from the ground Up

Ever since I’ve started covering climate change, there isn’t one person’s name that I come across more frequently than Professor Lord Nicholas Stern, than probably former US vice president Al Gore.

Gore, I’ve had the chance to meet last August and save asking questions from the floor, I didn’t have very much interaction with him.

Yesterday, however, I had the privilege of meeting Lord Stern, most famously known as the author of the Stern Review - a 700-page ground-breaking report on the financial impact of climate change on the global economy, and actually interviewing him in depth. It was one of the best doorstops I’d done; he was articulate, his responses were stimulating, and he was pretty charming in person, and his talk was accompanied by that famed British sense of sardonic humour.

Of course my story in the paper the next day didn’t do justice to the interview I had with him, so I’m writing some of the highlights here.

But before I do that, I have to say there is one thing he said yesterday to the 600-strong audience at the fourth LSE Asia Forum held at Shangri-La Hotel, that really resonated with me.

And that is, ever since I’ve started covering this beat and became an environmentalist-convert myself (by this I mean I believe in climate change and try to do my part to help, but I can’t call myself a true environmentalist), I’ve had countless debates about the whole climate change phenomenon gripping the world. Obviously most skeptics have been convinced and are on board, but there is always the belligerent minority that sometimes never fail to amaze me in either 1. their stupidity ( for example, someone who refutes climate change) and 2. their indifference (someone who might believe but doesn’t give a shit).

I’ve always thought this about the whole climate change shenanigans: what is the harm in believing?

What harm could possibly come to us by eating a little less, using less energy, putting a solar roof up, driving efficient cars… and generally, transiting to a low-carbon economy? I always tell my friends, in the most unlikely scenario, if all the IPCC scientists were wrong and climate change doesn’t wreak havoc on the earth in 50 years, then at least we would have a more resilient earth or a more sustainable economy to shoulder the demands of humanity in the next few centuries.

If we don’t act now, however, no matter how much “adaptation” the world scrambles to achieve in 50 years, if it all goes tits up, then there won’t be any recourse for us. One can only imagine the consequences (doomsday novel in the making) and I’m not just talking about physically feeling rising temperatures, but the complete disintegration of our economies, due to massive kinks in the global food and water supply chain, our ecosystems, competition between countries and inevitable conflict. Like we don’t have enough of that.

Maybe we won’t see this is our lifetime, maybe we will. But ultimately, investing in renewable energy or in market mechanisms that make a low-carbon, efficient, economy possible will today only cost 1% of world GDP, in comparison to the infinite billions the world might lose, and the people might suffer, in the future.

To me, it’s a no-brainer. And I quote Lord Stern, “what will you have to lose by taking the view to act?”

The world has nothing to lose by acting now, and all to gain even if climate change turns out, very unlikely, to be a farce. Lord Stern said, “it’s a modest insurance premium to pay for such a huge risk” and I can’t put it across any more eloquently.

So, briefly, these are some excerpts from the interview:

Q: Can you elaborate on the six-point global deal that you’ve recommended for a post-Kyoto agreement?

Stern: Climate change has to solved internationally, not by any one country, so we have to get a global deal together, where everybody takes action. It has be effective, cut greenhouse gases (GHG) by 50% by 2050, it has to be as low cost as possible, it has to be fair and equitable. And climate change is a very inequitable phenomenon, developed countries caused build up of GHG up till now, and it’s the poor countries that will be hit the hardest.
On the other hand, the poor countries, under business-as-usual scenarios, will be generating the most GHG in the future. If we want to cut, everybody has to be involved. If we don’t, the world will enter very risky territory with temperature increases which will transform the planet, lead to big movements in population, and conflict eventually.

Q: How have businesses around the world responded to the 2006 Stern Review?

Stern: I have been encouraged by many businesses around the world, just in my own country, the Confederation of British Industry produced a very good plan which they publishd last October. And other businesses in other countries are also doing similar things. Many are constructive, but we need goverments and businesses to move forward much faster than we are now.

Q: What role can Singapore play, if any. Will it be meaningful?

