The Global Deal: Climate Change's New Era

nsb It is two and a half years since the landmark Stern Report to the UK government was released. It called climate change "the greatest and widest-ranging market failure ever seen" and concluded that the benefits of strong and early action to reduce emissions far outweigh the economic costs of not acting. At 700 pages it was a daunting document. 

Now Nicholas Stern has written a book which updates his thinking and explains it in terms which non-economists will readily be able to follow. The Global Deal: Climate Change and the Creation of a New Era of Progress and Prosperity (US edition - confusingly published in the UK under a different title Blueprint for a Safer Planet.)

Stern has a long-standing involvement with efforts to overcome poverty in developing nations.  He makes it clear from the start that combating climate change is inextricably linked with poverty reduction as the two greatest challenges of the century and that we shall succeed or fail on them together - to tackle only one is to undermine the other. This theme is frequently sounded in the book, and is an indication of the humanity which he brings to his task, as also the realism.

Stern recognises we are on track to end-of-century temperatures of 4-5 degrees centigrade or higher relative to 1850, enough to rewrite the physical and human geography, with the prospect of massive and extended human conflict.  He firmly dismisses those who deny the dangers and the urgency of action.

The target level he focuses on for risk reduction is a maximum 500 parts per million CO2 equivalent. (CO2e includes the greenhouse gases other than CO2 and 500 ppm is roughly equivalent to the more commonly used 450 ppm CO2. The current level of CO2e is estimated at around 430 parts per million.) The target of 550 ppm CO2e adopted by the  Stern Report he now considers too risky.  He notes that even at 500 ppm CO2e the risks are high - a probability of over 95% of a temperature rise greater than 2 degrees, but only a 3% chance of it being above  5 degrees. So although he uses the 500 ppm CO2e target for the purposes of the book he readily acknowledges the likely need for downward revision - probably to 400 ppm CO2e to have a fifty-fifty chance of limiting the temperature rise to 2 degrees.

 A very positive section outlines the technologies already available for the task and  summarises what we must do under four headings: make more efficient use of energy;  halt deforestation; put existing or close-to-existing technologies to work quickly, including carbon capture and storage; invest strongly in new technologies which are on the medium-term horizon.

nsThe resulting low-carbon world, ushered in by a new burst of innovation, creativity and investment, will be a very attractive one in which to live. "It is a world where we can realise our ambitions for growth, development and poverty reduction across all nations, but particularly in developing countries." This is not a fancy.

Previous examples of rapid change show it can be done.  Stern's contacts in the many places he visits and speaks leave him with a strong impression of the vast entrepeneurship and creativity which can be released given the right policy frameworks. This is one of the cheering themes of the book.

The cost is reasonable.  Drawing on McKinsey analyses to discuss cost, he concludes that  2% of GDP per annum will do it, a level smaller than some which our economies already cope with in terms of exchange-rate movements or changes in trade terms. It can be thought of in terms of an extra six months for the world economy to reach the level of world income it would otherwise reach by 2050.

There is no ‘versus' between mitigation and adaptation. Stern descibes several ways in which different countries are taking adaptation measures and makes it very clear that adaptation is particularly important for developing countries, hit earliest and hardest by consequences for which they bear no responsibility.  He quotes Archbishop Tutu with approval: "I call on the leaders of the rich world to bring adaptation to climate change to the heart of the international poverty agenda - and to do it now, before it is too late."

Policies need to be effective, efficient and equitable. Different countries can have different combinations of policies relating to carbon taxes, carbon trading on the basis of quotas, and regulation. But the overall level of ambition needs to be strong and equitable, and there must be a strong role for trading schemes which allow international trade in greenhouse gas reduction - this trade both improves efficiency and provides incentives for developing countries to join in international action. He has an excellent section on the conditions which will enable trading schemes to work to the desired end.  His explanations of the necessity of trading schemes as part of the mix for emission reduction were one of the highlights of the book for me, and made very clear the contribution that economists can bring to the enterprise. 

We must have a global deal. The world needs an overall 50% cut in emissions by 2050 relative to 1990. Towards achieving this the developed countries need to agree to a 20% to 40% reduction in their emissions by 2020 and to 80% by 2050.  Within this time frame they need to demonstrate that low carbon growth is possible and affordable.   The developing countries need to commit, subject to the developed countries' performance, to take on targets by 2020 at the latest. Their emissions should peak by 2030, or 2020 for the better-off among them. They should be integrated into trading mechanisms both before and after their adoption of targets. 

