Based on recent estimates of the developing world’s extra requests as a result of climate change, rich countries should be providing annual financial support — in addition to existing foreign-aid commitments — of about US$100 billion for adaptation and US$100 billion for mitigation by the early 2020s. Some of the latter can come through carbon market. Rich countries must also demonstrate that low-carbon growth is possible by investing in new technologies, which should be shared with developing countries to boost their mitigation efforts.
We are already seeing extraordinary innovation by the private sector, which will drive the transition towards a low-carbon global economy. Investments in energy efficiency and low-carbon technologies could also pull the global economy out of its economic slowdown over the next couple of years. More importantly, in driving the transition to low-carbon growth, these technologies could create the most dynamic and innovative period in economic history, surpassing that of the introduction of railways, electricity grids, or the Internet.
There is no real alternative. High-carbon growth is doomed, crippled by high prices for fossil fuels and killed off by the hostile physical environment that climate change will create. Low-carbon growth will be more energy-secure, cleaner, quieter, safer and more bio-diverse.
We should learn from the financial crisis that if risks are ignored, the eventual consequences are inevitably worse. If we do not start to combat the flow of greenhouse-gas emissions now, the stock in the atmosphere will continue to grow, making future action more difficult and costly. Other public expenditure can be postponed, but delaying climate-change measures is a high-risk, high-cost option.
Climate change poses a profound threat to our economic future, while low-carbon growth promises decades of increased prosperity. The choice in Copenhagen will be stark, and the stakes could not be higher. We know what we must do, and we can do it.
Nicholas Stern is chair of the Grantham Research Institute on Climate Change and the Environment and professor of economics and government at the London School of Economics and Political Science. He is also a member of the UK House of Lords.
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