The Global Deal: Climate Change and the Creation of a New Era of Progress and Prosperity [Hardcover]

This concise and very good book is fine effort at public education. Stern, the leader of the now well known Stern Report on response to climate change, presents an outline of and argument for a rational and well considered approach to addressing global warming. The publication of this book stems partly from the fact that the next major conference on global climate change will occur later this year in Copenhagen. Stern clearly hopes that this conference will result in an effective international commitment to address global warming, and this book is partly an effort to raise awareness of approaches to address global warming and partly, I think, an indirect lobbying effort on Stern's part to push his approach.

The departure point for this book is the idea that anthropogenic global warming is a real and very serious problem. The opening chapters are a brief survey of the idea of anthropogenic global warming and why it poses an extremely serious threat. This is not, however, a systematic review of the science but rather a brief presentation of a platform for the policy prescriptions that follow. An in depth review is not, however, necessary due to the overwhelming nature of the evidence for global warming and its potential consequences. If you're not prepared to at least consider the possibility that global warming is a real and serious problem, then this book is not for you.

Stern lays out some commonsense principles for his proposed approach; policies must be effective, efficient in the sense that they cause the least economic disruption, and equitable. The last is particularly important and highlights an important point made repeatedly by Stern. An effective response to global warming is possible and ethical only if it embodies policies that provide simultaneously for development and poverty reduction in the 3rd world. Stern, who spent much of his career working on development economics, makes a strong moral and prudential case for this point. Based on present climate modeling, Stern suggests a target of stabilizing atmospheric CO2 equivalent concentrations at 500 ppm by midcentury. In the longer run, he supports greater reductions in CO2 equivalent concentrations but given that we're already >400 ppm and that carbon emissions are rising, he argues well that this is a politically obtainable and useful target. Given this target, he derives estimates of how much carbon emissions need to be reduced and where those reductions must occur. He is very clear, and this is a key point, that some consequences of global warming are unavoidable, so a strong commitment to mitigation and emission controls is needed. From this follows some analysis of costs and where costs will be allocated. Stern has a particularly good chapter criticizing the work of other economists, notably the writings of the Yale economist William Nordhaus, who have provided alternative and much more complacent economic analyses.

Stern then develops an outline of policy measures. These are largely a series of efforts to correct market failures and externalities by using regulations to encourage market mechanisms to reduce emissions. This is suggested to be a mixture of global cap and trade systems, carbon taxes, and some more direct regulations. One of Stern's major points is that the developed world, notably the USA, will have to take the lead and demonstrate reductions and technology development, with developing nations phased in as they catch up in terms of social development. Sterns argues well that this is the only moral and practical avenue. Stern also places great emphasis on technology development and dissemination. Stern creditably believes that a wide array of policies and innovations will be necessary to deal with the problem. He argues also that developed nations will have to make a real commitment to policies that will raise standards of living in 3rd world nations.

Stern's plan is optimistic but he doesn't underestimate the challenges. As he points out, the historic model of industrialization is one of high energy consumption and high carbon emission. To address global warming in a practical and successful way will require a new approach to development. Stern provides both a good sense of where we have to go and how to do it. This book deserves wide readership.

Successfully confronting climate change is directly related to also reducing America's balance of payments and air pollution; it is also key to progress on helping the world's poor. "The Global Deal" provides an excellent source of information for moving forward. The author's credibility is vouched for by his having been Chief Economist at the World Bank from 2000-2003, first holder of the I. G. Patel Chair at the London School of Economics, Chair of the Grantham Institute for Climate Change and the Environment (2008- ), his election as an Honorary Fellow of the American Academy of Arts and Sciences, and his being recruited by Gordon Brown to conduct reviews on the economics of climate change and economic development.
The danger from climate change, says Stern, is not primarily in the added heat, but from water - an increase in the number and severity of storms, droughts, floods, and rising seal levels. A 5 degree C increase is estimated to be the limit that could be incurred without extreme damage - yet, it is the same change (opposite direction) that brought the extreme of last ice age 10,000 years ago.

Poor countries are the least responsible for the existing stock of greenhouse gases, yet get hit the earliest and hardest by their effects. China has overtaken the U.S. to become the world's largest producer of greenhouse gases; Indonesia and Brazil are third and fourth - mainly the result of deforestation and peat fires. Rich country populations represent about one in six today, by 2050 they will represent only one in nine. Thus, meeting the energy needs of the poor will be more essential than ever.

Stern cites estimates that the Amazon forests store about 10X the carbon emitted globally/year; those same forests store about 10X/acre as northern native forests.

Retention of Kyoto gases in the atmosphere is increasing at an increasing rate as emissions increase and the 'planet's absorptive capacity decreases. Between 1930-1950, it was about 0.5 ppm/year, doubling from 1950-1970, and doubling again from 1970-1990. The rate has reached 2.5 ppm/year in the last decade, and under business as usual, would reach 3-4 ppm for the first half of this century. At that point, temperature would further increase due to releases from methane escaping from thawing permafrost, etc.

Five hundred ppm is seen by many as "the safe limit;" we now are at 430, and adding 2.5/year. If world output grows slightly over 2%/year until 2050 it would be 2.5X the present level. To achieve stability at 500 ppm requires a 80% reduction in emissions/output unit. Major emission sources in 2000 include electricity and heat generation (27%), land use change and forestry - mostly deforestation and peat fires (18%), agriculture (13%), transportation (12%), and manufacturing and construction (11%).

About one-third of new power capacity installed in the U.S. 2007 was wind. Coal is attractive because of dependability (eg. night requirements are not a problem), security of supplies, and low costs.

The last time the world was 4-5 degrees C warmer was 30-50 million years ago when alligators lived near the North Pole.

Marginally sophisticated attempts at obfuscation focus only on the mean expected temperature increases in the short-term, rather than a longer horizon or possibility of higher increases. Some on the right see environmental causes as a Trojan Horse used by those who would like to regulate and control the economy; others on the left see the issue as an elitist one diverting attention from poverty. Regardless, the costs of change implies a large audience for arguing such change is not worth the cost, can be postponed, or is not necessary.

Achieving 500 ppm would cost about 2% of the world's GNP over the next half-century, estimates Stern. Seems like a bargain and good investment to me!

Nicholas Stern is not an abstract intellectual. He is the former Chief Economist of the World Bank and was chosen by the British Government to produce the famous 2007 Stern report on global warming. His point is very important. Climate change is more than a science problem. It is a global economic and political problem. The chances of solving this problem are zero if there is not some sort of "global deal" between rich and poor nations. Europe and America put most of the carbon in today's atmosphere, and it's going to be there a long time. They should pay a larger global share than other nations to clean up the mess they made. Furthermore, many poor nations simply cannot afford to pay for the transition from old polluting technologies to new clean energy. Sadly, I am not as optimistic as Stern. I do not see a willingness of the rich to pay what is needed. For a greater perspective on the whole global environmental situation, I would recommend Plan B 3.0: Mobilizing to Save Civilization (Substantially Revised). If you want to read the original 2007 Stern report you can get it on Amazon The Economics of Climate Change: The Stern Review.

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