The United Nations will today call for two per cent of worldwide income to be invested in the green economy, a move it says would boost jobs and economic growth.

The call is expected to be matched by statements of support for low-carbon investment from heads of state including President Barack Obama of the US and Hu Jintao of China, and several chiefs of multinational companies.

An investment of two per cent of global GDP would more than pay for itself in the form of millions of new jobs, the development of new industries, health benefits from cleaner air, energy efficiency savings and a reduction in greenhouse gas emissions, the UN is expected to say.

These findings are also backed up by a report to be published today by the German government, which warns that Europe will suffer continued low growth rates unless investment in green projects is increased. Raising the level of ambition in the EU’s climate targets would increase European GDP by up to $842bn, a six per cent rise, and create up to six million additional jobs across member states.

The world stands at a critical point in terms of low-carbon investment, according to the UN. While India has a national action plan expected to stimulate $1tn of investment in the next decade, and China - already the biggest producer of wind power and solar panels - is pushing ahead with a five-year plan for a “clean revolution”, other economies are wavering.

In the US, investment in renewable energy has stalled, and an HSBC analysis found that Republican plans currently before Congress would more than halve federal spending on low-carbon projects, including high-speed rail, carbon regulation and contributions to international climate funds. Plans put forward by Obama, by contrast, provide for a 20 per cent increase in climate and clean energy funding above 2010 levels, paid for by the repeal of $4bn in fossil fuel subsidies and research.

Nick Robins, head of climate change at HSBC, said: “We expect tough negotiations to close this gulf in budgetary priorities between the president and Congress… Although we do not expect all the proposed cuts to materialise, key climate initiatives look set to be curbed.”

In the European Union, politicians, green campaigners and businesses are at loggerheads over whether to adopt more ambitious climate targets. Several member states, including the UK, want to toughen the current goal of cutting emissions by 20 per cent by 2020 to a cut of 30 per cent by the same date, arguing that a more stringent target will create new jobs and allow the EU to keep up with China in the race to dominate the green economy. Their case was strongly boosted by a confidential European Commission analysis, seen by the Guardian, showing that if existing policies are followed through, the EU will comfortably exceed its current target, with a fall in emissions of about 25 per cent by 2020.

The German environment ministry’s report, also seen by the Guardian, added to this case, concluding that the current 20 per cent target “has become too weak to mobilise innovations”. Sticking with it, the authors say, “is the equivalent of digging deeper while still being stuck in a hole”, while the 30 per cent target is not only achievable but “economically beneficial”.

In the UK, a group of leading businesses will unite today to urge George Osborne, the chancellor, to include measures to stimulate low-carbon development in his March Budget. Peter Young, chairman of the Aldersgate Group, said: “The chancellor has promised a budget for growth but we believe this must be a budget for green growth. The UK needs an explicit strategy to take advantage of the global shift to a green economy, driving jobs and exports. Cuts alone will not deliver a competitive economy.”

This article first appeared at the Guardian

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