Better aligning climate policies with economic and social priorities can lead to higher global GDP and reduce poverty, according to a new report.
Commissioned by the OECD and the United Nations Development Programme (UNDP), the report found ambitious climate targets, that were underpinned by robust implementation and investment plans, could provide economic opportunities.
OECD Secretary-General Mathias Cormann said there was the potential to unlock investment and support sustainable development and growth, while facilitating low-emission transitions.
“Aligning climate policies with economic and social priorities can lead to higher global GDP, accelerated poverty reduction, improved energy security and better health outcomes,” Secretary-General Cormann said.
He said while climate action had progressed significantly over the past decade and net-zero targets now covered almost 90 percent of the global economy, further progress was needed.
“Global emissions reached a new high in 2024, and average temperatures exceeded 1.5°C for the first full year.”
Secretary-General Cormann said under the Paris Agreement, countries were required to submit new climate plans every five years to further reduce greenhouse gas emissions and adapt to climate impacts and risks through Nationally Determined Contributions (NDCs).
“The 2025 round of NDCs provides a timely opportunity to lift countries’ collective ambition.”
He said the OECD-UNDP report analysed how enhanced NDCs, if well-designed and supported by strong implementation frameworks, could simultaneously accelerate inclusive economic growth and reduce emissions.
“Under this scenario, global GDP is projected to grow by around 60 percent between 2022-40 and would be 0.2 percent higher in 2040 compared to a continuation of the current policy scenario.
“The economic case for climate ambition becomes even stronger in the long run when considering avoided economic losses if the risks of climate-induced events are reduced.”
Read the full report: Investing in Climate for Growth and Development. The Case for Enhanced NDCs.
