Climate Change Economist Stresses Urgency of Action in Harvard Lecture

By Doug Gavel
One of the world’s most prominent climate change economists isn’t backing away from his guarded optimism about the future. Lord Nicholas Stern, the I.G. Patel Professor of Economics and Government and Chairman of the Grantham Research Institute on Climate Change and Environment at the London School of Economics, told hundreds who gathered at the Geological Lecture Hall on the Harvard campus on Tuesday night (October 15) that just as economic and technological change has brought us to this challenging moment in history, so too can it seed the solutions necessary to mitigate the impacts of global warming.

Stern’s lecture, titled “Action on Climate Change: The Sustainable Growth Story of the 21^st Century,” focused more on the ways humans can solve for the current climate crisis than how they may have caused it. Most certainly, he acknowledged, the past 70 years of “extraordinary achievements” in economic progress around the world have resulted in the tremendous rise in greenhouse gas emissions (GHGs) we have witnessed in recent decades. But he said he is “enormously optimistic” about the progress made over the past few years in forging an important set of international agreements on GHG reductions, highlighted by the Paris Agreement of 2015, in which more than 150 countries agreed to undertake actions designed to limit global warming to 2 degrees Centigrade or less above pre-industrial levels.

But even that commitment, Stern remarked, might not be enough to save the planet from the most harmful effects of climate change. In order to do that, he said, the countries of the world must commit to a “net zero” goal, in which GHGs are stabilized at current levels, and possibly even reduced beyond that over time. Such an ambitious goal will require “radical change,” he said, which will “involve investment and strong innovation.”

Stern, who wrote the well-known “Stern Review on the Economics of Climate Change” for the government of the U.K. in 2006, has long argued that climate change is the greatest market failure of human history, and will require herculean efforts to address it. In his lecture, Stern pointed to remarkable technological efforts in recent years, including the introduction of electric vehicles and the rapid advancement of non-carbon-based energy sources, that he feels may hold the key to solving the climate problem. He implored government leaders to design “public policy as if time matters,” by further shifting the demand from carbon-intensive products; continuing to improve energy efficiency; and deploying a range of decarbonization technologies.

“Cities will be absolutely essential to this story,” Stern argued, while also pointing out that both “China and India are absolutely fundamental” to the effort to reduce GHGs in the coming decades.

Stern also noted that “momentum is building” among international business and financial markets toward market-based solutions that are just as important as political ones. And he stressed the importance of “managing change” across all dimensions — political, social, and economic — in order to minimize the potential negative disruptions that can accompany such transformational change.

Stern’s lecture was co-sponsored by the Harvard Project on Climate Agreements, Harvard’s Center for International Development, and the Harvard University Center for the Environment.