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

The push to make the global economy green will need the biggest economic transformation ever seen in peacetime, but is possible while maintaining economic growth, an influential economist is set to say.

Nicholas Stern, chair of the Grantham Research Institute on Climate Change, will say decarbonising and growing the economy do not need to race each other and 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.

At a speech to mark the anniversary of his review at the London School of Economics and Political Science, Lord Stern will say: “The drive for net zero emissions will result in the biggest and most fundamental transformation in the global economy that has ever occurred during peacetime.

“This will not be a narrow horse race between economic growth and decarbonisation. 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.”

Lord Stern’s comments come less than a week after the Treasury published a report which said it would be more costly to do nothing than to invest in combating climate change.

The UK will face some declining tax bills from road and fuel taxes as drivers switch to electric cars, it added. However, changes can be made to plug this gap, it added.

“The costs of global inaction significantly outweigh the costs of action” to tackle climate change, it said.

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

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

“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.

Looking back on the publication of his report 15 years ago, Lord Stern 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%?”

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