Lord Stern: development and climate finance should not be separated

Lord Nicholas Stern has argued that government should not consider development and climate finance to developing countries as separate issues because they are interconnected in a new policy paper.

The Grantham Research Institute on Climate Change and the Environment and the ESRC Centre for Climate Change Economics and Policy at the London School of Economics published the paper.

The paper states, “The challenges of development, growth, poverty reduction and sustainability are deeply and intricately interwoven with those of mitigation of and adaption to climate change. It would be deeply damaging to try to treat them as separate entities for action and for finance.”

The policy paper has been published ahead of two key events, including UN climate talks in Paris later this year, where it is hoped a universal treaty on climate change can be agreed on. An international conference on finance for development is also due to take place in Addis Ababa, Ethiopia, in July.

“The different organisational tracks of the conference in Addis Ababa and the summit in Paris should be seen as an opportunity to complement and reinforce, not as a recipe for separation,” the paper continues.

“Indeed, radical separation of finance for development and climate finance could be deeply damaging. It is a serious mistake to see action on climate and action on development as in conflict, or action on the former as a ‘plot’ to slow the latter.”

The report outline six areas that should be prioritised when it comes to climate finance, including promoting low-carbon activity and investing in innovation for climate action. The environment is also highlighted as a priority area, with the paper calling for climate finance to be used to avoid deforestation, support more productive land use and protect fragile resources.

In the paper Stern notes that negotiations about climate finance have focused on the achievement of a commitment by rich countries to provide $100 billion each year by 2020 to developing countries to aid in the transition to low-carbon economies and mitigate the impacts of climate change.

Stern adds, “In thinking about the scale and nature of climate finance for the Paris summit, it should be clearly recognised that overall infrastructure finance for emerging markets and developing countries could be of the order of $3 trillion per annum over the next decade or so. It is important to see climate finance for the Paris summit, at $100 billion per annum, as catalytic in this context, rather than ‘gap filling’.”

A separate study published earlier this month argued that rich nations could pledge up to $2 trillion each year by mid-century in climate finance to developing countries without exceeding more than 2% of GDP.

Photo: Official U.S. Navy Page via Flickr

Further reading:

Stern admits to underestimating climate change in 2006 review

‘Stern 2.0’ review to look at costs and benefits of tackling climate change

Lord Stern: delaying climate action is ‘dangerous’

Fair finance, the new fair trade?

UN Green Climate Fund ready to mobilise finance