In relating climate change policy to the current economic turbulence he points to two key lessons. First, that the financial crisis has been developing over 20 years and surely tells us that ignoring risk or postponing action is to store up trouble for the future. Second, to grow out of the recession we need a driver of growth which is genuinely productive and valuable.  Low-carbon growth can easily be that driver.

The book is a mine of information and helpful explanation of how proposed policy measures can work. Stern has worked closely with politicians and policy makers and obviously has familiarity with how they work and think. That doesn't mean he has been taken over by political calculations as to what is possible or not.  Quite the contrary.  He is firm on the primary responsibility of the rich nations to steer the world through to a co-operation on climate change which will both lower emissions and at the same time bring the benefits of development to the poorer nations.  He is not afraid to sound a visionary note when he considers the good that can flow to all countries if we rise adequately to the challenge of a planet in peril. I was heartened as well as informed by his book.

Other related features on Celsias:

Can Economic Growth Stop Climate Change?
An Exchange of Souls

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If you see any unhelpful comments, please let us know immediately.

Dan Pangburn (anonymous)

People are delusional to believe that the self flagellation of atmospheric carbon dioxide reduction will have any significant effect. The Climate Science community is unaware of the science that proves that added atmospheric carbon dioxide has no significant effect on average global temperature. See the pdf links at to discover what really caused the temperature run up in the 20th century and the proof that it wasn't atmospheric carbon dioxide.

Written in June 2009

Dan, the Climate Science community can hardly be described as unaware of the alternative reasons offered on your website for the climate change the globe is currently experiencing. They have all been thoroughly investigated and found lacking in substance. We would be extremely foolish to ignore the enormous weight of evidence pointing to CO2 from burning fossil fuel as the primary cause of what has now become a dangerous threat to humanity. I am always a little taken aback at the vehemence with which this is denied by the groups you represent. Even if I was inclined to denial I don't think I'd ever feel confident enough to urge people not to take precautionary measures.

Written in June 2009

Dan Pangburn (anonymous)

They appear to be unaware of the science of Control Theory. They even define feedback differently from the definition in Control Theory which existed long before it was introduced to Climate Science. This lack of understanding allows them to not recognize the significance of the paleo temperature data.
As to currently experiencing, Since 2000, atmospheric carbon dioxide has increased 18.4% of the increase from 1800 to 2000. According to the average of the five reporting agencies, the trend of average global temperatures since 1998 shows no significant increase and for the seven years ending with 2008 the trend shows a DECREASE of 1.8 C°/century. This separation of trends corroborates the lack of significant connection between atmospheric carbon dioxide increase and average global temperature.
I wonder how wide the separation will need to get before the IPCC and a lot of others are forced to realize that maybe they missed something.

Written in June 2009

Dan, a quick look at the UK Government Meteorological Office graphs will show that the notion that global temperatures are now decreasing is not borne out by the measurements. 1998 was a particularly high year in the course of the natural variability of such measures, not a peak from which it's been all downhill. The trend remains firmly upwards. There is no separation of trends between CO2 concentration and global temperature. There are lags because of the relative slowness of the climate system to respond, meaning unfortunately there is likely a good deal more warming in the pipeline which we cannot now avoid.

Written in June 2009

Yes indeed Charles, but considering the long-established fact that CO2 absorbs s infrared energy radiation from the earth (and just as well for life that it does)it would surely be a little perverse to deny causation in a correlation between rising CO2 levels and rising temperatures.

Written in June 2009

Dan Pangburn (anonymous)

The average global temperature anomalies averaged for each year for the five agencies are as follows.

