Nearly £200bn needs to be spent globally in the short term to tackle climate change or the world will face a longer-term bill estimated at £3.68 trillion, claims the Stern report into the cost of climate change published today.
The report for the UK Treasury, by head of the government's economic service Sir Nicholas Stern, says that the world needs to spend 1% of its GDP, about £184bn, to slow the rate of rising temperatures and sea levels or face a much higher bill to deal with the estimated 200M refugees that would be created by drought and flood. The report urges the chancellor to introduce green taxes to raise cash to deal with climate change and recommends a new agreement to replace the Kyoto agreement on cutting greenhouse gas emissions by next year as opposed to 2011. 'Climate change has important implications for future economic growth and development in all parts of the world,' says Stern. 'Some of the most severe impacts of the changing climate will be felt by people already struggling with extreme poverty, reinforcing still further the need for international action to fight poverty and promote development. 'But it is not too late to take action to avoid the worst impacts of climate change. If governments set clear, credible and long-term incentives, then businesses and individuals will respond, and emissions can be shifted to a more sustainable pathway. 'The issue demands a global response. Effective action requires the involvement of the fast-growing developing countries. The world's richest nations, who bear much of the historical responsibility for the problem, should lead the international effort.'