:00:09. > :00:14.Welcome to HARDtalk. I Zeinab Badawi. World leaders gathered at a
:00:15. > :00:20.UN climate summit in New York and pledged again to tackle global
:00:21. > :00:24.warming. There were marches on the streets in New York and elsewhere,
:00:25. > :00:32.as activists demanded tougher action on climate change. Yet again this
:00:33. > :00:35.year, global greenhouse gas emissions have risen, partly because
:00:36. > :00:38.many politicians and citizens don't want more expensive renewable energy
:00:39. > :00:43.if it affects economic growth and prosperity. My guest today is the
:00:44. > :00:46.British climate economist, Lord Nicholas Stern, who has just
:00:47. > :00:50.co`chaired a new report on the climate and economy. He says it is
:00:51. > :00:54.not an either/or situation. But what evidence is there that we can have
:00:55. > :01:22.it both ways, and are governments listening?
:01:23. > :01:29.Lord Stern, welcome to HARDtalk. Thank you for having me. How do you
:01:30. > :01:36.convince people that tackling climate change is compatible with
:01:37. > :01:39.prosperity? Evidence of things that work, showing that the costs of
:01:40. > :01:45.renewables will come crashing down, both wind and solar. And linking it,
:01:46. > :01:49.and this was a key aspect of our reports, linking it to the big
:01:50. > :01:52.processes of change going on around the world, particularly the movement
:01:53. > :01:59.into cities, particularly increasing demand for energy, particularly the
:02:00. > :02:03.pressures on forest, and of course, the overall shift in the balance of
:02:04. > :02:05.economic activity in the world away from the rich countries towards
:02:06. > :02:12.emerging markets and developing countries. Even the UN Special Envoy
:02:13. > :02:15.on climate change Mary Robinson the former president of Ireland says
:02:16. > :02:20.that your report is very welcome, the report that he co`chaired with
:02:21. > :02:23.the former Mexican resident, the new climate economy report. She says it
:02:24. > :02:26.is great to tell nations that climate action is possible but your
:02:27. > :02:33.message is overhyped and two positive, she says. Well, I hadn't
:02:34. > :02:37.seen that, and I hadn't seen that report. That is what she actually
:02:38. > :02:40.told me. And I think that is a misinterpretation. And I look
:02:41. > :02:46.forward to my next discussion with Mary. We have looked at what is
:02:47. > :02:51.possible. And we have been quite cautious about the numbers. So we
:02:52. > :02:55.haven't assumed, made wild assumptions about technical change.
:02:56. > :02:59.But what we have done is to state if these policies are good, if we
:03:00. > :03:04.invest in much more compact cities, if we put the real technical
:03:05. > :03:10.progress to work in renewables and energy efficiency, then we can do
:03:11. > :03:14.very well. So we are achieving good policies, good programmes, good
:03:15. > :03:18.investments, and showing what they can do. So the assumption is that
:03:19. > :03:23.those will happen, that is not an assumption that we make. But we sure
:03:24. > :03:27.what we can do, and I think the numbers that we put to what we can
:03:28. > :03:31.do actually quite cautious. So your report, one of its key outcomes was
:03:32. > :03:33.as global populations become increasingly urbanised you are going
:03:34. > :03:38.to be the right kind of infrastructure to shape development
:03:39. > :03:41.land use and energy systems. But the fact of the matter is, how can you
:03:42. > :03:46.use renewable energy to achieve those goals of better cities for
:03:47. > :03:52.people to live in, when as Professor Richard Cole, Professor of economics
:03:53. > :03:55.at Sussex University, has been involved in several reports on
:03:56. > :04:01.climate change for the UN, says it is implausible that growth and
:04:02. > :04:05.climate objectives are mutually reinforcing. Renewable energy is
:04:06. > :04:09.more expensive than fossil fuels. So which country is going to say we are
:04:10. > :04:15.going to go for more expensive renewable energy. Well, Professor
:04:16. > :04:18.Tolle is entitled to his opinion, but the kinds of models he builds
:04:19. > :04:23.are pretty mechanical in assuming essentially the results which he is
:04:24. > :04:28.arguing for. What we have seen in the last five or six years is a
:04:29. > :04:34.dramatic fall, indeed, over a longer period, dramatic falls in the costs
:04:35. > :04:37.of renewables. They are now competitive with fossil fuels in
:04:38. > :04:48.many countries of the world. Al Gore recently has done of 79 `` a count
:04:49. > :04:51.of 79. What a lot of economists have missed, or haven't built into their
:04:52. > :04:56.models to put it more fairly, is that dramatic cost reduction in
:04:57. > :04:58.renewables, and that is going to continue, but there is another
:04:59. > :05:03.factor here as well. Remember our report is called better growth,
:05:04. > :05:08.better climate. And that is very important. It is not just the rate
:05:09. > :05:13.of growth, which could be faster all could be slower. It is better. And
:05:14. > :05:15.the fundamental sense of better is a pollution. Because another thing
:05:16. > :05:22.that has become much more clear in the past few years with work from
:05:23. > :05:27.the WHO, OECD, IMF and so on Tom is the immense costs of air pollution.
