Sir Nicholas Stern takes bleaker view on global warming

17.4.2008   (Financial Times)

The internationally influential Stern report on climate change underestimated
the risks of global warming and should have presented an even bleaker view of
the future, according to its own author.

In the 18 months since the government-commissioned review was published, Lord
Stern has faced the wrath of economists and climate change sceptics who argued
he had underestimated the cost of cutting emissions and overestimated the benefits
to future generations.

But yesterday he was defiant, saying – in retrospect – he would have taken a
much stronger stance in the report on the drastic consequences of failing to curb
global warming.

Throwing down the gauntlet to climate change sceptics, Lord Stern, former chief
economist at the World Bank, told the Financial Times yesterday: “We underestimated the risks . . . we underestimated the damage associated with
the temperature increases . . . and we underestimated the probabilities of temperature

And the normally mild-mannered Lord Stern had a robust riposte for one critic,
Lord Lawson, the former chancellor, who this week published a book arguing that
action on emissions was both unnecessary and harmful to the economy. “Lord Lawson
is a nice chap but he doesn’t understand the science or the economics,” he said.

In the report, he (Stern)  estimated the costs of climate change at between 5%
and  20% of global gross domestic product.   But Lord Stern said data published
since the report came out had led him to change his mind.

He highlighted the publication last year of the most comprehensive study yet
undertaken of climate change science.   Conducted by the Intergovernmental Panel
on Climate Change (IPPC), a body of the world’s leading climate scientists convened
by the United Nations, it predicted a temperature rise of 3 °C within the next
100 years. Catastrophic consequences for the planet were predicted unless greenhouse
gas emissions were stabilised and then cut within the next decade.

“The damage risks are bigger than I would have argued. Things like the damage
associated with a 5 ° temperature increase [towards the upper end of the IPCC scale]
are enormous. We can’t be precise about what it would be like but you can say
it would be a transformation,” he said.   “The last time that temperatures had
been at that level “we had a world of swampy forests”.

He defended his estimate of the cost of taking action on emissions, which his
report put at about 1% of global gross domestic product. “Subsequent reports,
[from] McKinsey, the International Energy Agency, the [IPCC], have pointed to
the [Stern report’s] costs of action being roughly in the right ball park. Nothing
[since] has led me to revise the cost of action,” he said.

“I probably would have emphasised the importance of good policy [if writing the
report again today] and how bad policy puts up the costs [of cutting emissions].”

Among the “bad” policies he cited were the first generation of biofuels, using
grain and sugar to make fuel, which he described as “worrying because they directly
compete for fuel”.

Instead, there should be a focus on second-generation biofuels made from rough
grass and agricultural waste.

The UK should aim to cut its emissions by 80% by mid-century, instead of 60%
as proposed at present, he said.

Instead of building only one demonstration plant for carbon capture and storage
technology, as the government proposes, the UK should build two “to show other
countries it is viable”.

In a muted criticism of the government, he said the last Budget, which introduced
“green levies” on cars, was “a good start but we have a very long way to go”.

Lord Stern also urged companies to continue investing in green initiatives even
if the economy slowed down.


Bush to act on emissions,       FT       17.4.2008