Progress towards low carbon economic growth

I am grateful to Tom Whitmey and Leo Barnes for heading over to the lecture and discussion headed up by Lord Nick Stern at the LSE last night. Their notes from the talk are below. I have also added in some new videos from OU learn on policies to cut carbon emissions.

LSE lecture, an overview of progress towards low carbon economic growth and managing the risks of climate change

Speakers : Lord Stern, Michael Jacobs and Gerard Lyons

‘The logic of science gives life to the economics that follows’, Lord Stern.

2 defining challenges of this century are world poverty and climate challenge. ‘If we fail on one, we fail on the other’, Lord Stern.

Greenhouse gas concentration is currently 430ppm (parts per million) CO2e today. We are adding to that at a rate of 2.5ppm per year and it’s likely to reach 750 ppm by the end of the century. The level of concentration would result in a large probability, perhaps 50%, of an eventual temperature increase of more than 5’c from before the pre-industrial era. However, it would be a profound mistake to see 2’c as unobtainable. Holding below 500ppm is necessary for a 50-50 chance of staying below 2’c.

Physical and human geography would be transformed with temperature increases of 5 degrees celsius or more. This is likely to lead to a global migration, millions or even billions of people, which will cause significant global conflict.

Additionally, we cannot afford any delays in investing more heavily in low carbon growth, a delay of 10 years would increase our ppm from 430 to 465 making it far more costly to reduce the effects of carbon emission.

• China has certainly taken the initiative with this issue. The Chinese have proposed a cut in emissions per unit of GDP (emissions intensity) of 40%-45% from 2005-2020.

• China’s most imminent plan, named the 12th plan will reduce carbon emissions by 17% from 2011- 2015. The world’s emissions budget for 2 degrees celsius is around 30-32 billion tonnes in 2030. China would therefore be close to half of the world’s target, with 20% of the population.

• If world emissions are to be cut by a factor of close to 2.5 (nearly 50 billion tonnes in 2010) and world output grows by a factor of 3, emissions must be cut by a factor of 7 or 8. Surely an industrial revolution by any definition.

Energy efficiency must be across the economy. Agriculture, construction and electricity generation must become more efficient to achieve the goals that Lord Stern deems necessary to ensure that our ways of life become more sustainable.

• The power of the example is essential to this initiative- British telecom saved £1.5 billion between 2002 to 2006 by reducing energy costs.

Recent innovations include solar films printed on aluminium film using nanotechnology.

• Bacteria that produce biofuels or soak up co2 from the atmosphere.

Low carbon growth is the only option in the battle for higher living standards. Abandoning growth and focusing solely on low carbon ways of life will not solve the problem, there needs to be a balance.

Risk management is essential as low carbon technology is risky in the same way that high carbon technology is.

Investment in research and development has decreased from $40 billion during the oil spikes of the late 1970s and early 1980s to $20 billion today.

Michael Jacobs - special adviser to Gordon Brown 2004 - 2010.

Spoke about the political implications of the ideas put forward by Lord Stern.

Political opinion over the last 2 years has changed from a ‘climate science’ agenda to an ‘economic agenda’ for the climate problems we face.

The theory of ‘path dependence’ - the notion that once we are fully committed to one path of growth e.g. the use of low carbon stock, we cannot compare it with another eg the use of high carbon stock.

The theory of ‘path dependence’ must come into play when we shift all capital stock from high energy stock to low energy stock.

Whilst there is still the problem amongst politicians of long term, low carbon infrastructure building vs short term, ‘people pleasing’ policies, there is hope for low carbon technology as all politicians are desperately trying to find the next form of growth as global economic growth has slumped since 2008.

Gerard Lyons

The world, mainly thanks to China and India is currently experiencing an economic ‘super cycle’ - exponential growth that lasts a generation (something the west experienced during the industrial revolution).

• The global economy is now twice as big as it was a decade ago.

• Good policy must enable scale of action: international standards, common procurement policies by cities, infrastructure.

Videos from OU Learn