His first task will be to carry out a major review of the economics of climate change. He appealed yesterday for scientists, businesses, environmental groups and others to send in their evidence by 9 December. "Climate change is one of the most serious issues facing the world in the 21st century. In order to tackle it whilst also promoting a dynamic, equitable and sustainable global economy, we will need to have a deep understanding of the economics of this complex problem. That is what I hope this review can achieve," he said.
Sir Nicholas joined the Treasury in 2003 from the World Bank, where he was chief economist for three years. Earlier this year, he directed the Government's policy and research commission for Africa.
His appointment was announced as the Government battled to prevent an embarrassing defeat in the Commons, where the Conservatives and Liberal Democrats had joined forces to call for tougher measures for tackling global warming. Government whips eventually succeeded in mustering a comfortable majority of 80, winning by 309-229.
Oliver Letwin, the shadow Environment Secretary, admitted that the Conservatives were to blame, as well as the Government, for not pushing the issue to the top of the political agenda.
He accused Mr Blair of abandoning the campaign for a new, binding world-wide agreement on global warming, to replace the Kyoto protocol. He added that Britain was moving "remorselessly in the wrong direction" with carbon emissions rising again after dipping in the mid-1990s. His Liberal Democrat counterpart, Norman Baker, called for all three main parties to thrash out a common policy, and for the Government to set up an independent body to monitor emissions. "Trying to find a consensual way forward actually helps the Government to take the decisions which perhaps it knows it wants to take but fears to do so because of the public reaction," he said.
But the Environment Secretary Margaret Beckett said it was ridiculous to suggest that Mr Blair had given up on global warming in the face of US indifference. She told MPs: "There is no government and no leader anywhere in the world who has done more than our Prime Minister to create the circumstances under which the world community might begin to explore the possibilities and scope of international negotiation beyond the first Kyoto commitment period. This country ought to take take pride in that."
She also insisted that the UK emissions were already adequately monitored according to international guidelines, scrutinised by the National Audit Office among others, and subject to international peer review.
She saidthere was a new willingness to look ahead, beyond 2012, when the Kyoto commitment period comes to an end - more so than a year ago. Ms Beckett said that the agreement at July's Gleneagles summit for countries including India and China to begin such a discussion was "a major and personal diplomatic achievement" by Mr Blair.