The Global Deal: Climate Change and the Creation of a New Era of Progress and Prosperity
by Nicholas Stern
PublicAffairs, 246 pp., $26.95
2009 may well turn out to be the decisive year in the human relationship with our home planet. By December, when the world’s leaders plan to gather in Copenhagen to sign a new global accord on global warming, we’ll know whether or not our political systems are up to the unprecedented challenge that climate change represents. So far the signals are mixed at best—and as I’m writing those words, the news flashes up on my screen that a huge new chunk of the Antarctic ice sheet has collapsed into the sea.
In any event, Nicholas Stern’s new book provides the best scorecard we have for keeping track of this drama as it unfolds. Stern is a member of the House of Lords, and has been a top-drawer economist for many years. He was chief economist at the World Bank at the beginning of the decade, and then served as head of the UK Government Economics Service between 2003 and 2007. It was during those years that British leaders asked him to undertake a large-scale review of the economics of climate change. When he started out, he writes, “I had no special knowledge, beyond that of a concerned citizen anywhere, of the science of climate change.” He began, as any inquiry into this problem must, by looking at what science can tell us about the dangers we are courting by pouring carbon into the atmosphere:
The first thing that struck me…was the magnitude of the risks and the potentially devastating effects on the lives of people across the world. We were gambling the planet.
But because he was an economist, he was able to put those risks into financial terms—at the time the Stern Report was published in October 2006 the most widely quoted calculation was that global warming could exact an economic price larger than the Great Depression and a world war combined. In this new book he uses an example closer to the moment:
The magnitude of risks involved in climate change is vastly greater than, for instance, the disruption that would be caused to people were the Western financial system to collapse.
In one way, that seems obvious. Even a new depression would last only for a generation, while climate change promises irreversible degradation across geological time scales. The problem, of course, is that the collapse of financial systems happens quickly, and so our political systems respond by throwing piles of money into the breach; global warming happens just slowly enough that political systems have been able to ignore it. The distress signal is emitted at a frequency that scientists can hear quite clearly, but is seemingly just beyond the range of most politicians.
Stern’s great contribution was tuning the receiver of the economics profession so it could pick up the signal too. It wasn’t easy—previously, too many economists managed to minimize the …