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Economic hardships push advancements in environmental legislation further down the political agenda. This tendency is rooted in the belief that environmental protection is a secondary issue, one that can simply be “put on the back burner” until more pressing issues are dealt with. Such oversight lacks the critical foresight required to recognize the ever-closer ramifications of accelerating global climate change. Once a “future” crisis with “future” impacts, this perspective is as outdated now as it was when first introduced. The climate crisis is present and demands our full attention.
According to the World Economic Forum, global annual damages from climate change are estimated to reach $38 trillion per year by 2050: six times larger than the mitigation costs required to limit global warming to two degrees Celsius. By continuing to half-heartedly address the climate crisis, the global economy stands to lose an equivalent of an 18 percent GDP loss by 2050.
From local to global levels, many climate change policies falter due to a lack of “political will:” the unwillingness or inability of government officials to enact policies that will reduce carbon pollution at the scale and speed required. Large global events (e.g., COVID, conflicts, natural disasters) and insufficient news coverage cause climate change issues to fall out of public and policymakers’ consciousness, hindering progress toward ensuring our future on Earth.
Visible on city billboards worldwide, the Climate Clock depicts the “critical time window” until climate degradation. At the time of writing, the clock stands at four years and 172 days. Alarmingly, this timeframe coincides with a turbulent period of economic strain, global conflicts, and the return of noted climate change denier Donald Trump to the White House. The re-election of Trump is estimated to add 4 billion tonnes of US carbon dioxide (CO2) emissions by 2030, causing global climate damages worth more than $900bn—equivalent to the combined annual emissions of the EU and Japan.
The shortfalls of negotiating global climate finance during the 29th Conference of the Parties (COP29) demonstrate that environmental policy progress often lacks adequate commitment. While delegates agreed to triple the existing global climate finance fund to $300 billion per year until 2035 during COP29 in Baku, Azerbaijan in November 2024, it is a long way off the $1.3 trillion required to aid impacted areas, much less to mitigate the threat of climate change. We cannot afford a half-hearted attempt, yet the disconnect between scientists’ warnings and economists’ allowances to react appropriately is worlds apart.
While the extent of sustainability transitions is dependent on the interplay of economic and political interests, adaptation and innovation are still possible. We must decouple the idea that only economic strength can drive environmental advancements—environmental incentives can also spur economic growth. Sustainable finance and carbon offsetting schemes allow companies, large and small, to trade credits and manage their carbon footprint. High-emission companies can invest in carbon-sequestering firms, such as agroforestry, to reduce their CO2 output. This model could help mitigate some of the largest impacts of climate change that we will experience in due course. However, the voluntary carbon market has been marred by scandal—over 90 percent of rainforest carbon offsets were found to be worthless in 2023. Investigations into Verra, the leading carbon standard in the $2 billion voluntary offsets market, revealed that many rainforest offset credits are “phantom credits” with no genuine carbon reductions.
Market failures, information gaps, short-termism, undervaluation of natural capital, and inconsistent policies are among some of the barriers that hinder bridging sustainable finance gaps and discourage private investment in sustainable development. Regulation and verification of these markets are needed to scale these systems up. While credit transfers can work within nation states, it is much more difficult to facilitate on a global scale and across national boundaries due to development inequalities, with economically developing nations unable to trade and economically advanced nations likely to benefit most.
Environmental protection ensures the continuation of life on earth and sustained economic wealth. Neglecting environmental recovery for short-term economic growth threatens our children’s future. Funding for climate efforts is scarce, and true viability requires enhanced political will that recognizes Earth’s fragile planetary boundaries.
Edited by Zhanserik Temirtashev
Image: ‘Money‘ via Wikimedia Commons by kschneider2991, 2017 // CC0 1.0
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