 2015. So, one central element of the solution will be implementing a transition to a low carbon economy that will involve the use of cleaner fuels, including solar-photovoltaic and onshore-wind technologies, which have become increasingly competitive and which will have a number of other collateral benefits, such as preventing millions of deaths every year linked to air pollution.

There will also be a need to invest in energy infrastructure, to replace aging capacity, and meet growing global energy demand, but also to boost efficiency. More generally, it is estimated that over the next 20 years global investment in infrastructure will be in the region of $5-6 trillion per year, three quarters of which will be new infrastructure in the developing world. Since well over half of total greenhouse emissions stem from investment in and use of various infrastructures, there is an overwhelming need, going forward, for all new such investments to be clean and green.

Investment in conservation to redress some of the damage done to the environment through decades of neglect will also be key. Something like US$100-200 billion should be spent annually to protect topsoil in croplands, to stabilize water tables, to restore fisheries, and protect biological diversity. This sum of money is small in relation to the size of the global economy and it is certainly very small in relation to the trillions made available by governments in some of the largest countries to deal with the short-term effects of the last global financial crisis.