Speaking to the Guardian ahead of a speech to launch a new climate change economics centre at the London School of Economics, the author of the government's influential report on climate change, said there were "two kinds of danger" because of the current fears of recession.
"One [is] people can only concentrate on a limited number of things at the same time, and the second is people will be sensitive to cost increases, and those will have to be managed carefully," he said.
"There's a danger: it needs leadership." But, he said, the current problems could help boost investment in tackling climate change because they have highlighted the dangers of not tackling risks early enough, and could create much more international cooperation.
There were also more incentives to invest in energy efficiency during a recession and when oil prices were high. Spending on renewable and other low-carbon industries could help stimulate the economy, said Stern.
"We're going to have to grow out of this ... and this is an area which looks as though it could well grow strongly and with the right support could be one of the major engines of growth," he said.
Stern's comments will be echoed today by the government's Technology Strategy Board, which warns businesses it would be a "terrible mistake" to cut investment in new technology during a downturn. "We will come out of this downturn and when we do, it will be the businesses which held their nerve and continued to invest that will come out of the downturn first [and] emerge stronger,"
Iain Gray, the board's chief executive, will say. Despite the big changes, Stern predicted the information technology revolution would turn out to have been "more revolutionary" in the long term.
"We'll still move around, we'll heat our homes - homes will be more efficient and close to zero- carbon electricity. But at the same time it will be cleaner, quieter, more biodiverse. It will actually be much nicer," he said. The price of Brent crude oil fell to $84 a barrel - the lowest for 12 months - yesterday amid fears the credit crisis would trigger a drop in demand.
The slump should mean relief for car owners with a fall in pump prices closer to 100p a litre although motoring organisations have long complained that oil companies are slow to cut pump prices when crude values fall. And members of the Organisation for Petroleum Exporting Countries (Opec) were immediately talking about how they could reduce supply to force prices up again.
Posted on 9th October 2008
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