Euro, climate crises prompt rethink of growth: Stern

Nicholas Stern, author of a landmark report on climate change, said Friday the crisis of the euro and the fight against greenhouse gases required a rethink of the concept of growth.

In an interview with AFP on the sidelines of the UN climate talks, Stern said reviving Europe’s economy in light of its financial crisis and fixing its carbon problem were interlocked questions.

The time was ripe for steering Europe towards growth that was healthy and sustainable, Stern said.

“We have to work on both (the economic and climate problems) at the same time. It’s just intellectual infirmity to be able to only think at one thing at a time, particularly when the things are linked through this growth story,” he said.

“We are not going to solve our problems in Europe without growth. We have to tackle the immediate problem of the stability of the euro, we have to do it.

“But that will only be the first step if we are sensible enough to take it. We have to get growth going in Europe. And I think low carbon investment and innovation is the best possible source of growth in Europe.”

In 2006, Stern, a British former chief economist at the World Bank, authored one of the most influential reports in the history of climate change.

Focusing especially on the economic damage inflicted by drought, floods, desertification, rising seas and storms, it said climate change could cost the world at least five percent of gross domestic product (GDP) each year.

But reducing emissions could be limited to around one percent of global GDP, it said.

Stern warned against “going back into the environmental and climate dangerous pattern that we followed in the past.”

Other voices have also appealed to leaders to seize the crisis of the euro with the chance of remodelling Europe’s economy.

Former Greek premier George Papandreou, speaking to AFP, said he welcomed efforts by the European Union’s summit in Brussels to beef up budgetary surveillance over eurozone governments.

“But monitoring, fiscal discipline alone will not solve our problem in Europe, we need a growth strategy also,” said Papandreou, attending the Durban talks to promote low-carbon investment.

“This growth strategy is not to throw money at the problem but to invest in areas that would make Europe competitive, which will create jobs, which will create growth.”