Net-zero push ‘will bring biggest peacetime changes to global economy’

Cleaner investment and innovation can drive sustainable growth, Lord Stern will say

The London School of Economics and Political Science in England. Photo: Shutterstock

The push to make the global economy green will lead to the biggest economic transformation seen in peacetime and is possible while maintaining economic growth, an influential British economist will say.

Lord Nicholas Stern, chairman of the Grantham Research Institute on Climate Change, will say that cleaner investment can drive sustainable growth.

The economist is best known for his Treasury-sponsored review into the costs of climate change 15 years ago.

“This will not be a narrow horse race between economic growth and decarbonisation," Mr Stern will say at a speech at the London School of Economics and Political Science to mark the anniversary of his review.

"The new and cleaner investment and innovation can drive sustainable, resilient and inclusive growth.

“This growth will be more resource-efficient, more productive and healthier, and will offer greater protection to our biodiversity.

“The new challenge is how to foster greater innovation and creativity, and to recognise and create the key mechanisms and dynamics of change.”

The Treasury in the past week published a report that said it would be more costly to do nothing than to invest in battling climate change.

The UK will face some declining revenues from road and fuel taxes as drivers switch to electric cars, it said, but changes can be made to plug this gap.

Next week world leaders will meet in Glasgow at Cop26 to discuss global efforts to tackle climate change.

Mr Stern will call on economists to better recognise the effects that climate change might have on those who will have to deal with the worst of them.

“Economists have grossly undervalued the lives of young people and future generations who are most at threat from the devastating impacts of climate change,” he will say.

“The science has become ever more worrying while technology has become more promising.

“Both of these should have created pressure to reduce annual global emissions substantially between 2006 and 2019. So why did they rise instead by almost 20 per cent?

“While many developed countries have slightly reduced their annual emissions over this period, many emerging market countries have increased their emissions.”