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Nicholas Stern is a man who understands climate change, understands economics and understands politics so when he speaks people tend to listen. In a very interesting per-UK budget article in the Tines (21st April 2009) he says “Tomorrow’s Budget is a critical test of the consistency and credibility of the Government’s policies on climate change. The Government has accepted the overwhelming arguments for reducing our emissions of greenhouse gases by at least 80 per cent, compared with 1990, in the next 40 years. But recent decisions – such as approving Heathrow’s third runway and a relatively weak green component of the fiscal boost – undermine confidence in the UK’s ability to meet its climate change target. It is vital that the Government shows it is credible on the environment. Lord Stern, makes some strong, well argued and educated points and continues Energy efficiency should be central to the UK’s strategy for reducing emissions, by increasing and improving the insulation of lofts and walls, and the installation of new boilers and double-glazing. The Budget should recognise that homes and businesses will require substantial financial help with the costs. On electricity and heat generation, renewable sources, such as wind and solar, are likely to be more expensive than the alternatives from oil, gas and coal, at least until carbon prices increase and the prices of fossil fuels rise again. Funding for investment in renewable energy has come under great pressure during the credit crunch. The Budget should recognise that substantial public and private expenditure will be required to accelerate research, development and deployment of renewables and then adds that serious investment in public transport must be at the heart of a coherent climate policy but makes the point that investment will have to be substantial – The cost of these steps towards a low-carbon economy will not be small. The Committee on Climate Change estimated up to 1 per cent of GDP in 2020, or £15 billion a year, to fulfill UK targets for emissions reductions. We should probably be allowing for up to £20 billion per year, perhaps more, split between direct price increases and public expenditure during the next few years, which should be a period of intensive investment in making the transition to a low-carbon economy. If half of this comes from public expenditure it would represent about 0.7 per cent of current UK GDP, or 1.5 per cent of public expenditure. These significant sums are manageable. The medium-term fiscal strategy, which will inevitably be tough, must make allowance for these costs. These investments will have strong returns beyond the radical reduction in climate risks. They will also create the engine of growth of the next few decades: low-carbon technology. The potential markets for electric cars, wind and solar power generation and improved public transport, for example, could be very large. This can and must be a recovery that lays strong foundations for jobs and opportunities, and not one that sows the seeds of the next bubble or that reverts to high-carbon activities with no future. And a low-carbon economy will be very attractive: cleaner, quieter, more energy-secure and more biodiverse.
Read the article in full on the Times online (published 21st April 2009) at http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article6135687.ece[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]