New Stern Warning: Unabated Climate Change Would Dwarf Financial Crisis
by Stacy Feldman - Oct 27th, 2008
in
As the world slips into what could be the first truly global recession, Lord Nicholas Stern, ex-chief economist of the World Bank, has delivered a new warning to the rich nations of the world:
"We have seen the consequences of ignoring risk in the current economic and financial crisis. It has already led to negative growth in rich countries. The risk consequences of ignoring climate change will be very much bigger than the consequences of ignoring risks in the financial system."
Ouch.
Lord Stern, as you may recall, is the author of the seminal report on the economics of climate change that found that doing nothing on global warming would wreck the global economy, deflating it by a fifth and creating risks "on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century."
To avert disaster, he concluded, nations would need to spend one percent of their GDP. But that was back in 2006. And it turns out, climate change is happening much faster than had been previously thought. So in June of this year he issued a correction: The cost of avoiding climate catastrophe is actually two percent of global GDP.
Still much cheaper than business as usual. Which brings us to Stern's latest message to carbon-polluting nations. Act now with a common sense approach to managing the climate risk (beginning today and for the next 30 to 50 years) or pay much bigger losses later, a la Global Recession 2008.
In an op-ed last week in the Guardian, Green Routes to Growth, Stern was adamant that immediate climate action would drive economic growth: "Let us grow out of this recession in a way that both reduces risks for our planet and sparks off a wave of new investment."
He wrote:
The International Energy Agency estimates that world energy infrastructure investments are likely to average about $1 trillion a year over the next 20 years. If the majority of this is low-carbon, and some of it is brought forward, it will be an outstanding source of investment demand. So too will be the investments for energy efficiency, many of which can be labor-intensive and are available immediately.
Stern’s latest warning/call-to-action comes on the heels of a new Deutsche Bank report, "Investing in Climate Change 2009 -- Necessity and Opportunity in Turbulent Times" (pdf). The study argues for governments to invest heavily in "green" infrastructure as a stimulus to avoid severe recession.
Encouraging investment in renewable energy is a key focus. Energy efficiency technologies are obviously highly desirable in economies facing recession. Infrastructure stimulus can be tied directly to climate-sensitive sectors such as power grids, water, buildings, and public transport, which present a vast field for the creation of new technologies and jobs. Governments have before them a historic opportunity to 'climate proof' their economies' as they upgrade infrastructure as a core response to any economic downturn.
Bottom line: There is no excuse for inaction on climate change ever. Doing nothing is the real gamble even (if not especially) in a time of financial crisis.
Related Stories:
Creating the Next American Economy
$3.8 Trillion: The Annual Price America Will Pay for Dilly-Dallying on Climate Change
Money, Money Everywhere But Not for Global Warming
Top 5 Reasons Why the Mortgage Crisis = Global Warming
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Simple Ideas There is a
Simple Ideas
There is a principle called Ockham's razor which is attributed to the 14th-century English logician and Franciscan friar, William of Ockham. It basically states that – "All other things being equal, the simplest solution is the best."
The following are two simple ideas that effectively create the ideal social construct.
Simple Idea #1
1. Socialize ALL Land
2. Charge leases on ALL Land based on demand.
3. Return 100% of the resulting revenue to every man, woman and child in the form of a yearly dividend check.
4. Make the Universal Birthright of Land an Everlasting Standard in the education of every Child.
This effectively makes the average piece of Land Free for every Living Soul and restores our Natural Birthright as well as coupling our social construct to the Principles of Life.
Simple Idea #2
1. Remove EVERY FORM of tax
2. Implement a Tax on ALL new goods based on the resources they contain and the resources they use in production and delivery (this can easily be implemented with the current barcode system used at the checkout)
3. Use this system to encourage/discourage various resource usages (High tax on non-renewable/ecosystem damaging products and low/no tax on renewable/ecosystem enhancing products) and to encourage purchasing of local products.
4. Use the resulting revenue to fund infrastructure expenses and the restoration of ecosystems.
This effectively encourages the creation/use of longer lasting, high quality products as well as encouraging recycling and reuse of existing products.
Idea #2 effectively constrains the ravaging appetite of the capitalistic consumer society within the Boundaries of Sustainability while Idea #1 effectively encloses both Sustainability and capitalism within the Principles of Life.
That's it!!! Simple and Effective
Scott
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