Three central lessons have emerged from the COVID-19 pandemic that can help address climate change, according to the 2021 Council Perspective from the global strategy and management consulting firm Kearney. The first lesson involves the capacity and limitations of individuals to change their behaviors when faced with external shocks, the second shows the need for international cooperation to solve global challenges, and the third highlights the crucial role of technology in advancing solutions. The new report by Kearney’s Global Business Policy Council, entitled The economic costs of climate change: lessons learned from COVID-19, explores these lessons and analyzes the role of policy and technology in shaping the outlook for carbon emissions and the global economy.

Heeding these lessons will help policymakers and businesses mitigate the worst effects of climate change, which are already costing economies and companies. Higher temperatures and extreme weather are disrupting a variety of industries from agriculture to logistics to tourism. Investors are also catching on, as 77 percent say that climate considerations are playing a role in their decision-making processes.

The report explores various green technologies, from established methods such as wind and solar power to emerging sectors such as geoengineering. “Developments in several green technologies are truly exciting,” said report co-author Paul A. Laudicina, chairman emeritus of Kearney and founder of its Global Business Policy Council. “We’ve seen incredible growth in a number of key areas such as wind and solar power even throughout the pandemic, and we only expect growth to continue after economies begin reopening at a larger scale.” Laudicina highlighted developments in the “disaster economy” in particular. “We at the Council have been monitoring the ‘disaster economy’ in recent years and expect it to continue growing as extreme weather events persist—and become more destructive.”

Policymakers are also taking action as more governments consider carbon pricing mechanisms, and public and private sectors alike are increasing investments in green technologies. As 79 percent of investors expect climate-related regulations to impact their decisions in the next three years, understanding how policies will impact companies will prove vital. The circular economy is one area to watch as more governments and companies find innovative ways to extend the life cycle of products and minimize waste.

Despite policy and technological developments heading in a mostly positive direction, the outlook for climate change is far from certain. The report explores four possible climate futures, to striking results: carbon emissions could differ by as much as 10,621 million tons of carbon dioxide by 2030, and swings in global GDP could be as high as $29 trillion. “Our scenarios highlight how crucial two drivers—international cooperation and climate technology innovation—will be in determining the outlook for carbon emissions,” argued Erik Peterson, managing director of the Global Business Policy Council and co-author of the report. “The pandemic has only emphasized the extent to which companies need to prepare for external shocks. But with appropriate planning, businesses can build effective resilience strategies to mitigate the growing risks of climate change.”