‘There are great opportunities for clean growth’

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Nicholas Stern was in India last week to deliver a series of lectures on climate change. The British economist shot into fame last year with the publication of the Stern Review of the Economics of Climate Change. The report concluded that the cost of action is cheaper than inaction. It was based on the calculation that an investment of1% of global GDP per annum in reducing the emission of greenhouse gases can help avoid the worst effects of global warming, which can cause loss of up to 20% of the global GDP. Though the calculations have come in for criticism from some economists for the discount procedure used, the report has become arguably the most important reference work on the economics of climate change. Stern also holds the first IG Patel Chair of Economics and Government at the London School of Economics and Political Science (LSE). Besides, he is director of the school’s India Observatory. Excerpts from an interview with FE’s Rajiv Tikoo:

It’s exactly one year since you came out with the climate change report. Has anything changed in this year to merit revising the methodology used or conclusions arrived at?

The evidence and analysis that have come in during the last year have strengthened still further the conclusion that the cost of action to combat climate change is much less than the cost of inaction in terms of the damage climate change will cause. The International Energy Agency and McKinsey have also published works showing the cost of action a little below our estimates. The fourth Assessment Report of the IPCC has demonstrated that the risks of uncurtailed climate change are even greater that those stated in our analysis. And the policies we have recommended—carbon pricing, support for clean technology and so on—are being increasingly implemented.

You have been meeting Indian politicians, policymakers and thought leaders to discuss the issue of climate change. What is you take on the their position?

I have come as an academic and have delivered lectures in this capacity. I have also had the opportunity to talk to ministers and civil servants on climate change policy. India is very vulnerable to climate change and will, I hope, support the Heiligendamm objective of cutting emissions by 50% by 2050. But India should also emphasise very strongly its very low emissions and the responsibilities of rich countries to lead.