Stern: Rich nations will have to forget about growth to stop climate change

Economic expansion cannot be achieved forever if greenhouse gases are to be curbed, warns the leading economist and author of the UK's government's report on climate change

The Guardian (U.K.), Sept. 11, 2009

Rich nations will need to reconsider making growth the goal of their societies, according to the leading economist who wrote the government's report on climate change.

Lord Stern said that although robust expansion could be achieved until 2030 while avoiding dangerous levels of greenhouse gas emissions, rich nations may then have to consider reining in growth.

"Will other restraints kick in? Probably, they will," said the former World Bank chief economist and author of the 2006 Stern review on the economic costs of climate change. "At some point we would have to think about whether we want future growth. We don't have to do that now." The priority, he told the Guardian, was to break the link between carbon emissions and economic output.

In a speech at People's University in Beijing, Stern said the world's challenge was to reduce total carbon emissions from just under 50 gigatonnes now to 35 by 2030 and 20 by 2050. By that time, he said, the average for each of the predicted 9 billion people in the world would be two tonnes. If done equitably, this would require a cut by the US of more than 90% - each American now uses 25 tonnes of carbon a year.

To meet Stern's goals, the world's big economies, including China, would have to halve carbon emissions relative to GDP in each of the next two decades.

Stern said there was a good chance of agreement at the UN climate talks in Copenhagen in December on a framework to set a total carbon target for 2050 and a series of steps towards reaching that goal. "We probably won't do all the work in Copenhagen, but I think we can at least get the framework of a deal," he said.

He praised recent moves by Japan and the US to set more ambitious carbon reduction targets and Gordon Brown's proposal that rich nations set aside $100 billion a year from 2020 to help developing nations deal with climate change. However, he said twice this figure would probably be necessary to help those countries mitigate greenhouse gas emissions and adapt to more frequent extreme weather, rising sea levels and other consequences.

"The world has moved strongly in a good direction but & it is not moving fast enough," Stern said. A former lecturer at People's University, he said China's role would be crucial. The country is on course to meet its latest five-year target to improve energy efficiency by 20%. Stern said he expected Beijing to set even stronger goals in the next plan from 2011.

Though China's national per capita emissions are far lower than the US and Europe, Stern said 13 Chinese provinces had higher per capita carbon emissions than France. Six of them are higher than Britain's.

"China is so big that unless China does that, this is not going to work," said Stern, referring to efforts to curb greenhouse gases from human activity, especially carbon dioxide from fossil fuels. "This is never going to work unless developing countries are involved," he said.

Stern, now a professor at the London School of Economics, said Beijing should shift the economy away from heavy industry, manufacturing for exports and other high-emission activities.

Instead, he said it should focus more on domestic consumption, service industries and low-carbon technology.

Stern added that the global situation is now worse than he set out in the Stern review in 2006. The pace of climate change has outstripped predictions, prompting the economist to revise his estimate of the amount of money governments should spend on countermeasures from 1% to 2% of GDP.

"Emissions were higher than forecast. Also the ability of the planet, particularly the ocean, to absorb carbon was less than we assumed. The effects of climate change were also coming faster ... so I argued more should be done," he said. "But even at 2% of GDP, it would still be way way below the cost of inaction."