Tackling climate change could bring green growth for the next three decades

Although we may have underestimated the risks of a global environmental crisis, we were also too pessimistic about the opportunities new technologies would offer us to take action, writes Nicholas Stern

- Nicholas Stern

When I started working 20 years ago on a review of the economics of climate change for the Treasury, many of the impacts of climate change were theoretical and in the future.

It's now devastatingly clear, from experience and advances in science, that we underestimated the scale of the risks facing the world.

It's not just the damage from extreme weather, such as the devastating floods in Pakistan this summer, or Hurricane Melissa, that threaten our economies, but the possibility that we might breach thresholds in the climate system, such as destabilisation of the polar ice caps in Greenland and west Antarctica, the collapse of the Amazon forest system and the thawing of the permafrost.

Every time we look at the science, with every IPCC report, the risks seem even worse.

My review, published in October 2006, concluded that the costs of avoiding the great risks from climate change (around 1% of global GDP per year) would be lower than the costs of inaction (between 5% and 20%). Now the conclusion is even stronger. The questions are no longer about whether to act. They are about how.

We have in our grasp an approach to growth and development which breaks the link between economic activity and environmental destruction, and which is much more attractive than the dirty, destructive models of the past.

This is not a story of growth forever but of growth over the next three decades, which can deliver development across all its dimensions. Degrowth is not a realistic option. We won't get to net zero through zero consumption.