Stern Review

Very strong reductions in carbon emissions are required to reduce the risks of climate change. They are likely to provide benefits well in excess of the costs. Indeed the costs of not acting strongly are likely to be very high.

Action is urgent since stocks of GHGs are rapidly approaching dangerous levels, there will be heavy investment in energy infrastructure that could lock in future emissions, and it will take time to develop technologies that deliver zero emissions at low cost.

Without a clear perspective on the long-term goals for stabilisation of greenhouse gas concentrations in the atmosphere, it is unlikely that action will be sufficient to meet the objective.

Action must include mitigation, innovation and adaptation, and there are many opportunities to start now, including where there are immediate benefits and where large-scale pilot programmes will generate valuable experience.

Countries should agree a broad set of mutual responsibilities to contribute to the overall goal of reducing the risks of climate change. These responsibilities should take account of costs and the ability to bear them, as well as starting points, prospects for growth and past histories.

The challenge now is to broaden and deepen participation across all the relevant dimensions of action – including co-operation to create carbon prices and markets, to accelerate innovation and deployment of low-carbon technologies, to reverse emissions from land-use change and to help poor countries adapt to the worst impacts of climate change.

Climate change is the greatest market failure the world has ever seen, and it interacts with other market imperfections. Three elements of policy are required for an effective global response. The first is the pricing of carbon, implemented through tax, trading or regulation. The second is policy to support innovation and the deployment of low-carbon technologies. And the third is action to remove barriers to energy efficiency, and to inform, educate and persuade individuals about what they can do to respond to climate change.

Emissions trading: Expanding and linking the growing number of emissions trading schemes around the world is a powerful way to promote cost-effective reductions in emissions and to bring forward action in developing countries: strong targets in rich countries could drive flows amounting to tens of billions of dollars each year to support the transition to low-carbon development paths.

Technology cooperation: Informal co-ordination as well as formal agreements can boost the effectiveness of investments in innovation around the world. Globally, support for energy R&D should at least double, and support for the deployment of new low-carbon technologies should increase up to five-fold. International co-operation on product standards is a powerful way to boost energy efficiency.

Action to reduce deforestation: The loss of natural forests around the world contributes more to global emissions each year than the transport sector. Curbing deforestation is a highly cost-effective way to reduce emissions; large-scale international pilot programmes to explore the best ways to do this could get underway very quickly.

Adaptation: The poorest countries are most vulnerable to climate change. It is essential that climate change be fully integrated into development policy, and that rich countries honour their pledges to increase support through overseas development assistance. International funding should also support improved regional information on climate change impacts, and research into new crop varieties that will be more resilient to drought and flood.