Accelerated climate action presents significant opportunities for economic growth and sustainable development. A recent joint report by the OECD and the United Nations Development Programme (UNDP) emphasizes that ambitious climate targets, backed by solid implementation and investment plans, can unlock investment and support low-emission transitions. The report, titled “Investing in Climate for Growth and Development,” argues that aligning climate policies with economic and social priorities can enhance global GDP, reduce poverty, improve energy security, and yield better health outcomes. Despite notable progress in climate action over the past decade—such as a rise in clean energy investments and net-zero targets encompassing nearly 90% of the global economy—further efforts are essential.
Global emissions reached an alarming high in 2024, and average temperatures surpassed the critical 1.5°C threshold for the first full year. As stipulated under the Paris Agreement, countries must submit new climate plans every five years to mitigate greenhouse gas emissions and adapt to climate risks through Nationally Determined Contributions (NDCs). The upcoming 2025 NDC submissions provide an opportune moment to boost collective ambition. The OECD-UNDP report highlights that well-designed and supported enhanced NDCs can simultaneously accelerate inclusive economic growth and curb emissions.
Projections estimate that global GDP could grow by 60% between 2022 and 2040, with enhanced climate ambition contributing to potential increases of up to 3% by 2050 and 13% by 2100. This potential economic growth presents a compelling case for heightened climate ambition, particularly when considering the avoided losses associated with climate-induced risks. Furthermore, the report illustrates that climate action can improve living conditions, lifting many out of poverty while addressing health-related issues linked to pollution. Strategic priorities for the 2025 NDC cycle include fostering political commitment, engaging the private sector, and ensuring that financial strategies are inclusive.
As the OECD continues to support nations in strengthening their climate commitments, the report underscores the integral connection between climate ambition and long-term economic prosperity, with its insights being shared at the forthcoming Global NDC conference in Berlin.