Senior economist: We can stop climate change and still see economic growth

An optimistic yet challenging vision for tackling climate change emerged from the UK on Monday, with the British government's release of a report entitled "The Economics of Climate Change".

• Executive Summary
  
• Full Report
  
• Presentation Slides

Written by former World Bank chief economist Sir Nicholas Stern, the report is the first of its kind, pricing the expected cost of tackling climate change - but more importantly, also pricing the likely economic cost of inaction.

As The Times reported, climate scientists have largely been unable to provide any robust economic analysis of the costs of climate change. Paul Ekins calculated in 2004 that it would cost the US no more than 1% of its GDP to meet the Kyoto Protocol - but little else had been released by senior international economists until this past Monday.

Describing climate change as the "greatest and widest-ranging market failure ever seen", Sir Nicholas noted that the UK could no act alone - that climate change requires internationally-agreed measures. British prime minister Tony Blair stated that the report "demolishes the last remaining argument for inaction on climate change". Treasury head Gordon Brown reflected similar comments about the imperativeness of resolute international action.

Sir Nicholas, who is also head of the UK's Government Economic Service, rubbished claims that curbing climate change would paralyze Western economies. He argued that by spending 1% of GDP each year, the UK would save 5%-20% of its GDP by the end of the century.

The economist went on to argue that stabilizing greenhouse gas levels will not halt economic growth. He noted: "The world does not need to choose between averting climate change and promoting growth and development. With strong, deliberate policy choices it is possible to 'decarbonize' both developed and developing economies on the scale required for climate stabilization, while maintaining economic growth in both."

Sir Nicholas also noted the development of business opportunities from new technology would help compensate the costs of tackling climate change - with markets for low-carbon energy products expected to be worth $600 billion by 2005.

"Above all, reducing the risks of climate change requires collective action. It required co-operation between countries. It requires a partnership between the public and private sector. It is still possible to avoid the worst impacts of climate change, but it requires strong and urgent collective action. Delay would be costly and dangerous."

Camilla Cavendish of The Times provided a very apt summary of the likely impact of Sir Nicholas' report:

"The science debate is effectively over. The Stern review means that the economic debate is all but over. Only the political debate is left."

In Britain, that political debate has pretty much concluded as well: all three major parties support major efforts to tackle climate change - and it is arguably the Conservatives who are demanding the greatest action.

Meanwhile, back in Canada... what, pray tell, do you think our Conservative government's response will be?


Video coverage

Sir Nicholas Stern's press conference presentation (16:55)

Tony Blair warns of disasterous consequences (2:48)

Gordon Brown on the 'moral imperative' to tackle climate change (15:56)

Chancellor's answer about taxing high-carbon businesses (1:34)