5.2 For policy-makers: an opportunity to build resilience and growth The green economy creates economic growth and resilience – both attractive opportunities for government to seize. In 2023, clean energy alone accounted for almost 10% of global GDP growth, contributing about $320 billion to the world economy.72 By bringing power generation into domestic hands, the clean energy sector helps countries and regions enhance their energy security, such as Europe in its shift away from Russian oil and gas.73 It also creates jobs: solar and wind accounted for 16.2 million jobs globally in 2023.74 Most importantly, in a warming world, acting now is far cheaper than paying to fix climate damage later. Analysis shows that the global GDP impact from climate inaction could be around three times more costly than the ~$4 trillion needed annually to combat climate change.75 Six opportunities for policy- makers to accelerate the green economy Government intentions are very critical. In India, we had a big runway because of government setting the right targets and regulations. Sumant Sinha, Founder, Chairman & CEO, ReNew Not all this green growth will happen on its own. Some needs to be nurtured and some could be accelerated through policy intervention. Policy-makers could consider pursuing the following six opportunities: 1. Set clear and reliable long-term decarbonization targets: This will provide businesses with adequate planning security – since frequent shifts in government ambition, regulation and funding can stall private capital deployment and erode trust.2. Use public procurement to create early demand: Governments in Organisation for Economic Co-operation and Development (OECD) countries spend $6.5-8.5 trillion (12-13% of OECD GDP) on procurement every year.76 While green public procurement policies are in place in almost 90% of these countries, many lack the rigour and scale needed to create meaningful green demand.77,78 3. De-risk private capital to grow green investment and boost innovation: Scaling- up green technologies depends on mobilizing private investment, yet many projects face high perceived risks and uncertain returns. De-risking through guarantees, concessional capital, long- term offtake agreements and stable policies could further lower the cost of capital and attract institutional investors. 4. Remove obstacles to green technology and infrastructure: Permitting delays, infrastructure gaps and skills shortages slow deployment more than technology costs.79 By fast-tracking permitting for green projects, upskilling the workforce and modernizing grid infrastructure, countries could significantly ease this bottleneck. 5. Align economic incentives for green investments: To unlock the full potential of green markets, governments could align incentives so that subsidies, carbon pricing and targeted support mechanisms collectively create a level playing field for low-carbon solutions. This could include reviewing existing fossil fuel subsidies, which remain substantial across multiple markets. 6. Develop standards for green markets: In a number of markets, the lack of standards still creates unnecessary transaction costs. To unlock trust and enable scalability, governments could establish robust and consistent standards (e.g. what qualifies as “green”) and align these across jurisdictions. Already a Multi-Trillion-Dollar Market: CEO Guide to Growth in the Green Economy 44

Already a Multi-Trillion-Dollar Market 2025