Stern calls for ‘green’ global stimulus

By Andrew Bounds in Manchester
Published: January 28 2009 23:22

The world needs a “green” stimulus of around $2,000bn to pull it out of recession, Lord Stern of Brentford, the climate economist, has said.
Lord Stern, author of the eponymous review in 2006 that laid out the economic case for fighting global warming, said that by spending about a fifth – $400bn – on green technologies the world could begin a path of sustainable growth.

However, he warned climate scientist and campaigners in a speech at Leeds University that there were only a few weeks to convince governments to back the idea.
“The arguments need to be made now because they need to get into the budgets being prepared by governments in the northern hemisphere which are announced in the spring. If we wait we will not succeed in giving a push to get it out of this recession. It will be too late.”
In an earlier interview, Lord Stern said that advances in science since he published his report had revealed the situation to be more alarming still. The concentration of greenhouse gases in the atmosphere should be kept lower than he recommended, requiring faster and deeper cuts in emissions.
Rather than the range of 450-550 parts per million of carbon dioxide equivalent, he said it would need to be capped at 500ppm. The level now stands at 430ppm and is rising at 2-3ppm a year.
The fiscal stimulus should provide work for unemployed builders fitting insulation in homes and fund low-carbon technologies such as research on installing equipment to capture carbon from power plants and store it underground, he said.
Lord Stern, who advises José Manuel Barroso, the president of the European Commission, said that he was cautiously optimistic that the world could clinch a deal on reducing greenhouse gas emissions at a meeting in Copenhagen this year.
He said the election of Barack Obama was of “huge importance” and if the US president took decisive action to match his words on cutting emissions it could convince India and China to agree long-term reductions.
“It has given a great boost to the prospects in Copenhagen and . . . the rest of the world will respond. They have to see actions as well as words,” he said. “There was a great hunger for American leadership.”
He was launching the Centre for Climate Change Economics and Policy, a £5m joint initiative of the London School of Economics and Leeds University, which he chairs. Munich Re, the German reinsurance giant, has put in £3m and commissioned research on the risks and opportunities for its business from climate change.
Copyright The Financial Times Limited 2009