The UK’s chief economic adviser on climate change has reiterated his calls for the international community to step up efforts to meet exacting environmental targets, amid mounting evidence that emerging Asia is falling perilously behind.
Economist Nicholas Stern stressed in an interview with Emerging Markets yesterday that developing countries must look for more efficient ways to combat greenhouse gases, mainly carbon dioxide resulting from industrial production, which scientists say contribute to climate change.
Such efforts must include new ideas on carbon trading, a mechanism which uses economic incentives to cut carbon emissions, Stern said on the eve of the ADB’s annual gathering in Kyoto, where finance leaders will meet ten years after the landmark climate change summit held there.
“What we’re looking for from the poorer countries is a way of [carbon] trading that’s much more efficient,” he said, stressing the importance of sectoral and technological benchmarks for carbon trading schemes.
The former World Bank chief economist singled out rich countries - including the US and Australia, two non- signatories to the Kyoto pact – as critical for global action on the issue.
“First you need action from the rich countries,” he said. “Historically they are responsible for 75% [of carbon emissions],” he said. “What we need going forward is a broader commitment from rich countries.”
Stern warned that developing countries such as China – which is building coal fired power stations at the rate of one per week – would be unlikely to make unilateral changes in policy without seeing some movement from rich countries first. In 2000 China produced 15% of the world’s carbon emissions, second behind the US, which produces 21%.
Curbing the destruction of forests, which help soak up carbon dioxide from the atmosphere, is one immediate way to tackle the climate threat, Stern said. “The cheapest way of cutting emissions in the short run is dealing with deforestation.”
The economist drew attention to his recent proposal for a $15 billion a year fund to pay developing nations such as Indonesia to keep their forests. He said rich countries should set aside the sum to kickstart the fund, which could be funded over time through trading schemes.
Stern warned that the world faces economic and demographic calamity if it fails to reduce carbon emissions 30% by 2050. “There are a billion people dependent on water from the Himalayas. If those waters retreat the results would be catastrophic,” he said
His calls come at a time when Asia is struggling to grapple anew with the climate challenge posed by the breakneck growth of its biggest nations, India and China. A recent report by the Peterson Institute for International Economics points out that China’s huge investment in heavy industry – including steel, aluminium and cement – has taken a heavy toll on energy efficiency.
Stern admits that China faces a daunting challenge in meeting its targets but nevertheless remains confident that the Asian nation will fulfill its side of the bargain. “They will find it hard, but the Chinese are an inventive people. I believe they’ll do it,” he said.