Impact of Accelerated Climate Action on Global GDP

On 25th March 2025, a study by the Organisation for Economic Co-operation and Development (OECD) and the United Nations Development Programme (UNDP) suggests that well-designed climate policies could enhance economic growth while cutting emissions.

The report was released as delegates from 40 countries meet in Berlin for the Petersberg Climate Dialogue to set the agenda for the COP30 summit in Brazil later this year.

Key Points

Economic Benefits: Implementing strong climate policies could raise global GDP by 0.2% by 2040, an increase equivalent to the size of Sweden’s economy.
Innovation and Productivity: Investments in clean energy and efficiency drive productivity, counteracting the economic effects of policy-driven price and consumption changes.
Carbon Revenue Reinvestment: Reinvesting carbon revenues could further support GDP growth and enhance public support for climate action.
Impact of Policy Uncertainty: Lack of clear climate policies could reduce private investment and shrink GDP by 0.75% as early as 2030.
NDC Commitments: Countries are preparing to submit updated Nationally Determined Contributions (NDCs) by September, providing policy certainty and encouraging sustainable investment.
Petersberg Climate Dialogue: The first major ministerial climate meeting since the U.S. withdrawal from the Paris Agreement under the US President administration, focusing on implementing global climate goals.
Key Climate Goals: The dialogue will emphasize achieving the 2023 Dubai summit’s commitments, including transitioning away from fossil fuels and tripling global renewable energy capacity by 2030.