The climate-change choice

Andrew Simms
1 November 2006

Overuse tends to dilute the meaning of telling phrases, especially in politics. But it does seem that the Stern review on the economic impacts of climate change, published on 30 October 2006, represents a genuine "tipping-point". The question is, in which direction?

After years in the economic wilderness, a chemistry of awareness, science and political opposition has finally landed the issue of global warming where it mattered - at the door of the Treasury, Britain's finance ministry. Some assiduous lobbying helped in pointing out the monstrous threat that climate change represents to international targets for poverty reduction, in which the chancellor, Gordon Brown, invests so much political capital. But the process and its outcome is more important even than that.

A rare act of seamless political unity between Brown and prime minister Tony Blair saw them declare global warming the "greatest market failure" the world has ever seen; and the Stern review itself to be the most important report published since New Labour came to power in 1997.

The Stern Review on the Economics of Global Climate Change published its report. Its author Nicholas Stern, former chief economist at the World Bank, says:

"There is still time to avoid the worst impacts of climate change, if we act now and act internationally. Governments, businesses and individuals all need to work together to respond to the challenge. Strong, deliberate policy choices by governments are essential to motivate change. But the task is urgent. Delaying action, even by a decade or two, will take us into dangerous territory. We must not let this window of opportunity close."

Also in openDemocracy on the Stern review and the climate-change debate:

Simon Zadek, "Accountability: the other climate change" (31 October 2006)

But, just as these political leaders seemed to talk up the need for immediate, radical action on climate change, behind-the-scenes advisers seemed to be talking down Britain's role in contributing to the problem. Every official briefing for journalists and analysts emphasised that the country's greenhouse-gas emissions represented only 2% of the global total. With our paltry size-2 carbon shoes, we were told, any benefit from emission cuts in Britain itself would be erased by growth in the emerging giant, China.

Here, official spin dramatically understates the United Kingdom's true leverage. If emissions from the global activities, products and services of "UK plc" are added, we actually find ourselves walking around in something between size-11 and size-15 carbon clodhoppers. Because so many heavy extractive industries are listed on the London Stock Exchange, the country is in a prime position to push for much greater cuts. For example, to send the right economic signals to investors, we could require companies like Shell and BP to publish what proportion of their known oil reserves are, in effect, unburnable, and therefore a liability rather than an asset - because to burn them would trigger irreversible climate change.

But where should that line be drawn, and what would trigger, dangerous, irreversible climate change? On this vital question Stern is both revealing and coy.

An elusive landmark

The report says that a temperature rise of more than 2°C above pre-industrial levels is likely to trigger "rapid, major, irreversible" impacts from climate change. Assuming that's a sensible place to draw the line, Stern then shows that to keep a good chance of staying below that level, greenhouse-gas concentrations should not go beyond 450 parts-per-million-by-volume (ppmv) CO2 equivalent. At current rates of accumulation in the atmosphere, that gives us less than ten years to turn the corner. The logical next question faced by Stern brings on a certain shyness, born of the knowledge that it represents economic heresy.

The world economy depends for more than 80% of its energy on fossil fuels. Even allowing for greater efficiency and more renewables, global economic growth has a carbon value, or "intensity". It could be low or high, depending on what we do, but it has such a value nonetheless. This means that to hit any given target to stabilise atmospheric greenhouse gases, there will be a level of growth commensurate with doing that.

Andrew Simms is policy director and head of the climate-change forum at the New Economics Foundation (nef). He is the author of Andrew Simms, Ecological Debt: The Health of the Planet and the Wealth of Nations (Pluto, 2005)

Also by Andrew Simms in openDemocracy:

"The accidental internationalists"
(5 December 2001)

"Ecological debt and climate change"
(13 May 2005)

"Capitalism, the environment and sustainable development"
(6 December 2005)
– part of a symposium on the work of Jonathon Porritt

Yet, at the launch of the Stern review, Blair, Brown and Nicholas Stern held on to the mantra that there is no clash, or even connection, between growth and meeting targets on climate change. We can, in effect, have our global climate and eat it. It is obvious to a schoolchild studying maths, chemistry and physics - if not to an economist - that this is not the case. The multi-trillion dollar question Stern unwittingly asks is: what level of global economic growth is compatible with preventing runaway climate change? And, the question that flows directly from that is: how will it be divided around the world?

Both prime minister and chancellor called for a new global deal that will limit emissions internationally and allow carbon entitlements to be traded. That means persuading countries like China and India to be part of a global cap. But the UK has been burning fossil fuels unrestrained for over 200 years. So, to get developing countries on board, when we have agreed the size of an acceptable global-emissions pie, how is it to be shared out among the nations and people of the world? Will it be on the basis of current inequality, or will it be on the basis of equity, as agreed at the heart of the United Nations Framework Convention on Climate Change?

The answer to this question will determine whether or not we in the rich west will be able to win the support of developing countries and are then able to prevent catastrophic climate change. Yet when the author of the Stern report and the politicians who commissioned it were asked how they would deal with the tricky question of allocation - an issue that falls unavoidably between capping and trading carbon emissions - there was silence.

So, a landmark publication on how to save the planet merits the assessment that Orson Welles once memorably delivered to his own latest film: "another flawed masterpiece". Stern seems reluctant to follow his own argument to a logical conclusion. The review points out how to keep the world safe; but, by entertaining levels of greenhouse-gas concentrations that will cause "rapid, major and irreversible" warming, it flirts with scenarios that would have apocalyptic consequences - falling directly on the people in developing countries whose interests Stern, Blair and Brown espouse.

A tipping-point, yes. But will it tip us out of denial or, because it cannot face the economic heresy of questioning growth as an overarching policy objective, over a cliff marked "global warming"?

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