Stern’s 700-page report was commissioned by the British government, and Prime Minister Tony Blair attended its formal unveiling in London today. Blair told journalists it was the most important report, looking at the future, that his cabinet had ever endorsed.
The Stern report is seen as a milestone for two reasons.
It is the first comprehensive attempt to quantify the economic impact of global warning. The message is that unless energy-conservation programs are undertaken quickly, the cost of global warming could propel us into a new Great Depression -- or worse.
Secondly, the warning comes from a respected gray-suited economist, not environmental activists -- making it all the more compelling.
A New Great Depression?
So what are Stern’s main conclusions? If nothing is done in the next couple of decades, average global temperatures could rise by 5 degrees Celsius by the end of the century.
Stern says such a rapid change in the climate has never been registered and its impact could be comparable to the last Ice Age, thousands of years ago.
"The last Ice Age was 5 degrees Centigrade below where we are today," Stern said. "Such differences are transformational. Redrawing physical geography would redraw human geography -- where we live and how we live our lives."
He says that in economic terms, this translates into annual global losses in gross domestic product (GDP) of anywhere from 5 to 20 percent.
"We have to look out over 100 and 200 years when the big effects of our actions over the next 50 years will come through," Stern said. "When we do this in a way that averages across risks, time and countries, we calculate that the damages from business as usual will be equivalent to at least 5 and up to 20 percent of consumption a year, depending on the types of risks and effects included."
A Few Degrees Spells Disaster
That is because such a rise in temperatures would cause glaciers to melt, depriving more than a billion people of fresh water. Increased flooding along the coasts and desertification inland would force hundreds of millions of people to lose their homes and livelihoods. The spread of disease would impact millions more.
Even a 2-3 degree rise in temperature would have disastrous consequences, as Blair noted.
"A rise of between 2 and 3 degrees means disappearing glaciers will significantly reduce water supply to over a billion people, rising sea levels could lead to 200 million people being displaced, declining crop yields will lead to famine and death, particularly in Africa, diseases like malaria will spread, as many as 40 percent of species could face extinction," Blair said.
Inaction No Longer An Option
The point of the Stern report is that doing nothing is not an option and that much more ambitious cuts in greenhouse gas emissions should be approved once the Kyoto Protocols expire in 2012.
Under the 1997 Kyoto accord, 35 industrialized countries committed to reducing emissions by an average 5 percent below 1990 levels by 2012.
The report seeks to disprove the argument put forward by those opposed to Kyoto, such as U.S. President George W. Bush, that cutting emissions imposes an unacceptable economic burden.
According to Stern, spending the equivalent of just 1 percent of global GDP over the next few years on “green” projects could prevent the much worse economic cataclysm of global warming.
China, India On The Rise
What is also clear is that while Kyoto has focused on the world’s advanced industrialized countries, future international accords will have to take countries like India and China into account.
The Stern report calculates that even if Britain were to shut down all its power stations tomorrow, the reduction in global emissions would be wiped out in just a year by increased emissions from China.
(The Stern report can be downloaded at: www.sternreview.org.uk)