:05:28. > :05:29.Much bigger now than had been previously thought. So if you put
:05:30. > :05:34.those two things together, reduce cost of renewables and the cost of
:05:35. > :05:39.fossil fuels in terms of human health, then you can certainly have
:05:40. > :05:42.better growth and better climate. But are you seeing now the
:05:43. > :05:48.investment going into those renewable energy project? Because
:05:49. > :05:53.there are those in climate debate that say yes, there is the money
:05:54. > :05:57.there after all. 800 is as leaders and financiers turned up at the
:05:58. > :06:00.recent climate Summit in New York and there is the money there. But
:06:01. > :06:04.they need relatively risk`free investment. So if you take one
:06:05. > :06:10.example for instance, the Inga hydroelectric dam in that Democratic
:06:11. > :06:13.Republic of Congo cost an estimated $70 billion to build and would
:06:14. > :06:17.provide nice clean energy for South Africa but they only have $35
:06:18. > :06:20.billion of that money because people are thinking who is going to invest
:06:21. > :06:23.in the DIC? First we have to recognise just how much investment
:06:24. > :06:27.is going into renewables. And more than half of the electricity
:06:28. > :06:33.investment in the last few years, power sector investment, has been in
:06:34. > :06:38.renewables. `` DRC. So they are going back from a low base at the
:06:39. > :06:42.moment, very fast indeed. And if you add Hydro, which is perfectly
:06:43. > :06:46.reasonable, into renewables, then the numbers are still stronger. Now
:06:47. > :06:52.how do we bring the cost of capital down, how do we mobilise capital?
:06:53. > :06:56.One thing you need is clear, strong policies. And in many countries
:06:57. > :06:59.around the world you have seen vacillation backwards and forwards.
:07:00. > :07:04.That is bad for any sort of investment, whether it be green or
:07:05. > :07:10.brown. So clear, strong policies are very important. Secondly you need
:07:11. > :07:13.better sources of finance. We need to increase the availability of
:07:14. > :07:17.funds from the infrastructure development banks. That is why the
:07:18. > :07:24.bricks led development bank was set up. As for South Africa. That is the
:07:25. > :07:30.kind of investment that this new investment bank could put their
:07:31. > :07:34.money in. All right. So good, create strong policies and new sources of
:07:35. > :07:37.finance. The savings are there. So the cost of renewables are coming
:07:38. > :07:41.down is your answer to critics like Richard Tolle who say that at the
:07:42. > :07:44.moment it is not extensive than fossil fuels. In addition, the
:07:45. > :07:53.reduce pollution. That is a big saving. In China for example, recent
:07:54. > :07:57.WHO OECD figures suggest that something like ten or 11% of GDP is
:07:58. > :08:02.the cost of air pollution associated with fossil fuels. That is an
:08:03. > :08:05.immense cost. 4% in the United States. It is those two things
:08:06. > :08:09.together, not just the cost of renewables coming down, which is
:08:10. > :08:12.extremely important, but also take into account these immense social
:08:13. > :08:16.costs, particularly the health costs of fossil fuels. And that a serious
:08:17. > :08:22.economics. Let's take what you say then and go forward and say, suppose
:08:23. > :08:26.a country or countries do make their policies, their energy sources more
:08:27. > :08:30.green. Take the European Union, they have targets to have 20% of their
:08:31. > :08:36.energy from renewable sources by 2020. But again, Richard Tolle has
:08:37. > :08:43.said that his costs EU members 250 billion euros in lost economic
:08:44. > :08:48.growth every year. And he says yet the net effect will be almost an
:08:49. > :08:58.immeasurable reduction in global temperatures of just 0.1% by 2100,
:08:59. > :09:04.nearly 100 years from now. So a lot of money but it may have a
:09:05. > :09:09.negligible impact upon greenhouse gas emissions. Frankly I would be
:09:10. > :09:17.deeply sceptical about those numbers. What we have looked at is
:09:18. > :09:25.the current cost of renewables, and how they are coming down. We have
:09:26. > :09:32.looked at the effects on the quality of growth as well as the rate of
:09:33. > :09:39.growth. And those are the key in his two weeks and in. At their purpose
:09:40. > :09:46.is to combat global warming. And if he is saying he spent 250, it could
