Interactive Session - Sir Nicholas Stern’s Review of the
Economics of Climate Change

Monday, December 04, 2006

Sir Nicholas Stern, head of the U.K. Government Economic Service and former chief economist of the World Bank made a presentation on his report on the economics of climate change on December 4, 2006 in NewDelhi. Dr. Isher Judge Ahluwalia chaired the discussion. Participating in the debate, Professor Stern said that climate change presents a very serious global risk and demands urgent global response. According to him carbon trading is vital because that is the only way the world can work out the market price which, in turn, provides a mechanism to fund clean-up activities. “We need to spend 1 per cent of GDP each year to avoid losing 5 to 20 per cent of GDP each year to global warming”, said Stern. He cited efforts being made by state governments in the United States, in particular California and the growing awareness in the European Union and their promise to mitigate the problem by 2050. He urged for concerted international, action in this field.

Professor Joyashree Roy, Professor of Economics and Coordinator of Global Change Programme at Jadavpur University, gave the South Asian perspective. She said that it is important to integrate development policy options with climate policy options. She gave an overview of the impact of climate change and the economic costs on each household.

Dr. Jyoti Parekh of Integrated Research and Action for Development spoke about mitigation, adoption and adaptation. Professor P.R. Shukla of IIM Ahmedabad argued for better understanding on the issue taking into account the economic costs. Mr. Ajay Mathur, Director General of the Bureau of Energy Efficiency, said that almost all the discussion of climate change up to now has been about “mitigation” - in other words, how to prevent it from happening. He proposed new concepts that could help to integrate an analytical approach, domestic policy action international collective action.