Launch green economic revolution now, says Stern

Catherine Brahic, New Scientist 21 Jan 09;

Never mind the downturn, a green economic revolution must be launched within months, one of the world's top economists has told New Scientist.

"You do hear voices saying now is not the moment," says Nicholas Stern, former head of the World Bank, in an exclusive interview. "Now is precisely the moment to make the change" to a low-carbon economy.


Stern believes low-carbon technologies have the potential to bring nations out of the recession and fuel economic growth that will be sustainable in the long-term, transforming society in as striking a way as railways and information technology did in previous centuries.

To reverse the slowdown, politicians and economists have ordered some of the biggest cash injections in decades. Interest rates in many countries have fallen sharply. "That means investment opportunities are there at lower cost," says Stern.
Act now

As part of a comprehensive fiscal package, he says, governments must also invest in the construction and transportation sectors that will provide jobs and long-term infrastructure. "Home insulation, making buildings much more efficient, can be done quite quickly," and often with the kind of skills possessed by many workers that are unemployed during the recession.

"It has got to be fast, though," Stern stresses. "The fiscal expansion has got to be put in place, the policy decisions have got to be taken in the next three to four months. They take time to kick in. "The urgency of decision making should be very clear to everybody. A package that is formulated and decided upon at the end of 2009 and early 2010 will be a package that's too late."

Stern was speaking last week as he prepared an article for New Scientist which outlines his latest assessment of the cost of addressing climate change (see Decision timeMovie Camera). In February, the team which put together the 2006 Stern Review on the cost of climate change will publish an updated assessment.
New world

Since 2006, which alerted the world to the relatively low cost of tackling the causes of climate change compared with mitigating its effects, Stern says the situation has changed in every respect.

From a scientific point of view, studies suggest the effects of climate change will be worse and happen faster than was thought two years ago. The technical horizon, says Stern, appears more promising. "The focus in this area has led to such activity and creativity on the research and development fronts that the range of technologies available to us looks even more rich and exciting."

The political situation is also more optimistic, he says. "The focus and commitment of the leaders of the world has changed remarkably in the last few years - the election of Barack Obama of course being an enormous change in the US. In China too, and in India, the understanding of the issue and how important it is for them has really deepened in the last two years."
Growth story

Finally, the economic outlook is uncertain. "The last two booms were the dotcom boom, where people sold half-baked websites for zillions of dollars, and a housing boom financed by loose monetary policies. They were rather artificial booms, both of them. What we need is to come out of the recession in a way that lays the foundation for what could be the really big growth story of the 21st century."

The policies of governments worldwide in the next few months will set the tone for whether or not the opportunity offered by the recession can be harnessed, says Stern. "If the private sector doesn't get clear signals about where policy is going, it will be a major setback," he says. "If you lose the moment, people may feel that 'well, we'll come back to this'."

That, says Stern, is not an option. Delays mean more carbon dioxide accumulating in the atmosphere, and a greater problem to address further down the road.

Read our exclusive article by Stern: Time for a green industrial revolution

Nicholas Stern is chair of the Grantham Research Institute on Climate Change at the London School of Economics