Better growth, Better climate – but not better enough

With Ban Ki-Moon’s climate summit kicking off tomorrow, we’ve had a spate of climate related reports over the last week or so. I might do a round-up at some point, but the one I’ve been browsing on the train is the New Climate Economy report, from the Global Commission on the Economy and Climate.

I’m reading it because it’s the one that our politicians will prioritise. Why? Because it’s written by economists.

The Commission is made up of former heads of state and finance ministers, alongside various other luminaries: the CEO of Bloomberg, the chairman of Bank of America, the head of the International Energy Agency, the mayor of Houston. They consulted broadly among business and community groups, and there’s an advisory panel of illustrious economists, chaired by Lord Stern.

No, there’s no advisory panel of climate scientists, why do you ask?

The commission “was set up to examine whether it is possible to achieve lasting economic growth while also tackling the risks of climate change.” After much deliberation, the panel concluded that we can “build lasting economic growth at the same time as reducing the immense risks of climate change… We can achieve both better growth and a better climate.”

Now, it’s tempting to file the news that finance ministers think growth and climate change are compatible right alongside the press release on the Pope being a catholic. But what if they’re onto something this time? Have they managed to square the circle?

The Commission has ten action points. It includes calling for an international climate agreement, ending subsidies on fossil fuels, carbon pricing, phasing out coal power and halting deforestation. Most of this we have heard before, although there are nuances that are helpful. There is a focus on cities, which are often able to lead on climate change through public transport and compact development. Since the world is increasingly urban, that’s a sensible idea.

There’s also a good balance between government and business action in the report, with climate change risk incorporated into the decision making processes of both. There’s a pitch for the circular economy, and recognition that climate action could leave stranded assets in the extractive industries. There’s even a heartening recognition that not all growth is good, and that we need to make sure we’re using a broad set of metrics beyond raw GDP. “The quality of growth matters as much as its rate”.

However, the criteria of the study dictates that only measures that enhance economic growth should be considered. They’re very explicit about this. “The question the project has sought to explore is not ‘how can greenhouse gas emissions be reduced?’ – others have done this comprehensively – but ‘how can economic decision-makers achieve their principal goals while also reducing their impact on the climate?’” Economic growth is one of those principal goals, so all ten points represent things that would be good for growth as well as the climate.

But do the ten points add up to substantial enough carbon cuts? That’s the vital question. Of course there are things we can do that would boost GDP and reduce carbon at the same time, and that’s great. But our efforts can’t be limited to those things, not if they don’t deliver sufficient carbon cuts to avert dangerous climate destabilisation. So how do the Commission recommendations stack up?

Despite repeatedly claiming that their findings reconcile economic growth and climate action, the report admits that their ten action points “would not be sufficient to achieve the full range of emissions reductions likely to be needed by 2030 to prevent dangerous climate change.” If the world was to miraculously agree and deliver on all ten of the Commission’s action points, we’d still be only halfway to a two-thirds chance of avoiding it.

So in other words, the Commission hasn’t been able to prove that we can have economic growth and avoid dangerous climate change. All they’ve said is that you can have economic growth and ‘action on climate change’ – as demonstrated by the carefully worded press release and executive summary.

They’re not actually claiming that their recommendation can stop climate change, just that the climate risk can be improved. On the bigger question of whether you can have economic growth and actually prevent climate change, well, that’s being quietly skirted here.

Unfortunately, politicians and decision makers are unlikely to read all the way down to the bit where they admit that their action plan won’t prevent climate change. They’ll be too busy writing over-excited articles like this one from Ed Davey, or this one from Chris Huhne. “It’s clear that prosperity and climate action can go hand in hand” says Davey, Britain’s Energy and Climate Change minister. He explains the Commission’s suggestions on efficiency and proudly says “we are putting this into action.”

Don’t expect the media to notice either. “The world can still act in time to stave off the worst effects of climate change, and enjoy the fruits of continued economic growth” the Guardian reported. “This just in: Saving the planet would be cheap; it might even be free” celebrated Paul Krugman in the New York Times. But then that’s a better  news angle than ‘Economists unveil action plan to get halfway to stopping climate change’.

The New Climate Economy report is as ambitious as you’re going to get from mainstream political and business interests. It says what they want to hear, and will therefore be widely cited. But if this is far as we’re prepared to go, if the assumption of economic growth remains unquestioned, then we are not going to to stop dangerous climate change.