Stern Report – a summary
Posted by DavidM in Climate change | 2 November 2006
As I’m sure all of you know by now, the Stern Report was published on Monday to a big fanfare.
The review is billed as the ‘most comprehensive review ever carried out on the economics of climate change’. The report was compiled by Nicholas Stern, Head of the Government Economic Service and former World Bank Chief Economist and was commissioned by the Prime Minister, Tony Blair and the Chancellor, Gordon Brown.
This is vital – it is a heavyweight review commissioned and produced by people not related to the environmental movement so if anything, you’d expect it to underplay the issues.
The press has reported the key aspects covered by the report, namely;
- Climate change is real and if left unchecked will have major economic impacts – at least 5% of GDP
- It’s not too late to avoid this and the cost to do it now is relatively low – around 1% of GDP – and the economy would continue to grow
- Greenhouse gas levels should therefore be limited within the range 450 - 550ppm CO2e (CO2 equivalent). This compares to ? currently. However, further in the report this is clarified as a maximum reached in the next ? years and reductions thereafter.
The report recommends three ways to achieve this.
First, by recognising the social cost of climate change through carbon pricing – taxation, emissions trading or regulation.
Second technology policy needs to encourage low-carbon and high-efficiency products.
Finally, barriers to energy efficiency need to be removed, such as educating individuals about climate change and what they can do about it.
The Stern Report recognises that while the UK may be one of the larger contributors to climate change, the response needs to be global. It calls for ‘strong frameworks for co-operation’ to include expanded emmissions trading schemes, technology co-operation, reduced deforestation and action to help the poorest countries adapt to environmental change.
Overall this seems to be an excellent report. It may not say everything environmentalists would like, but it recognises climate change as a real threat, it outlines clear economic reasoning for action and highlights that taking such action now is far from damaging to the global economy.
