The Stern Review

I am told that the Stern Review: The Economics of Climate Change which came out in 2006 carried a lot of weight in convincing more of the global business community that climate change is a real force to be reckoned with - believable to them as it came from economists they trust.  I guess since it took that long they could do nothing but be blunt with the analysis and recommendations.  They even call climate change "the greatest and widest-ranging market failure ever seen".

The first sentence reads "The scientific evidence is now overwhelming: climate change presents very serious global risks, and it demands an urgent global response." Welcome to the club, the scientific evidence has been overwhelming for some time... but it just shows how much effective communication in the right frame and the right channels is worth more than the opposite in quantity.

It makes it very clear that climate change threatens the ability for humans to meet their basic needs, and that the transition to avoid this (i.e. a low-carbon economy) will also bring many opportunities.  I often find it odd how many businesses/industries baulk at change (and there are plenty doing that at the moment), when change is the only thing that is constant, and innovation is what separates the leaders from the strugglers.  After all, they are very clear about the way things are heading: "markets for low-carbon technologies could be worth at least $500bn by 2050".

It is uplifting to see that the authors called for "Greater international co-operation to accelerate technological innovation and diffusion" to reduce the costs in this transition.  Businesses are still run by humans, and it is a very strong human trait to band together on the door of global threat - so hearing this from a community that values competition highly shows that they 'get it'.

The main point of their report that: "The benefits of strong, early action considerably outweigh the costs" by addressing the issue with prevention they estimate around 1% annual GDP spending to 2050, as opposed to 5-20% if we would rather clean up the mess.

When reading the recommendations, especially the ones that involve government intervention, I couldn't help but feel disappointed that our NZ government's actions don't live up to (m)any of them.  They continue to want to be a part of the dinosaur economy by cutting up our virgin landscape for lignite and are systematically weakening our ETS one review at a time so that is far from showing people the true cost of their actions and consumptions.  I continue to hold out hope though, I'd love to see a clean green NZ that leads in this just as it did in many other moral topics.