Stern challenges Bush with call for green tax

Sir Nicholas Stern, the author of an apocalyptic report on the dangers of global warming, called for more green taxes from world governments in an attempt to cut carbon emissions.

He said that it would be "plain daft" to reject the notion of a global carbon tax given the urgent need to tackle climate change, which he called the "biggest market failure the world has ever seen". He added: "We need to use all the tools we've got. It would be mad to throw one away."

The former World Bank economist stopped short yesterday of calling for a global carbon tax, but said it was "very important to harmonise taxes as best we can". He pointed to the example of the UK, where high taxes on petrol in effect act as carbon taxes, as evidence of how national governments could force citizens to change their behaviour and emit less carbon.

"We should use tax mechanisms as one weapon in an armoury, along with regulation," he said, expressing scepticism that a global carbon tax would work. "Taxes are there for many reasons. You don't have to label them carbon taxes to be effective."

Sir Nicholas was speaking from a Davos obsessed by the environmental threat posed by greenhouse gases. The 2,400-plus delegates have the option of attending no fewer than 17 separate debates on climate change, should they share Sir Nicholas's concerns. The WEF meeting itself is attempting to be 100 per cent carbon neutral and has called on all attendees to offset the emissions produced by their own journeys to the venue.

Sir Nicholas said US President George Bush's belated awakening to the dangers of climate change was a "move in the right direction", welcoming his volte-face in his State of the Union speech on Monday. "There is a recognition of a link between climate change and human activity" by most governments, including the US. "If we are all to move forward together, we must appreciate what others are doing."

Cutting carbon emissions requires a four-fold approach: setting a price for carbon; breaking down the barriers to people investing in technology to cut greenhouse gases; a helping hand from governments; and addressing the problem of deforestation. Setting a price for carbon requires a mixture of taxation and carbon trading schemes, he added.