:09:47. > :09:50.cost you 250 billion euros a year in lost growth and the impact is just
:09:51. > :09:58.negligible, on global warming, lost growth and the impact is just
:09:59. > :10:05.don't believe either of those things. I don't believe the impact
:10:06. > :10:10.on growth is anything like what is suggested there. Those come out a
:10:11. > :10:17.very mechanical and rather dubious models. I have to just pick you up
:10:18. > :10:24.on models, because you have your own models as well that support your
:10:25. > :10:27.findings, and an academic from Massachusetts Institute of
:10:28. > :10:39.Technology, MIT, says the models that you use, can be used to obtain
:10:40. > :10:43.any kind of result. They are useless policy analysis, they suggest the
:10:44. > :10:51.level of knowledge and precision which is simply illusory. The same
:10:52. > :11:00.could be said about your models. No, because essentially the way we
:11:01. > :11:04.do it is much more was up and the kind of overall aggregate
:11:05. > :11:12.macroeconomic models that he was talking about. And he actually made
:11:13. > :11:17.that statement in a forum in the Journal of economic literature. I
:11:18. > :11:21.also had a paper in that forum criticising the way in which a lot
:11:22. > :11:29.of these overall aggregate models were built. They feed in very strong
:11:30. > :11:35.growth. They need in very low risk. They feed in very low damages from
:11:36. > :11:39.climate change. We were doing something different. We were looking
:11:40. > :11:44.at the whole process of urbanisation. Of investing in
:11:45. > :11:53.energy. And we did it from the bottom up. And we asked what other
:11:54. > :11:58.new kind of technologies available? What do they cost? How could they be
:11:59. > :12:06.put together. So it was a very different kind of analysis, not
:12:07. > :12:11.subject to his criticism. I am sure he would agree with that. Is your
:12:12. > :12:17.message getting through though, when you have people like Tony Abbott the
:12:18. > :12:24.Australian Prime Minister saying, it sounds like common sense, is said
:12:25. > :12:30.this in June, before you report, it sounds like common sense to minimise
:12:31. > :12:35.human impact on the Environ. It doesn't make much sense however to
:12:36. > :12:42.impose certain substantial cost on the economy now in order to avoid
:12:43. > :12:50.unknown and perhaps changes in the future. So you could say, which you
:12:51. > :12:57.will say, Tony Abbott is wrong. You have to convince political leaves it
:12:58. > :13:05.dumber leaders. You have to convince the political leaders. They are
:13:06. > :13:12.elected. Who are the big ones? The big emitters in order are China,
:13:13. > :13:16.United States, and the European Union. And those leaders to
:13:17. > :13:22.recognise, quite rightly, the immense risks of climate change. It
:13:23. > :13:28.is very important that your listeners and viewers understand
:13:29. > :13:34.just how big those risks are. On current projections, we risk over
:13:35. > :13:45.the next 100 or 150 years, temperatures of three, four, or five
:13:46. > :13:50.China is the biggest emitter and they are seeing this as an immense
:13:51. > :13:56.problem, they are rapidly changing what they are doing. That is because
:13:57. > :14:00.people are going around Chinese city with masks because of the smog. That
:14:01. > :14:08.isn't what is going to happen in a few decades. That is here and now.
:14:09. > :14:15.They are responding to both. How do you try to make people, you say
:14:16. > :14:19.President Obama is a concern, but you said a research centre asked
:14:20. > :14:25.America what the top 20 priorities were and climate change was number
:14:26. > :14:32.19. Is it because you are saying things that are too apocalyptic? A
:14:33. > :14:38.study by University College in London found that the kind of
:14:39. > :14:44.appeals you have made to fear or ineffective and lead to suspicion
:14:45. > :14:48.that they are being manipulated. You asked me whether the risks were big
:14:49. > :14:52.or small in response to a statement with Tony Abbott that he thought
:14:53. > :14:58.they were small. I responded that the risks were big. The reason we
:14:59. > :15:01.wrote the report as we did, the reason we wanted to understand the
:15:02. > :15:09.relationship between better growth and better climate was because we do
:15:10. > :15:14.know and recognise the importance attached to growth and development.
