Some may be dismayed at his prediction that the economy will remain depressed for two, three or more years. But seen another way, this gives us longer to make the profound changes that are needed before economic recovery takes off once again – and to make that recovery genuinely sustainable, from both an environmental and an economic perspective.
One thing we do not need is an early recovery which raises demand for fossil energy, creating new spikes in the price of oil, gas and coal, so sowing the seeds of its own destruction. For the high price of fossil fuels was surely one of the triggers that created this global depression in the first place. That is why we need to to bring about huge investments in renewable energy technologies and the associated infrastructure – such as a European supergrid that even stretches across the Mediterranean to include the huge solar power resources of North Africa.
Not to forget energy efficiency and conservation: making our homes, offices, industries and transport systems more frugal in their energy demands. In this way when the recovery comes, we will have the clean, green energy to supply it, and lower demand to avoid pushing up fossil fuel prices. And in the meanwhile we will have created millions of jobs in the new green industries, civil engineering and construction, putting skilled but idle hands to productive use.
What we lack at present is a mechanism to bring this about, and this will be something for the G20 to consider carefully when they meet in London in April. First the G20 must recognise the overwhelming scientific truth emerging from this conference – that continuing with business as usual is likely to create a planet 5C warmer than today, with stark consequences for all of us – or at least those of us who survive. As John Schellnhuber, climate adviser to Angela Merkel and Manuel Barroso warned, a 5C world may have a human carrying capacity of just 1 billion people. That would represent only about a tenth of most future population projections.
But what to do about it? The obvious answer is to create a global "carbon fund" with sufficient resources to drive the necessary changes forward. And the only clear way to fund it is from the sale of emissions permits, whether under a carbon tax as advocated by William Nordhaus, or under a cap, auction, trade system as preferred by Stern. At a price of just $30 per tonne of CO2, the world could raise about $1tn per year to invest into solving the problems of climate change – paying countries to conserve their forests and peatlands, financing a renewable energy revolution backed by serious efficiency and conservation measures, and funding necessary adaptation in countries facing the multiple climate-related threats of drought, flood, storm and disease. All with a particular emphasis on meeting the needs of developing nations.
On top of the $1tn that would be raised by the sale of carbon permits, the carbon price would put a secure, long term incentive in place for private investment in low carbon technology and innovation, and the funds available in this way could easily equal those raised directly – thus as much as $2tn could be available. Stern's estimate is that we need to mobilise a sustained investment of 1-2% of world product, and our $2tn is more like 3% of world product – in other words, this would be a more than sufficient sum to kick start our clean, green world economic revolution.
from Green shoots before the recovery
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Less economic yearly growth would result in less expenditure of oil and gas reserves in the world-wide effort to keep global temperature rise less than 2° C - increasingly viewed by scientists as not possible. Crossing the 2° C threshold will effect the complete melting of polar ice and Greenland - causing ocean-level rise and the dislocation of at least 10% of the world population.
from Sea Level Rise Best Case Scenario: 50cm Rise, 10% of World Population Hit and Projecting global climate change
"...graphs climbing across these pages (see graph in detail, or explore the data) are a stark reminder of the crisis facing our planet. Consumption of resources is rising rapidly, biodiversity is plummeting and just about every measure shows humans affecting Earth on a vast scale. Most of us accept the need for a more sustainable way to live, by reducing carbon emissions, developing renewable technology and increasing energy efficiency.
But are these efforts to save the planet doomed? A growing band of experts are looking at figures like these and arguing that personal carbon virtue and collective environmentalism are futile as long as our economic system is built on the assumption of growth. The science tells us that if we are serious about saving Earth, we must reshape our economy.
This, of course, is economic heresy. Growth to most economists is as essential as the air we breathe: it is, they claim, the only force capable of lifting the poor out of poverty, feeding the world's growing population, meeting the costs of rising public spending and stimulating technological development - not to mention funding increasingly expensive lifestyles. They see no limits to that growth, ever.
In recent weeks it has become clear just how terrified governments are of anything that threatens growth, as they pour billions of public money into a failing financial system. Amid the confusion, any challenge to the growth dogma needs to be looked at very carefully. This one is built on a long-standing question: how do we square Earth's finite resources with the fact that as the economy grows, the amount of natural resources needed to sustain that activity must grow too? It has taken all of human history for the economy to reach its current size. On current form it will take just two decades to double."
It is a vision John Stuart Mill, one of the founders of classical economics, would have approved of. In his Principles of Political Economy, published in 1848, he predicted that once the work of economic growth was done, a "stationary" economy would emerge in which we could focus on human improvement: "There would be as much scope as ever for all kinds of mental culture, and moral and social progress... for improving the art of living and much more likelihood of it being improved, when minds cease to be engrossed by the art of getting on."
Today's economists dismiss such ideas as naive and Utopian, but with financial markets crashing, food prices spiralling, the world warming and peak oil approaching (or passed), they are becoming harder than ever to ignore."
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