World's clean tech revolution 'needs $4 trillion a year'

British economist Lord Nicholas Stern to call for 'swift and strong' action on climate change

Countries have pledged to move away from fossil fuels towards clean energy sources such as wind power. AFP

A vast green investment push worth at least $4 trillion a year is needed to put the world on a path of sustainable growth, says one of Britain's leading thinkers on climate change.

Lord Nicholas Stern, who wrote a landmark 2006 report making the economic case for green policies, will re-enter the debate this week with a warning that action must be “swift and strong”.

In three lectures at the London School of Economics, he is expected to call on governments to reject “market fundamentalism” and use its muscle to promote clean technology.

Decisions in the coming years “will dictate whether we lock in high carbon emissions or transition to sustainable, resilient and inclusive development”, he will say.

Countries made a series of pledges to cut carbon emissions at last year's Cop28 talks in the UAE. Climate talks in 2024 are expected to focus on how to finance them.

The world's agreed aim is to limit the global temperature rise to 1.5°C above pre-1900 levels, but without putting the brakes on economic development.

“A big push on investment is central to this transformation, requiring at least $4 trillion a year globally by 2030. A new model of growth and development is in our hands but action must be swift and strong,” Lord Stern is expected to say in London.

“Market fundamentalism has given way to recognising the state's essential role in promoting sustainability and tackling inequality. Government intervention is critical to achieve sustainable growth and development in a world with many key market failures.”

Lord Stern, a former Treasury official and World Bank chief economist, wrote in his 2006 report that the benefits of going green “far outweigh the economic costs of not acting”.

The Stern Review helped shape the thinking of the then-Labour government under Tony Blair and Gordon Brown, which passed the UK's first climate change act in 2008.

However, he has since criticised the UK government's climate policies and will warn of “irreversible climate impacts” unless the world moves to a “strong path of emissions reductions” leading to net zero.

Making it cheaper to remove CO2 from the air will also be necessary, he will say, or else the world might have to turn to radical geoengineering options that come with “significant ethical and environmental risks”.

“The success of this transformation rests also on innovative economic thinking and decisive political leadership. We need an economics that focuses on the dynamics of systemic, structural and technological change,” he is expected to say.

“We have the economic understanding, technologies, and ingenuity to create this new form of sustainable, resilient, and equitable development and to avoid climate catastrophe.

“But do we collectively have the political will, skills, and cohesion to deliver? The challenge is to transform what we 'can do' into what we 'will do'.”