:15:15. > :15:18.That is why we told the story correctly as we did. This is about
:15:19. > :15:28.better growth and better climate. We put better growth first. You accept
:15:29. > :15:35.that there is a failure by people like you to get their message across
:15:36. > :15:39.to people? There is more to do. Failure is much too strong. If you
:15:40. > :15:45.have got the big emitters in the world, those three, China, the US
:15:46. > :15:50.and the EU, half the world emissions, they understand the
:15:51. > :15:54.seriousness of the problem. They also recognise that there is growth
:15:55. > :16:00.here and now and that growth can be strong and clean. I am not saying it
:16:01. > :16:08.is stronger in terms of the GDP story, but it could be stronger or
:16:09. > :16:12.weaker. The cleaner, better growth, less congestion in our cities, less
:16:13. > :16:17.waste in our food, less pollution in the air that is killing so many
:16:18. > :16:23.people with the huge cost of GDP, 10% in China, this is a story of
:16:24. > :16:30.much better growth over these next 10` 20 years, a real attack on world
:16:31. > :16:34.poverty while at the same time, (CROSSTALK) the message isn't
:16:35. > :16:38.getting through. Narendra Modi has said clearly that he doesn't want to
:16:39. > :16:42.pollute his country to prosperity. He says he wants to make India a
:16:43. > :16:50.global manufacturing hub and that he was like to use renewable sources.
:16:51. > :16:55.However, his environment minister has also said this, 20% of our
:16:56. > :16:58.population doesn't have access to electricity and that is our top
:16:59. > :17:06.priority. We will grow faster and our emissions will rise. Developing
:17:07. > :17:12.nations, Africa, we want to use coal. People need to provide energy
:17:13. > :17:19.in developing nations now and they are reaching for fossil fuels. More
:17:20. > :17:23.than half of the electricity investment over the last few years
:17:24. > :17:26.around the world has been in renewables. There is continuing
:17:27. > :17:33.investment in coal but it is fraction if you take the medium term
:17:34. > :17:39.is going down. The Chinese are looking to peak their coal in ten
:17:40. > :17:46.years. The understanding and opportunities in renewables has gone
:17:47. > :17:51.up. As they stand, worldwide, we have build more coal burning power
:17:52. > :17:54.plants in the past decade than in any previous decade. The closures of
:17:55. > :18:00.old plants and keeping pace with this expansion. If you take the last
:18:01. > :18:03.three or four years, you have seen at least half of the investment in
:18:04. > :18:09.power in renewables. That is changing. That's why the report is
:18:10. > :18:13.timely. We are picking up on the changes in investment and cost.
:18:14. > :18:18.Let's stay with India and Prime Minister Narendra Modi. He said
:18:19. > :18:25.shortly after his election in May, I have worked in India for 40 years,
:18:26. > :18:30.he said that we want to bring to the 400 million people in India without
:18:31. > :18:37.electricity, we want to bring solar lighting to their homes. He said, we
:18:38. > :18:43.want to do it by 2019, not 2020, 2019, the end of his five`year term.
:18:44. > :18:46.That is a serious commitment to bringing electricity, meeting the
:18:47. > :18:51.problem the environment minister described through renewables. It is
:18:52. > :18:56.true that India's emissions will go up for a while. They are only two
:18:57. > :19:01.tons per capita. You say it is a race against time. India is one of
:19:02. > :19:06.many developing nations. Africa accounts for 3% of global emissions.
