Felipe Calderón and Nicholas Stern: The New Climate Economics:
How to reconcile increased action to reduce greenhouse gas emissions with strong economic growth…. As most countries have started making serious investments in renewable energy, and many are implementing carbon prices and regulations, critics complain that such policies may undermine growth…. The advent of shale gas has confused the energy debate even more. If gas is substituted for coal, it can be a useful bridge to a low-carbon future. But astonishingly, it is coal, the dirtiest fuel, that is experiencing the sharpest increase in use…. Policy vacillation in some countries has not helped. Advocates of stronger action respond that low-carbon investments can generate much stronger, cleaner growth…. These are serious economic debates, but too often they have become entangled in ideological disputes about the appropriate response to the economic crisis and the value of government intervention in markets. That is regrettable. Climate change is not a partisan issue, and climate policy is essentially market-based. It is about correcting market failures….
In order to escape this impasse, we have helped to launch the Global Commission on the Economy and Climate. The Commission’s New Climate Economy project brings together seven leading policy research institutes from six continents, overseen by a panel of former heads of government and finance ministers and prominent business leaders, and advised by a panel of leading economists from across the world. Its purpose is to provide authoritative new evidence concerning how governments and businesses can achieve stronger economic growth while simultaneously addressing climate risks….
Powerful interests will, of course, oppose any low-carbon transition, dismissing and often drowning out those who stand to benefit. That makes it even more important to clarify the choices. As science makes clear how imperative the climate question is, it is time for economists and policymakers to explain how it can be answered.