Far from wrecking the economic growth, climate change will boost the global economy, according to Barclays Capital, a leading investment bank.
It believes the need to increase energy capacity by 50 per cent by 2035, while simultaneously reducing dependence on hydrocarbons, will spark an “energy revolution” reminiscent of the dot.com boom.
“If ever the time were ripe for such an energy revolution, it is now,” argues Tim Bond, author of Barclays Capital’s report. “And like all historical adoptions of general purpose technologies, the process should prove immensely stimulative to economic growth.”
Mr Bond says that those who couch the climate change debate in terms of the cost to growth are underestimating the impact of an energy revolution. Last year’s Stern Review concluded that if temperatures rise by five degrees celsius, up to 10 per cent of global output could be lost.
“All of the historical changes in energy supply – from dung to wood to coal to oil – were stimulative for the economy concerned. Every major technological change was accompanied or followed by faster economic growth.” he said. Like every revolution, there will be winners and losers, with the energy sector set to reap the biggest rewards.