Sustainability and policy - Climate Change: Biological and Human Aspects - page 494

has taken an international lead to encourage all nations to invest together in addressing
greenhouse gas concerns. This was not a purely altruistic action. British politicians
did not want to make their own nation's markets uneconomical through unduly high
energy prices (that is, significantly higher than Western European nations) to pay
for renewable development. In short, the UK is in favour of multilateral action to
address greenhouse emissions and so it only undertakes limited unilateral action. The
two leading UK Parliamentary parties have maintained this approach for over two
decades.
Economics lies at the heart of politics, and also at the heart of climate change
policy issues. That successive UK governments have recognised climate change as a
problem since the 1980s, yet have failed since 1990 to set in train strategic policies
to meaningfully reduce UK emissions of greenhouse gases, exemplifies political
weakness as far as the environment is concerned. To help address this, in July 2005 the
Government (through the Treasury's Chancellor) asked the former World Bank Chief
Economist Sir Nicholas Stern to conduct an independent review of the economics
of climate change. The review was taken forward jointly by the Cabinet Office and
Her Majesty's Treasury. It reported both to the Prime Minister and the Chancellor on
30 October 2006 with an electronic version placed on the Internet, and a mass-market
paper version published in 2007 (Stern, 2007).
Its conclusions were that climate change will incur real costs, both in terms
of reducing the causes (reducing greenhouse emissions) and in terms of deal-
ing with its impacts. Stern warned that costs could be as high as 20% of the
world economy. However, by taking 'strong action' now we could 'avoid the worst
impacts'. Action could cost as little as 1% of the world economy if emissions
were reduced. However, delay would exacerbate matters. Importantly, Stern's report
said:
Action on climate change will also create significant business opportunities, as new
markets are created in low-carbon energy technologies and other low-carbon goods
and services. These markets could grow to be worth hundreds of billions of dollars
each year, and employment in these sectors will expand accordingly. The World
does not need to choose between averting climate change and promoting growth and
development. Changes in energy technologies and in the structure of economies
have created opportunities to decouple growth from greenhouse gas emissions.
Indeed, ignoring climate change will eventually damage economic growth. (Stern,
2007)
This argument was not new. Some scientists and the green lobby had noted previously
that climate change would have severe costs. Further, some had said that adopting
low-fossil carbon measures would be advantageous through freeing an economy from
its dependence on dwindling finite fossil resources. Indeed, both these arguments were
detailed together nearly a decade earlier in Climate and Human Change: Disaster
or Opportunity? (Cowie, 1998a). What was new from Stern was that this message
had come from an independent, yet Government-commissioned, review led by a
senior economist. What remains to be seen is whether such measures will be adopted,
especially as at the time of publication the UK was still struggling to keep on track
to meet its targets to reduce emissions.