Stern: Singapore is a rich country, but paradoxically it’s classified as amongst developing countries in many of the international meetings, it takes a little while for these things to be reclassified. But this gives Singapore an advantage to be part of the rich world essentially, as we all know it, and that sitting somewhere between the two, organisationally, could mean Singapore could be a bridge between the rich and poor countries

Technology, for example, and a lot of this [climate change] will be about technology development. Singapore has neighbours that are big emitters, I’m thinking particularly of Indonesia and its peat burning, and i think Singapore could organise groups that could assist Indonesia in combating deforestation.

The third advantage, after the first two - its special position and technology - is its relationship with neighbours. Lastly, it is the power of example. Singapore may be small in terms of number of people, but the example it gives could be very big. What everybody admires about Singapore is the ability to get things done, so if Singapore commits itself to a low carbon economy, I think we’d all be convinced that before long, there will BE a low-carbon economy in Singapore.

Solar energy, for example, is very promising. I suspect Singapore could take a lead in that, and also, it could buy reductions elsewhere, for example, to combat deforestation in Indonesia.

Ultimately, it’s not for me to indicate the way in which Singapore could set an example, but the ingenuity of Singaporeans will find that out.

Finally let me add that the world is made up of a lot of small nations, we all have to be in this. Whilst we do have to get the big countries, all countries will have to be invovled, including Singapore.

Q: What about this issue on transfer emissions? Our politicians have made the case that being a manufacturing/processing/transport-heavy country, we indirectly take on the burden of developed countries and they argue that it’s unfair?

Stern: We have to lower our emissions everywhere, regardless of which country. Some emissions come from production, some come from consumption. And if we buy a car, and buy petrol, even though that car and petrol may be produced somewhere else, we’re still responsible for emissions. So whether we’re producers or consumers, I think you shouldn’t emphasise too strongly, one way or another, we’re all responsible and we all have to cut back.

Q: How about reconciling economic growth and costs involved in climate change?

Stern: What I want to be very clear on, a fundamental point, is this is about low carbon growth, not no growth. If we try to grow as we’ve been growing as a world, we will undermine growth, we will actually stop growth. So low carbon growth IS the growth option.

What we have to do is to find ways of getting to it at reasonable cost. The estimate of the cost is about 1-1.5% of GDP per annum , that’s like a one-off increase in costs, that’s not going to undermine growth, we see that kind of thing in long term movements in exchange rates. We see quite big inceases in petrol, gasoline, oil prices over the years, they’re not necessarily what we would like, but we can deal with them without stopping growth. The wage rates in rich countries is 10-15 times the wage rates in poor countries, 1.5% is not going to change the competitive position radically.

So this isn’t about a trade off between growth and climate responsibility, what i’m saying is unless what we do both, we will get neither. And unless we find ways of doing it, we have to collaborate along the way. But the competitiveness story, that you have to stop growth to do this, is simply wrong.

Q: How much is politics a hindrance to achieving a global deal?

Stern: Well, there will always be short-term interests, trying to block change. For example, when motor cars came in, it undermined those who were involved in horses and carriages and carts. I don’t want to pretend that change takes place without dislocation or disruption, and of course there will be vested interest in those who are in businesses that are likely to be dislocated and be affected. But we can’t allow the short term narrow interests of the few to undermine the larger interests of the many, and the whole world.

So we recognise that there are political difficulties, but they have to be overcome, we can’t stop the change taking place. In countries which do have bigger adjustments costs, it is important that the rest of the world help them in dealing with it.

Q: What do you think is the biggest challenge in our achieving a post-Kyoto agreement by Copenhagen end of next year?

Stern: I think it will be the quarrelling among countries as to who does what. But what I’d like to see is the developing world taking the lead in designing the way these processes could work. If they do, I think the whole process will move much more quickly. Currently the rich countries come with propositions, they get battered back, and it’s the developing countries which have the majority. They’re the ones that will be hit the fastest and hardest. The future lies in their hands and I would like to see them taking the lead in shaping this agreement