The Stern Review: Year zero in the fight against global warming
The idea that the long awaited Stern Review would pack more of a punch than your average climate change report became apparent when the media began speculating on its content a full seven days before publication.
The day before publication, political activity surrounding the report had reached fever pitch with David Cameron furiously placing himself in front of any available television camera and the convenient ‘leaking’ to the press of Labour’s green tax plans. Why all the political maneuvering? It’s the economy stupid.
The Stern Review is the first major contribution to the climate change debate from an economist as opposed to a scientist. While countless scientific reports warning of impending global catastrophe have failed to prick the consciences of politicians, the Stern Review seeks to hit governments where it really hurts – in the pocket. The basic premise of the review produced by economist Sir Nicholas Stern is a simple one, act now or pay through the nose later. What’s more, the financial case it lays out for tackling climate change is terrifyingly watertight.
Findings of the report
The report warns that if no action is taken now, the effects of climate change could shrink the global economy by 20%. While developed countries are by far and away the biggest polluters in terms of carbon emissions, it is the third world and developing countries which will feel the disastrous impact of unchecked global warming. Here are just a few of the likely scenarios;
- Up to 100 million people are likely to be displaced by floods from rising sea levels, from Bangladesh to the Norfolk Broads
- Up to 40% of wildlife species on the planet will be driven to extinction through the loss of their natural habitats
- Widespread droughts could create hundreds of millions of “climate refugees” who will be forced to leave their own countries, increasing the burden on host countries and ratcheting up social tensions
But there is some good news. The Stern Review optimistically concludes that it is not too late to make a difference now. The cost? 1% of global gross domestic product. It sounds like a lot but paying for it later could cost up to twenty times more, visiting economic meltdown on the planet on the scale of the Great Depression in the process. The cost is likely to be met by a combination of taxes and the rationing of carbon emissions.
The knee-jerk reaction
The bad news is we’re probably going to start feeling the pinch of that 1% very soon. The review was commissioned by Gordon Brown who pledged to lead the international effort in fighting climate change. And as green issues come to dominate the political agenda more and more, Brown has delivered a blow to the eagerly green Conservatives by appointing environmental poster boy Al Gore as the international environment adviser to the UK.
The chancellor is determined to create “a low-carbon global economy” with strict limits placed on emissions and a scheme where governments and businesses can buy or sell carbon allowances. But until this carbon trading global market is in place, the shortfall is likely to end up with the man on the street. Expect a raft of green taxes in the Chancellor’s pre-Budget speech targeting motorists, air travellers, purchasers of consumer electronics and poor recyclers.
The global impediment
Of course, the UK is not going to solve the problem just by paying more taxes. Global warming is an international issue and as such requires a collective international response, not least from the biggest polluters. Sir Nicholas Stern will soon be taking the findings of his report to the US in an attempt to change attitudes to climate change. No small feat when you consider that the findings of his review propose urgent action above and beyond the limits imposed by the Kyoto Treaty, a treaty which the US refuse to ratify to this day.
A Whitehouse spokesperson said that President Bush had yet to read the 700-page report. Perhaps not a surprise when you consider that the President has in the past refused to accept the very existence of the idea climate change. One can only hope that the economic argument may persuade him to join a war on global warming, certainly a war that provides a more tangible and identifiable enemy than the elusive terror he currently seeks to quell.
Getting the US on board demonstrates the mammoth task in hand. And if the world’s major polluters do agree to act, finding a consensus view of the way forward will present an even greater problem, particularly when you consider the review's suggestion that the world’s richest countries should be responsible for 80% of the reduction in carbon emissions by 2050. But the urgency of the review, its economic basis and the speed with which Gordon Brown has embraced it suggest that it may prompt something of a sea change in the attitudes of global leaders.
A change in behaviour
It is this same behavioural change that green taxes will be seeking to impose on us. But rather than simply accepting them, we should also be using our power as consumers and voters to ensure that the money generated does not simply line the pockets of the Treasury. Motorists, potentially one of the most powerful pressure groups in the country, should insist that the money from green taxes be redistributed in the development and deployment of bio-friendly fuels. If, as Labour’s leaked tax plans suggest, council tax is set to rise, then local councils should become more accountable for their own carbon emissions and the efficiency of their recycling facilities.
Furthermore any party that seeks to govern in the UK should only be elected to do so if they agree to sign up to binding annual targets for reducing carbon emissions. Similarly, ruling governments must be held accountable for their own expenditure. An unpopular overseas war has in the past few years swallowed up more money than that magic number of 1% of GDP. Imagine if that same amount of money was made available to homeowners in the form of grants to enhance the eco-friendly status of their houses?
If a country refuses to agree to curb its own carbon emissions, consumers have the power to boycott products exported by that country. Similarly, big business and industry can be forced to reduce their own carbon footprint if the pressure exerted by consumers is compelling and ultimately irresistible.
Idealist sentiments for certain but the economic nature of the Stern Review means that governments across the world will find it difficult to ignore the compelling evidence of its findings. To ensure that it is not just tax payers who shoulder the burden, it is perhaps more important than ever that we all do our bit individually to exert pressure for change wherever we can. After all, should big business, industry and particularly government, be allowed to get away with it?