Economic development, climate and values: making policy

Abstract

The two defining challenges of this century are overcoming poverty and managing the risks of climate change. Over the past 10 years, we have learned much about how to tackle them together from ideas on economic development and public policy. My own work in these areas over four decades as an academic and as a policy adviser in universities and international financial institutions has focused on how the investment environment and the empowerment of people can change lives and livelihoods. The application of insights from economic development and public policy to climate change requires rigorous analysis of issues such as discounting, modelling the risks of unmanaged climate change, climate policy targets and estimates of the costs of mitigation. The latest research and results show that the case for avoiding the risks of dangerous climate change through the transition to low-carbon economic development and growth is still stronger than when the Stern Review was published. This is partly because of evidence that some of the impacts of climate change are happening more quickly than originally expected, and because of remarkable advances in technologies, such as solar power. Nevertheless, significant hurdles remain in securing the international cooperation required to avoid dangerous climate change, not least because of disagreements and misunderstandings about key issues, such as ethics and equity.

Éthique et justice climatique : entre motivations morales et amorales

“…Comme l'économiste Nicholas Stern le souligne dans une contribution récente, « le coût de l'énergie pouvant être fournie par ces dispositifs est compétitif (c'est-à-dire sans qu'il n'y ait besoin de subsides ou de taxes carbone) dans environ 80 pays ». 54 Ces opportunités de marché toujours plus nombreuses repré-sentent des motivations amorales fortes pour les agents économiques. Elles sont susceptibles de participer à la transition vers une économie décarbonée et donc de lutter contre le changement climatique.…”

Scientific and Normative Foundations for the Valuation of Alien-Species Impacts: Thirteen Core Principles

“…This loss is approximately equivalent to the gross global product today. Environmental economists argue for variable, generally lower discount rates or for applying none at all (Stern 2015a), because pure-time discounting "involves attaching lower social values to lives which start later" and "a high rate of pure-time preference is equivalent to discrimination against future generations" (Stern 2015a, p. 3). Clearly, applying high-discount rates may render any long-term impacts meaningless in relation to any short-term benefits or costs.…”

A diverse and resilient financial system for investments in the energy transition

“…Estimates for the total investment range from about 700 billion [15] to 1-2% of global GDP [11]. Despite global consensus at COP21 and ambitious targets being set, realization is lacking.…”

“…Technologically and energetically this transition is feasible and even economical [9][10][11][12]. Our modern economy has become completely intertwined and dependent on a reliable and predictable supply of heat, power and mobility.…”