The economic case for a low carbon path was presented by Sir Nicholas Stern, former Senior Economist to the World Bank and author of the landmark Stern Review. Five years ago, he presented his economic analysis to the UK government -- forecasting that failing to act to avert the climate crisis would deal a crippling $7 trillion hit to the world economy.
This morning in Cancun he updated that report. On one hand he sees the pace of climate change is faster then anticipated. Ice sheet melt in particular has accelerated. His report had said stabilization could be at 450-550 ppm. He now believes 450 ppm is the upper limit.
On the other hand, he sees the private sector as having done much more than was expected. The last five years have been a fertile time for investments in a new industrial revolution. Nothing less than a full economic revolution is required. Tinkering around the edges will not be sufficient. He compared the last five industrial revolutions -- 18th century textile, late 19th century steam and rail, 20th century cars and mass production, 20th century information revolution. While all are very different, they share key characteristics. The revolution is preceded by a period of 3-4 decades of intense investments and activity.
In this context, there is a critical role for governments in coordinating. They need to correct for market failure. Greenhouse gas emissions are a large market failure.
He argues forcefully that improving energy efficiency is the top priority, as well as getting rid of subsidies to fossil fuels.
In Stern's view, sector by sector, we can meet the targets required to hit carbon neutrality, or even becoming carbon negative.
And have a positive economic impact at the same time.