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A Stern Warning
Delegates cannot have failed to notice a chunky 700-page report addressing the economic implications of climate change which came out last week. The report, led by Sir Nicholas Stern, clearly demonstrates that governments can afford to act – and must do so urgently – to avoid disastrous economic costs in the future. An investment of just 1 per cent in the global economy will avoid costs of 10 per cent, Stern says to show that measures to tackle climate change will have economic benefits.
The independent review, commissioned by the UK Government, warns that a failure to act will cost the global economy US$2.5 trillion or 20 per cent of gross domestic product. Each tonne of carbon dioxide now emitted has a cost of $85 a tonne. However, it can be cut at a cost of just $25 a tonne.
The report suggests that real progress in Nairobi has a global economic significance. A former chief economist at the World Bank, Stern has confirmed there is no trade off between economic growth and addressing climate change concerns. In fact, economic, environmental and social strands of addressing climate change are not only compatible, they are inseparable.
The executive summary of this definitive report states that until now, climate change “is the greatest and widest-ranging market failure ever seen.” The principle recommendation of the report is: Strong, deliberate and early action on climate change far outweighs the costs.
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