:19:07. > :19:14.You see the biggest industrial power in Africa, South Africa, the finance
:19:15. > :19:20.minister until recently said that we need to create jobs. We haven't got
:19:21. > :19:23.a choice except to build generating capacity, relying on what remains
:19:24. > :19:31.our most abundant and affordable energy source, Cole. 85% of South
:19:32. > :19:35.Africa's energy comes from coal `` coal. I have worked closely with him
:19:36. > :19:39.in the bricks make development bank, he was looking at finding new
:19:40. > :19:45.sources of finance focusing on infrastructure and renewables ``
:19:46. > :19:47.BRICS. Trevor manual, Finance Minister of South Africa for 13
:19:48. > :19:54.years was a member of our commission. What you are seeing with
:19:55. > :19:58.the understanding of the lower cost of renewables, with the
:19:59. > :20:02.understanding of the enormous social cost of fossil fuels in terms of
:20:03. > :20:06.pollution in the air and killing people, you are seeing a movement
:20:07. > :20:10.away, you see an understanding that we can do much better. That is
:20:11. > :20:14.something recent of the last few years, which is why the report is
:20:15. > :20:20.timely. When you speak with South Africans, for instance the founding
:20:21. > :20:25.secretary of the biggest trade union, he says, we would like to go
:20:26. > :20:29.for renewables but if you take countries like Germany, their
:20:30. > :20:33.baseload is guaranteed. We can't guarantee. We don't want to have
:20:34. > :20:40.intermittent power because we can't go elsewhere for it. We need to have
:20:41. > :20:41.it guaranteed. The president of the World Bank said no country is
:20:42. > :20:48.power. It is a different picture for the developing nations as they want
:20:49. > :20:54.to convert to renewable energy, they can't afford the power cuts. In
:20:55. > :21:03.China, has seen more than half the investment in renewable
:21:04. > :21:04.quotes you are bringing our a little out of date. I don't think that
:21:05. > :21:16.broadband, who I have worked would talk down the opportunities in
:21:17. > :21:22.renewables. They are not bad I am giving you the reality is that they
:21:23. > :21:26.want jobs now. That is a reality looking backwards. If you look
:21:27. > :21:30.forwards, the perceptions of people like Trevor manual, the member of
:21:31. > :21:36.the commission, and Finance Minister of that country, those are changing.
:21:37. > :21:42.That is what we are pointing to. Is it changing fast enough? 55,000
:21:43. > :21:45.coalminers in South Africa. You can't close those coal mines
:21:46. > :21:49.overnight and convert to renewable energy. It's going to take a while.
:21:50. > :21:54.Can I put this to you, the point at... The United States has more
:21:55. > :21:59.people working in renewables than coal mines. Those things are
:22:00. > :22:04.changing. You have to manage change. One way of managing change is that
:22:05. > :22:10.not all fossil fuels all the same. Gas is much cleaner than coal. Why
:22:11. > :22:14.not have a single, unified goal, as a climate lobbyist, and said...
:22:15. > :22:20.Climate economist, I beg your pardon. As the chief executive of
:22:21. > :22:24.Norway's Statoil said at the UN summit, replacing coal with gas and
:22:25. > :22:30.power generation is a simple way of halving emissions. People understand
:22:31. > :22:35.that. That could be part of the story, part of a bridge. We have got
:22:36. > :22:38.to have close to zero carbon emissions from the energy sector by
:22:39. > :22:44.the second half of this century, that is the way in which one of our
:22:45. > :22:48.commissioners put it. He is right. You can't have zero emissions from
:22:49. > :22:52.gas, you can have much lower emissions from gas than you do from
:22:53. > :22:58.coal. That is a very important point and that is why it could be valuable
:22:59. > :23:03.as a bridge. It won't do the job, because we will need close to zero
:23:04. > :23:08.or zero carbon emissions from energy in the second half of this century.
:23:09. > :23:11.Finally, we saw some of those marchers at the head of the UN
:23:12. > :23:17.climate summit in New York demanding a fossil free future. Is that
:23:18. > :23:25.possible and, if so, when? It is possible. We can have fossil
:23:26. > :23:29.free... If you have carbon capture and storage, if you catch the CO2
:23:30. > :23:33.and the greenhouse gases, you can have fossil fuel. What they called
:23:34. > :23:38.carbon capture and storage would allow fossil fuels to stay in the
:23:39. > :23:46.mix. I would look forward to 2050, to an electricity system with a mix
:23:47. > :23:51.of renewables, hydro, as another sort of renewable, nuclear, carbon
:23:52. > :23:59.capture and storage for some fossil fuels, a mixture like that could do
:24:00. > :24:03.the trick. And of course, we need most of all, much better energy
:24:04. > :24:04.efficiency. Lord Stern, thank you very much indeed for coming on
:24:05. > :24:29.HARDtalk. It is a pleasure. Once again, Tuesday will turn out to
:24:30. > :24:37.be a decent stay in central and eastern parts of the British Isles.
:24:38. > :24:41.Different story in the west. Warm and bright on Tuesday in central and
:24:42. > :24:47.eastern parts once we get rid of the fog. Towards the west, change is at
:24:48. > :24:51.hand. Thanks to this area of low pressure, throwing its weather front
:24:52. > :24:53.well ahead of it and into the western side of the British Isles.
:24:54. > :24:54.That's the reason for the