Sir Nicholas Stern, author of the Stern Review on the Economics of Climate Change, has a good article in the UK’s Guardian, “Green routes to growth.” The former chief economist with the World Bank offers up “two crucial lessons we must learn from the financial turbulence the world has been facing”:
First, this crisis has been 20 years in the making and shows very clearly that the longer risk is ignored the bigger will be the consequences; second, we shall face an extended period of recession in the rich countries and low growth for the world as a whole. Let us learn the lessons and take the opportunity of the coincidence of the crisis and the deepening awareness of the great danger of unmanaged climate change: now is the time to lay the foundations for a world of low-carbon growth.
High-carbon growth – business as usual – will by mid-century have taken greenhouse gas concentrations to a point where a major climate disaster is very likely. We risk a transformation of the planet so radical that it would involve huge population movements and widespread conflict. Put simply, high-carbon growth will choke off growth. To manage the climate, we must cut world emissions by at least 50% by 2050, as recognised by the G8 earlier this year. Given that rich countries’ emissions are far above the world average, their cuts should be at least 80%, acknowledged in Europe and the UK, with the adoption of that target last week.
Stern notes that spending is needed to promote growth at this point, but equally important, “We must promote growth that can be sustained.” He argues it is time to accelerate the inevitable spending on energy infrastructure, but make sure it is low carbon:
The coming period of growth can be firmly based in the low-carbon infrastructure and investments that will not only be profitable, with the right policies, but also allow for a safer, cleaner and quieter economy and society. And if, as we must, we halt deforestation – the source of 20% of greenhouse gas emissions – at the same time we can also protect and enhance our biodiversity and water systems.
The International Energy Agency estimates that world energy infrastructure investments are likely to average about $1 trillion a year over the next 20 years. If the majority of this is low-carbon, and some of it is brought forward, it will be an outstanding source of investment demand. So too will be the investments for energy efficiency, many of which can be labour-intensive and are available immediately.
It is surely clear that a programme can be put together which both boosts demand in the short term and prepares for efficient, strong and sustainable growth in the medium term. It must be structured carefully with the public and private sectors working together. It will be the private sector that makes most of the investments, but the public sector must shape the incentives and the investment climate that allows the investment to take place. That will mean working with the EU and the UN Framework Convention on Climate Change in Copenhagen to sustain a price for carbon, by use of carbon trading and taxation. It means regulation, for instance, on car emissions to give clear signals that allow economies of scale and reduce uncertainty.
This sustainable growth strategy is crucial not just to end the recession but as a model for the whole world in the decades to come:
The next few years present a great opportunity to lay the foundations of a new form of growth that can transform our economies and societies. Let us grow out of this recession in a way that both reduces risks for our planet and sparks off a wave of new investment which will create a more secure, cleaner and more attractive economy for all of us. And in so doing, we shall demonstrate for all, particularly the developing world, that low-carbon growth is not only possible, but that it can also be a productive and efficient route to overcome world poverty.
Indeed, if the rich countries won’t aggressively pursue sustainable, low-carbon growth, why should the developing countries?
Related Posts:
- Is the financial crisis more dire than the climate crisis?
- What would a Green Recovery do for your state?
- Q: Is a global economic slowdown good for the climate, as Nobelist Paul Crutzen says?
- Economy doesn’t trump climate: EU sticks by GHG plan, UK goes for 80% cut.
- Stern admits report “badly underestimated” climate change risks
- Don’t Discount the Stern Review
- Inaction on Climate Change will HURT our Economy
- Desperate times, desperate scientists
RSS
Subscribe by Email
Follow Climate Progress on Twitter
The CNN show Anderson360 had on Joe Klein from Time magazine. Joe Klein said that they will have a magazine article out for this weekend that says that Barack Obama has said that we need something to make up for the lack of investments in other areas in our economy and Obama’s view is that Green energy should be it.
Housing was 2 million starts in 2006, and the United States is down to around 800 000 now with real estate prices still dropping, it’s not going to be the place to ramp up production anytime soon. We’ve got an oversupply of motor vehicles right now, even if they are the wrong kind, not being PHEV’s and BEV’s. So hopefully Obama will win on November 4th and follow thru.
this is where great care is needed. a new bubble isn’t the answer. we didn’t get universal broadband from the IT bubble, we haven’t gotten guaranteed affordable healthcare from the medical bubble, and look at the beating we’re getting from the housing bubble.
this has to be about real world impact, now. the finance people only want to fix their balance sheets with this.
We need to start from a depression.
There will be heavy pressure from the coal industry and the utilities to maintain business-as-usual so we will have to be the countervailing force to make CO2 emissions reduction possible through greening our electricity grid and linking transportation to electricity.
hapa — Well stated, IMO.
“Mark Lynas: the green heretic persecuted for his nuclear conversion”:
http://www.timesonline.co.uk/ tol/ news/ environment/ article4836556.ece
Low vehicle weight is a critical to getting high fuel economy.
I have invented a way to make small and light cars safer in collisions and this could encourage more people to drive one.
http://www.safersmallcars.com
Although you are right Hapa, regarding the finance guys just wanting to fix their balance sheets, one needs to realize that it was the finance guys in the first place that created the current housing bubble.
The Fed, by keeping interest rates lower than inflation rates effectively caused a negative real interest rate. For some reason the Fed decided to keep this negative real interest rate in place even after the markets had recovered from 9/11 and all the way through to the current fall out. So basically they were paying you to borrow money.
Obama is right, we do need another area of investment in the economy, but, and I once again agree with you Hapa, we do not need another bubble. The stricter financial controls being established now should limit the possibility of another bubble being created in the economy, if the Fed doesn’t screw it all up again.
I couldn’t agree more however. We need to get green and we need to do it fast. The huge thermodynamic nature of the oceans, which act as a heat battery, mean that even if we stop all carbon emissions now temperatures will continue to rise for a couple of years, maybe even decades, to come. This is where policy makers have to step in. The problem here is that Government is inherently short sited, focusing only on the next election and only on short term results that they can notch up on their belts. This calls for a much longer term view, which in my opinion, Government is ill suited to make.