A global low carbon economy needs to be created to prevent up to a fifth of the world’s wealth disappearing, the government’s chief economist, Sir Nicholas Stern, has warned in a report, The Economics of Climate Change.

Stern said climate change was the “greatest and widest-ranging market failure ever seen” but its worst effects could be mitigated, if action is taken now.

He added that spending 1% of gross domestic product each year on tackling climate change would help stabilise greenhouse gas concentrations at 25% above current levels. This would cause temperatures to rise by 2-3ºC, which Stern described as “high, but acceptable”.

The report said that tackling climate change would require the introduction of carbon pricing and a wide range of green taxation schemes. Putting a price on carbon would ensure that people and businesses would pay for the “full cost of their actions”.

The creation of a low carbon economy would create a market for low carbon, high-efficiency goods and services, estimated to reach £300 billion by 2050.

Improved energy efficiency was highlighted as a key area where emissions can be reduced. It would also save companies money.

Stern concluded that doing nothing would risk a 5ºC rise in temperatures by the end of the century. This would “transform the physical geography of the world” with rising sea levels and water shortages. He estimated that the cost of flooding in Britain, if temperatures rise by 3ºC or more, would be up to 0.4% of GDP.

n CIBSE welcomed the publication of the Stern Report and its emphasis on mitigating climate change through an increased public sector investment in low carbon technologies.

Bryan Franklin, chair of CIBSE’s policy and consultation committee, said: “Stimulating demand is the most important step in encouraging widespread take-up of existing technologies and encouraging further research and development of new and improved technologies which reduce emissions.”

Source

Building Sustainable Design