This is the week that climate change came of age. Over the last two years there has been a transformation in the discussion of the environment and climate change. The publication of the Stern review has taken that to a different level. How unexpected to see the leaders of all three main political parties vying for the airwaves to claim their stake in promoting green taxation. How unexpected the media consensus about the seriousness of the problem. This has been the political equivalent of the melting of the polar icecap; a new world we need to ensure politicians and the public adapt to.
The real test for Stern, though, will be about how policy-makers respond. The irrefutable moral and – now – economic case for change has been stated. The next step is political leadership. The early signs are positive. On Stern’s three policy recommendations – carbon pricing, technology development and removing the barriers to efficiency – the UK is already engaged in some of the most innovative thinking.
In the immediate future, the government has announced that legislation will be included in the Queen’s speech, albeit there is a debate about what level of carbon reduction targets will be included. The successful drive behind the ‘Big Ask’ campaign and SERA’s own resolution, which was adopted by Labour party conference this year, demonstrates the influence of the environmental lobby in defining the climate change debate. We should be seizing Stern as the economic text book on the impending damage from uncontrolled climate change, and as part of the solution.
If we actively engage with the report then it provides a route map for the kind of initiatives that progressive governments should be advancing globally. Labour was elected in 1997 after convincing the British electorate that it could be trusted with sound economic policy and social justice, and in the process confounding the Tories’ strongest attack. The Stern report deepens our understanding of economic, social and environmental justice. Its power is derived by linking the global economic impact of climate change to economic growth.
It is this last point, both moral and financial, that has most opportunity to galvanise action. It is not surprising that the poorest will suffer greatest from the impacts of climate change. The extent to which climate change will affect global GDP and economic growth is different. We need businesses to engage with climate change, and to actively participate in developing green technologies.
In Europe, we already have an Emissions Trading Scheme, with all its early imperfections. By establishing a cap on emissions and putting a price on carbon, it rewards good practice and penalises the worst. The principle is sound, although it needs both developing and widening to include other sectors, such as the aviation industry. These are difficult but necessary political decisions. One of the greatest legacies this Labour government could bequeath to future generations is the establishment of a robust and extensive trading scheme.
As Stern highlights, carbon pricing is not limited to existing economic blocks. Imagine the influence of a trading scheme that links together Europe and those individual US states, like California and those in the north east, which are already developing their own initiatives. Imagine, as well, the pressure that would put on sceptical US politicians. Eventually, it creates the possibility of carbon trading between developed and developing countries, with those in need gaining most.
Despite the scale of the challenge there are genuine reasons to feel optimistic about our response to climate change. We have, as Nicholas Stern said this week, ‘a window of opportunity’. It is now in our hands to seize it.