Nicholas Stern on climate change

2007-02-21

in Daily updates, Economics, Oxford, Politics, Science, The environment

Saint Edmund’s Hall, Oxford

During the initial coverage of Nicholas Stern’s report on the economics of climate change, I wondered why the media was paying so much attention. After all, the man is an economist reporting on something that scores of scientists have addressed comprehensively through the IPCC process. Now that I have heard him lecture, and spoken briefly with him personally, I have a much better sense. The man is what Karen Litfin calls a ‘knowledge broker,’ translating scientific data into policy options.

His basic position is the realistic liberal optimist one:

  1. Climate change is real and potentially devastating
  2. It is essentially a massive economic externality
  3. Regulating greenhouse gas (GHG) emissions is the way to stop it
  4. This can be done at moderate cost (1% of GDP) and without a massive change in (a) the basis of economic activity within the developed world or (b) the way in which people choose to live their lives.

He acknowledges that the energy balance needs to shift dramatically. In order to be responsible, he says, we need to shift all electrical production in the rich world to carbon neutral forms (renewables, nuclear, and possibly hydrocarbons with sequestration) by 2050. By that time, land transport should also be based on power sources that do not emit GHGs, whether because they are using stored electricity, or because they use fuels that are GHG neutral. India and China need to be encouraged to sequester the CO2 emitted from their coal stations, probably at the expense of the rich world. All in all, rich states should bear 60-80% of the costs of mitigation.

He focused a great deal on atmospheric CO2 levels. His target is to stabilize between 450ppm and 550ppm. This would lead to a likely scenario where mean global temperature rises by about 2 degrees Celcius (though by much more at the poles, given the nature of the climatic system). On the basis of a ‘business as usual projection’ we will hit 450ppm in eight to ten years. To stabilize at 450ppm, we would need to slow the rate of growth in GHG emissions immediately, having it peak in 2010. Then, we would need to reduce at about 6-10% a year thereafter. If we delayed the peak to 2020, we would likely be at the 550ppm portion of the range: an area that the German head of climate change policy expressed grave concern about, during the question session. Stern himself said that 550ppm is the “absolute upper bound” which it would be “outrageous” to exceed.

As for his very controversial decision about discounting rates, I think he defended himself admirably. He broke it into two bits: the possibility there will be no future generations beyond date X (they ascribed a 0.1% chance a year to an event like a comet or gamma ray burst that would simply snuff humanity out) and the strong likelihood that people in the future will be richer. The latter means that it may be economically efficient to delay some of the costs of dealing with climate change, especially given the probability that new technology will emerge.

I need to move on to other work, though I could discuss his comments for many thousands of words. I will transfer my handwritten notes to the wiki later this evening and link them here: notes from Nicholas Stern’s 21 February 2007 address to Oxford University.

PS. A few weeks ago, my default thesis music was Jason Mraz‘s superb album “Live at Java Joe.” Now, I am listening to Enter The Haggis‘ frantic song “Lannigan’s Ball” from their album Aerials over and over again.

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{ 6 comments… read them below or add one }

Milan February 21, 2007 at 8:21 pm

I love how the genre of Enter the Haggis is listed as ‘ Explosive Canadian Celtic Fusion.’ It is a truly apt description.

I have listened to “Lannigan’s Ball” 34 times in the last 24 hours.

R.K. February 21, 2007 at 10:26 pm

To stabilize at 450ppm, we would need to slow the rate of growth in GHG emissions immediately, having it peak in 2010. Then, we would need to reduce at about 6-10% a year thereafter

If that’s what it will take, I think we are royally screwed. There’s no hope in America until a new administration in 2008. Then, they would need to crack the whip pretty hard to deal with emissions growth between the present and then.

Anonymous February 22, 2007 at 4:09 pm

ROUNDTABLE DISCUSSION

CLIMATE CHANGE AND THE CANADIAN RESPONSE: PARTIES, POLICY…PROCEDURE?

Date: Mon 26 February, 7:00pm (week 7)
Venue: Magdalen College, Old Law Library

On February 2nd, 2007, the United Nations’ Intergovernmental Panel on Climate
Change (IPCC) released a report stating – with over 90% certainty – that
global warming is the direct result of the accumulation of greenhouse gases
produced by human activity. These findings reconfirm that Climate Change is a
global concern of undeniable urgency – one which threatens to bring about
ecological and economic upheaval on an international scale, and one which we
can actually do something about.

On February 14th, 2007, the Canadian House of Commons passed a Private
Member’s Bill – introduced by Liberal backbencher Pablo Rodriguez and put
forth by a unified opposition – which forces Stephen Harper’s minority
Conservative government to “ensure Canada meets its global climate change
obligations under the Kyoto Protocol.” Since its election in January of 2006,
Harper’s Tory administration has been ideologically and effectively opposed to
the UN’s Kyoto Protocol, which assigns mandatory targets for the reduction of
greenhouse gas emissions to signatory nations. It was under Liberal leadership
that Canada formally ratified this treaty in 2002.

On Monday, February 26th, 2007, the Canadian Society will host a roundtable
discussion on Climate Change which will address the following questions: (1)
What is Canada – as a wealthy, leading nation – actually doing to combat
global warming? (2) Is the Canadian party system as it stands potentially
hindering the implementation of widespread and binding environmental policies?
(3) What can and should Canadians be doing to hold their government
accountable to younger and future generations on this issue?

The event will be held at Magdalen College, in the Old Law Library, from
7:00pm to 9:00pm. Please come on time, as the room has a limited capacity.
Questions/comments about the discussion: katie.musgrave@ccc.ox.ac.uk

There will be light refreshments available, including wine.

Cate February 22, 2007 at 6:22 pm

If it were necessary to make radical changes in our ways of life (no private cars, for example) is it something we could ever do?

. January 9, 2008 at 10:54 am

Via WSJ, Sir Nicholas Stern says he underestimated the risks of climate change in his influential report.

“We underestimated the flow of emissions from developing countries, especially China,” he said, observing that emissions of greenhouse gases from China over the next 25 years will equal the total emissions from the U.S. and Europe over the last century. Emissions from developing countries and developed countries must be capped, he said, but the ethics of allocating the pain are delicate. “If you’re consuming the goods, you can’t blame the location of the factory,” he argued.

. April 17, 2008 at 12:55 pm

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 increases.”

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