February 1, 2006

Govts must give green incentives, says economist

By Jeremy Lovell

OXFORD (Reuters) - The leader of a major study into whether
economic growth is compatible with green policies has called on
governments to provide clear incentives to help the

Nick Stern, head of the British government's economic
services, told a meeting of students and academics that such
initiatives would form part of a wider set of policies.

"We need clear, long and credible incentives from
government," he said. "We have to devise a framework for the
private and public sectors to work together."

With predictions of potentially catastrophic floods,
droughts and storms from climate change due to burning fossil
fuels, clear commitments and proof that economies could grow
and be clean was fundamental to harnessing international

"You need to act across a broad area," Stern said citing
actions to stop deforestation, promote carbon-free electricity,
cleaner transport, more efficient buildings and energy use.

"One of our key tasks is to find whether you can be green
and grow," Stern said. "There are a lot of arguments to suggest
that this is likely to be possible."

Making his first public speech on the study since it was
set up last July, Stern told the Oxford Institute of Economic
policy that scientific proof of climate change was overwhelming
and a study of the economics was now crucial.

The United States, the world's biggest polluter, has
rejected the Kyoto Protocol on cutting so-called greenhouse gas
emissions on the grounds that it would badly damage its

But Britain says it has cut its carbon dioxide emissions
while its economy has been growing well, and environmentalists
say low-carbon economic growth could be a reality using
renewables like wind and waves and energy efficiency.

"This is an international collective action problem. There
can be no free-riding," said Stern, who is to hand his report
to finance minister Gordon Brown and British Prime Minister
Tony Blair by November.

Scientists predict that global average temperatures will
rise by between one and six degrees Celsius this century unless
urgent action is taken now to cap and reduce carbon emissions.

Stern said recognizing the problem was only the start.
Persuading everyone -- from governments to individuals -- to
act appropriately was another question completely, and there
was no single answer.

But most of all, he urged, climate change should become a
part of everyday international diplomatic life like the battle
against narcotics, nuclear proliferation and poverty.