Cutting carbon will boost GDP
- robball6
- Apr 3
- 2 min read
Strong climate policies will improve prosperity for both wealthy and poor countries, according to the findings of a report from the Organisation for Economic Cooperation and Development (OECD) and the United Nations Development Program (UNDP).
If climate policies globally are strengthened, wealthy countries, such as the UK, could see their gross domestic product (GDP) per capita grow by over 60% by 2050, while poor countries could see a rise of 124%. On the other hand, a business-as-usual approach would see global GDP decline – in both the short- and long term, according to the OECD and UNDP.
These figures were released through a briefing document and through presentations at the 16th annual Petersberg Climate Conference in Berlin last week, reported by The Energy Mix. They come ahead of a full report which will be published in May.
Meanwhile, in the UK, the Department for Energy Security & Net Zero announced provisional figures last week which showed that our greenhouse gas emissions fell by almost 4% in 2024 and by 54% compared to 1990. Meanwhile, GDP has grown by 84% since 1990.
Major contributions to the fall in UK emissions were due the closure of our last coal-fired power station in Nottinghamshire and the closure of blast furnaces at the Port Talbot steelworks in Wales. There was also a 1.4% fall in oil demand, largely due to a rise of almost 40% in the number of electric vehicles on the road, according to analysis from Carbon Brief.
Economic growth and carbon emissions are starting to decouple, says the OECD and UNDP briefing. Over 40 countries increased their GDP while cutting emissions from 2015 to 2022. Clean energy now attracts twice the investment of fossil fuels.
The briefing says that the findings of its report show that well-designed climate policies can deliver stronger economic growth. Low-carbon economies are more efficient, it says, and investing in clean energy and energy efficiency increases productivity. Conversely, uncertainty over policies weakens investment and slows growth.
Unfortunately, certainty is in short supply globally right now. The briefing warns that action on climate change is losing momentum, blaming ‘mounting economic uncertainty, geopolitical tensions and rising public debts’ which are putting a strain on government budgets for climate action.
Many countries have yet to produce revised climate action plans. In February 2025, all the countries that are signed up to the Paris Agreement were due to submit their revised plans on climate action – known as Nationally Determined Contributions (NDCs) - to the UN Convention on Climate Change. Out of 195, the UK is one of only 18 NDCs to have been submitted.
Given the political changes that are underway at the moment, it is perhaps understandable that so many countries, including big players such as the EU, China, Japan, Australia, Indonesia, and Mexico, are still deciding on their climate change goals. The policies that they decide on will have a big impact on economic growth – or decline – around the world.
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