1998 0.55
1999 0.23
2000 0.22
2001 0.37
2002 0.45
2003 0.44
2004 0.38
2005 0.48
2006 0.41
2007 0.42
2008 0.28

The data can be checked using the following links to the five agencies:

Written in June 2009

Dan,as I've already explained, and as the graphs at the Hadley Centre linked to in my earlier comment make clear, in 1998 the global temperature was especially warm because of a strong El Nino phase. In 2007 and 2008 a strong La Nina brought a temporary cooling. All this is part of the natural variability in climate. It in no way affects the longer term trend, which is firmly upwards. A glance at the graph is enough to confirm this. Hadley also put it into words:

"Over the last ten years, global temperatures have warmed more slowly than the long-term trend. But this does not mean that global warming has slowed down or even stopped. It is entirely consistent with our understanding of natural fluctuations of the climate within a trend of continued long-term warming."

The full statement can be seen at:

Written in June 2009

Dan Pangburn (anonymous)

John, Your 'explanation' is bogus. You have been hoodwinked by people (Climate Scientists) who are unaware of significant science (it is not in their curriculum).

Why would Hadley Center have a better handle on average global temperature than the average of the five reporting agencies of which Hadley is just one? Look at all the sites. The links are listed. Instead of just quoting others, do the math yourself.

Is it any surprise that Hadley would rationalize to continue their mantra? They are unaware of the science that, with the paleo temperature data, proves that added atmospheric carbon dioxide has no significant effect on average global temperature.

Written in June 2009

Dan, I didn't choose Hadley Centre for preference over the other sites. The picture is similar for all - that is, 1998 was an exceptionally warm year and temperatures since then haven't reached that level. But put the last ten years in the context of the last thirty and there is simply no question that they are still part of a rising trend.

There's little I can do to answer your apparently firm opinion that the world's climate scientists are unaware of significant science, other than to say that there's nothing in my reading in the field over the past few years that suggests to me that they've overlooked some elemental point such as the possibility that added atmospheric carbon dioxide has, as you claim, no significant effect on average global temperature.

Written in June 2009

Dan Pangburn (anonymous)

I look at this same data and conclude that there is no question that the 'trend' has changed character. The real reason for the temperature run-up in the 20th century is presented in the link given in my first post here.

The significance of the last decade is not so much the average global temperature, which has been flat or declining, but that during this time the atmospheric carbon dioxide level has significantly increased (over 18% of the total increase from 1800 to 2000). This is contrary to the predictions (projections?) of all climate models and corroborates the lack of connection between increased atmospheric carbon dioxide and average global temperature.

It is not surprising that your 'reading in the field' has not revealed the relevant science. The 'field' is the Climate Science Community and they appear to be unaware of the science of Control Theory.

Written in June 2009

Dan, I think I've about exhausted the responses I can make to your claims. I'm not a scientist, but I have sought to gain a lay understanding of climate science, and I can’t avoid taking seriously the warnings that come from it. I note that many national science academies and international science bodies, which include a much wider range of scientific opinion than climate science alone, have declared that the evidence for anthropogenic global warming is now compelling and that we must address it.

That doesn't mean they can't be wrong and you can't be right, of course. But we can hardly take the path of waiting to see. The stakes are too high for that.

Written in June 2009

Dan Pangburn (anonymous)

Many paychecks depend on taking that position.

I am far from alone in concluding that added atmospheric carbon dioxide has no significant effect on average global temperature. There are the 31,072 scientists and engineers that signed the Oregon Petition listed at . Dr. Roy Spencer, the U.S. Science Team leader for the Advanced Microwave Scanning Radiometer flying on NASA’s Aqua satellite has a web site at ; Warren Meyer in the form of a video gives an estimate of what the effect on future temperature is for various feedback assumptions at ; Viscount Christopher Monckton, who was science advisor to Margaret Thatcher, argues that “the IPCC’s estimates of climate sensitivity must have been very much exaggerated” at ; Joanne Nova, who believed that human produced greenhouse gases caused global warming until 2007, lectures on the subject and has published The Skeptic’s Handbook which can be viewed at . Dr. Richard S. Lindzen who is the Alfred P. Sloan Professor of Meteorology at the Massachusetts Institute of Technology says “…global warming/climate change has developed so much momentum that it has a life of its own – quite removed from science” at .

Written in June 2009

Milan (anonymous)

It takes some effort, but it is possible to argue Dan Pangburn to a standstill. In the end, his theory that sunspots are causing climate change is indefensible.


Written in September 2009

Bryan Walker (anonymous)

Milan, you put my small effort to shame. You're to be congratulated for your tenacity.

Written in September 2009

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