Climate change: US economist's grim warning to Blair's Cabinet

The stark findings of Nicholas Stern's report yesterday increased the pressure on the PM to act

A A A

Global warming could cost the world's economies up to 20 per cent of their gross domestic product (GDP) if urgent action is not taken to stop floods, storms and natural catastrophes.

That stark warning was given to Tony Blair and his cabinet yesterday by Sir Nicholas Stern, a former World Bank economist, and is said to have left cabinet ministers chastened by the magnitude of the threat posed by climate change.

In a preview of a report he is to deliver next Monday, Sir Nicholas told the Cabinet the world would have to pay 1 per cent of its annual GDP to avert catastrophe. But doing nothing could cost 5 to 20 times that amount. He told them: "Business- as-usual will derail growth."

The massive 700-page report - commissioned by the Chancellor, Gordon Brown - was described as "hard-headed" and "frighteningly convincing". It focused on the economic peril now confronting the world, unless action was taken to combat harmful CO2 emissions that contribute to global warming.

"He left no one in any doubt that doing nothing is not an option," said one Whitehall source. "And he stressed that the need for action was urgent."

His review could be a watershed in overcoming scepticism about the existence of global warming. "It was hard-headed," said another source. "It didn't deal in sandals and brown rice. It stuck to the economics."

Mr Brown believes it could force the oil-dominated White House of George Bush to concede the importance of action to curb climate change. One minister who was present said it destroyed the US government's well known argument that cutting carbon emissions was bad for business.

His report, covering the period up to 2100, warns that climate change could cause the biggest recession since the Wall Street Crash and the Great Depression. A downturn of that magnitude would have "catastrophic consequences" around the globe, with the poorest countries hit first and hardest, Sir Nicholas told the Cabinet. Insurance analysts, who submitted their evidence for his report, said they feared insurance claims could exceed the world's GDP.

One witness said: "The entire pitch of the report is that there is nothing in it about the need to be green, or about caring for the environment, it's all hard-headed economic reality," he said.

The Treasury believes that publication of the Stern report could be a turning point in public opinion in America, to force the Bush administration to accept the scientific evidence that global warming is happening.

"It is huge, a desk-breaker. It could be as important for climate change as the Africa Commission was for poverty in Africa. Its biggest impact could be on public opinion in America, which is like turning around a tanker," said one official. It is expected to dominate the UN international climate talks scheduled to start in Nairobi, Kenya, next week.

The Prime Minister's official spokesman said the Cabinet recognised "this was a very serious piece of work on a very serious subject and a very clear piece of thinking about the economic benefits of dealing with climate change now."

The Foreign Secretary, Margaret Beckett, is believed to have been extrapolating from the findings when she warned this week that global warming could cause more conflicts as a result of massive population shifts because of rising sea levels and flooding.

Downing Street appeared to be gearing up last night to use the Stern report to launch a fightback over the Government's record on climate change which was attacked yesterday as "woeful" by Sir Menzies Campbell, the Liberal Democrat leader. The Chancellor gave the clearest hint so far that he would use his forthcoming Budget and the pre-Budget report next month to raise "green" taxes, including the cost of motoring. He promised legislation on climate change, but he appeared to resist the growing demands for binding annual targets for reducing CO2 emissions.

The Conservative leader, David Cameron, put forward his own Bill to impose annual targets monitored by a new independent commission. That strategy is supported by a growing cross-party coalition of more than 400 MPs who may still force the Chancellor to change his mind.

Have you tried new the Independent Digital Edition apps?
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Senior Digital Marketing Consultant

£28000 - £45000 per annum: Recruitment Genius: A Senior Digital Marketing Cons...

Recruitment Genius: Assistant Stores Keeper

£16640 - £18500 per annum: Recruitment Genius: An Assistant Stores Keeper is r...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Software Developer - C# / ASP.NET / SQL

£17000 - £30000 per annum: Recruitment Genius: Developer required to join a bu...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living