Lord Stern gave an interesting, informal presentation to the Hawthorn Club on 15 March 2012, in which he gave a background to the Stern Review, described recent COP meetings, as he has attended them since 2003 and gave an insight into the policies he thinks are required to limit climate change.
The Stern review into the economics of climate change mitigation was commissioned at the G8 2005 meeting in Gleneagles. At the time, of the leaders present, only Blair and Chirac took climate change seriously, said Lord Stern. He reflected on how times have changed since 2005, as now climate change is a central issue for politics and business. Also, since 2005 the science of climate change and emissions of greenhouse gases have become more worrying, and the costs of inaction are therefore larger. There has been a remarkable change on the technology side. For example the cost of solar power has fallen dramatically. Technology is progressing at a fast pace. For example, the US Navy has a target of using 50% non-hydrocarbon energy by 2020 and it is on course to meet this goal.
Lord Stern’s impressions of recent COP meetings are that COP13 in 2007 in Bali was optimistic, whereas Copenhagen was ‘cold, chaotic and quarrelsome’. However, in the closing minutes it did produce an Accord, where it was agreed that each country would submit a pledge for where it would be by 2020, and the majority of countries have done this. The Cancun COP meeting had a better atmosphere, and the Accord was taken to a UNFCCC agreement. At Durban in 2011 it was recognised that the pledges made were too high to maintain a 50% chance of limiting global temperature increase to 2°C. If all the countries take the action that they have pledged, the world is on track for a temperature increase of 3-4°C, according to Lord Stern. At Durban there was also recognition that a unified system is needed , rather than the current division between Annex 1 and non-Annex 1 countries. The next 4-5 years will be very important for the UNFCCC.
Policies and frameworks
Following a high carbon investment path is risky and getting riskier, whereas a low carbon route is becoming less risky. It would be positive if the EU moved to a 30% GHG emission reduction target from 1990 by 2020, up from the current 20% target, and Lord Stern does not think that this hope is a lost cause. An EU 30% reduction target would also boost the EU ETS. In addition the number of permits available in the EU ETS should be reduced, to increase their value. Further, an EU wide carbon floor price is needed, as is in place in Australia and California. China is focussed on a carbon price and carbon trading, and the EU should engage with China on this, while developing an international mechanism.
An EU wide approach is needed to energy policy and security. For example, a better transnational grid would enable the more effective deployment of intermittent renewables. Solar power has a huge potential for 2030, but an improved gird structure is essential for this.
Lord Stern believes that we need all technologies, and that governments need to allow ideas through. Supportive government policies and money are needed to encourage CCS. In 40 y time Lord Stern sees a large role for nuclear and solar, but is not so clear on the size of the role for CCS. However, his view on technologies is ‘the more, the merrier’.