By Marc Jourdan, GFDD UN Programs & Outreach Manager
On October 28th 2016, GFDD participated in a webinar presentation given by Professor Lord Stern of Brentford at The Royal Society in London, United Kingdom. His presentation was entitled: ‘The Criticality of the Next 10 Years: Delivering the Global Agenda and Building Infrastructure for the 21st Century’ and held at an event to mark the 10th anniversary of the Stern Review on the Economics of Climate Change. Structuring his presentation into 5 parts, Lord Stern discussed the urgency for action on climate change as a result of intensifying desertification, sea level rise and extreme weather occurrences which could cause from 100 million to several billion people to migrate to different geographical areas with significant social, economic and environmental consequences for the planet. Stressing the importance of building sustainable infrastructure, he presented how policies reached in the next 10 years could shape the future of the planet for these 20 years and our future generations.
In his capacity as I. G. Patel Professor of Economics and Government and Chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics (LSE), Lord Stern began by offering a very concise overview of where we may be headed if we continue emitting greenhouse gases in a business as usual scenario. Pointing to current emission trends of 50 gigatons of Co2 equivalent (as compared to 41 GT Co2e in 2005) he explained that emissions were continuing to rise at an alarming rate, with a serious risk of reaching irreversible tipping points if we go beyond a warming of our planet’s temperate beyond 1.5 degrees Celsius. He warned that inaction could take us towards a 4 to 5 degree Celsius increase in global average surface temperature, which has not been seen for tens of millions of years, leading to mass migration patterns due to extreme flooding and droughts.
Despite paining a somber picture of our future on this planet, Lord Stern explained that recent international policy development offered the promise of taking the world on a positive route by delivering on a three part global agenda: reigniting global growth at the G20, delivering on the UN’s new Sustainable Development Goals and driving strong climate action by implementing the commitments of the Paris Climate Agreement. He explained that delivering sustainable infrastructure was at the heart of all three challenges. Lord Stern explained that “We have a unique opportunity now, with historically low interest rates, rapid technological change, particularly in energy production and use, digital communications, new materials, biotechnology and construction, coinciding with a period of strong investment in infrastructure to build a new path of sustainable growth”…” “But if we do not seize this opportunity quickly, the target of holding global warming to well below 2°C will soon be out of our reach, with grave consequences.”
Looking at infrastructure needs themselves, Lord Stern explained that while the world economy will double in the next 20 years, our infrastructure will more than double as a result of rapidly increasing urbanization rates, with cities playing a key role in this new paradigm (the 200 largest metropolitan economies account for 20% of global population yet generate 46% of global GDP). Lord Stern forwarned his audience that infrastructure in its early stages is risky and therefore pointed to the need for partners to alleviate concerns of investors. To allow for these investments he therefore pointed to the pivotal role that Multilateral Development Banks (MDBs) would play by increasing their infrastructure lending five-fold over the next decade from around $30-40 billion per year to over $200 billion per year in order to help meet overall infrastructure financing needs. New MDBs such as the New Development Bank (BRICS Bank) are increasingly a source and platform for financing sustainable infrastructure in emerging economies, with the first four of the BRICS Bank investments having taken place in emerging economies. He noted that the presence of MDBs bring extra confidence in policy, skills and the right mix of financing to take these infrastructure projects through the difficult first phase to then make them attractive to institutional investors. Lord Stern highlighted that the success of these initial projects in attracting such investors would be crucial, as they would have powerful multipliers and could then take us to the trillions needed for sustainable infrastructure on a global scale.
Lord Stern’s presentation underscored the point that carbon growth gives more than a fundamental reduction in climate risks, it promises a much more attractive, sustainable and inclusive path for development, which delivers on the global agenda for growth, climate responsibility and the sustainable development goals. We have the opportunities for decades of innovation, creativity and growth, the questions is whether we can bring about the political will to make the radical changes that are necessary.