The economic imperative of robust action on greenhouse gas emissions

The climate crisis has escalated the cost of commodities and aggravated global famine, highlighting the urgent need for decisive action on greenhouse gas emissions. According to Simon Stiell, the Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), addressing emissions at scale is crucial not only for environmental purposes but also to restore economic stability. Speaking in Panama, where extreme droughts are threatening the Panama Canal—an artery of international trade—Stiell emphasised the far-reaching economic consequences of global heating.

He noted that droughts impacting the canal disrupt key supply chains, reduce agricultural yields, and escalate food scarcity globally. As a result, markets are destabilised, shelves emptied, and millions forced into hunger. Stiell warned that society cannot continue to ignore the link between global heating and humanitarian crises.

Investment opportunities could thrive with the right climate-focused government initiatives. Stiell stated that strong, clear climate policies provide the stability needed for economic growth. He asserted that effective national strategies could reignite trade, foster industrial expansion, and mitigate destructive environmental impacts.

Encouragingly, he outlined a vision for a new era of climate action. While previous plans largely focused on reducing emissions and phasing out outdated energy systems, the next generation of policies will centre on sustainable growth. These approaches aim to cultivate thriving industries, foster innovation, and ensure broader societal benefits such as job creation and environmental protection.

Countries face the challenge of avoiding a two-speed transition, where advanced economies lead in clean energy while less developed ones are left behind. Stiell urged wealthier nations to ensure equitable support through adequate climate finance, enabling developing countries to both mitigate climate breakdown and adapt to its imminent effects.

Global financial commitments to climate action remain under scrutiny. The retreat of funding sources, including the United States’ withdrawal under the Trump administration and the UK’s slashed foreign aid budget, has left a sizable gap in climate finance. These funding gaps jeopardise the ability of poorer nations to make effective strides toward renewable energy adoption and climate resilience.

Advocates, including over 80 civil society organisations, have proposed measures such as taxing windfall profits from fossil fuel producers, reallocating subsidies from polluting sectors, and imposing levies on luxury transport. Data suggests these steps could raise significant revenue while receiving public support.

The UK government has pledged £11.6bn in international climate finance from 2021 to 2026 but faces pressure to expand its commitments. Environmental organisations argue the UK, as one of the largest historical emitters, carries both moral and financial responsibilities to help bridge the global funding gap. They stressed that true leadership lies not only in domestic action but in providing substantial backing to those most vulnerable to climate devastation.

A government spokesperson maintained that the UK remains steadfast in its commitment to global climate efforts. They highlighted achievements such as helping millions adapt to climate impacts and gaining access to clean energy. However, pressure continues to mount for more ambitious programmes that meet both ethical obligations and economic imperatives.