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When economist Nicholas
Stern released his 700-page
review of the econom-
ics of climate change for
the UK government in
2006, it fundamentally
reoriented discussions of the subject. The
review opened the way for a broader, more
realistic and more relevant approach than
economists had provided until then.
In his new book, A Blueprint for a Safer Planet,
Stern takes things further and lays out a road-
map for managing the climate crisis. He devotes
much of the book to describing basic charac-
teristics of the climate problem, including our
current scientific understanding of the Earth
system and humanity’s role within it, the dangers
posed to human societies by climate disruption,
and the inherent uncertainties of climate change
and how we can best deal with them. He raises
thorny but unavoidable ethical issues, such as
how we should weigh up the possible costs and
benefits of climate change now and in the future
— known as discounting. He explains what poli-
cies we should adopt to reduce greenhouse-gas
emissions and what we can learn from current
good practice in reducing them.
Although much of this material is well
known, Stern presents an up-to-date, logically
argued synthesis, using a style that makes his
book more intelligible than many others on
the topic. For example, he masterfully explains
the advantages and disadvantages of two of the
main mechanisms proposed for limiting emis-
sions. One is a carbon tax that would charge
polluters b ased on the emiss ions they produce.
The other is ‘cap, auction and trade’, in which a
global emissions limit, or cap, is internation-
ally agreed, permits to emit are auctioned, and
holders then buy and sell the permits.
Stern clearly describes the trade-offs between
the price certainty of a tax and the quantity cer-
tainty of a cap system, emphasizing that “we
cannot have both price and quantity certainty
in an uncertain world”. He also points out some
less obvious characteristics of each option, such
as how caps “allow international private-sector
flows of carbon finance from rich to poor coun-
tries”, and how they might deal better with the
oligarchic, price-manipulating nature of the
oil and gas industry than a tax would. He con-
cludes that a mix of policies will be necessary,
but that a clear understanding of the inherent
trade-offs is needed to optimize this mix.
Stern’s treatment of the issue of discounting
the future is also exemplary. e main criti-
cism of the Stern Review on the Economics of
Climate Change came from a few economists
who disagreed with the low discount rates it
used to handle this issue. Discounting is about
how much weight we should give to costs and
benefits that occur in the future, relative to the
present. The high discount rates of around
3–6% used by some economists may be useful
for comparing small-scale public investments,
such as bridges or roads, but are totally inap-
propriate for issues such as climate change. At
6%, any impacts that might occur more than
50 years in the future are negligible. Stern clearly
Supercontinent: Ten Billion Years in
the Life of Our Planet
by Ted Nield (Harvard Univ. Press, $18.95)
Geologist Ted Nield gives a thorough account of
Earth, from long before Pangaea to far into the future.
“To handle it without oversimplification or getting
lost in a maze of detail is no small accomplishment,”
wrote David Oldroyd in his review of the hardback
edition (Nature 449, 540; 2007).
Earth Under Fire: How Global Warming is
Changing the World
by Gary Braasch (Univ. California Press, £14.95)
Award-winning photojournalist Gary Braasch
supplies breathtaking imagery of the effects of
climate change. He includes personal accounts
from eyewitnesses and researchers, together with
the best evidence available, to give a refreshing
and intelligent take on this well-covered field.
Could climate change capitalism?
A Blueprint for a Safer Planet: How to
Manage Climate Change and Create a New
Era of Progress and Prosperity
by Nicholas Stern
Bodley Head: 2009. 256 pp. £16.99
Economist Nicholas Stern’s latest book is a rare and masterly synthesis of climate-change science and
economics. His ‘global deal’ could change capitalism for the better, says Robert Costanza.
NEW IN PAPERBACK
ILLUSTRATIONS BY ANNABEL WRIGHT
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© 2009 Macmillan Publishers Limited. All rights reserved
American Prometheus: TheTriumph and
Tragedy of J. Robert Oppenheimer
by Kai Bird and Martin J. Sherwin
(Atlantic Books, £9.99)
This impressively researched and well-written
book explores the life of nuclear physicist J. Robert
Oppenheimer, covering the different sides of his
personality and his rise and fall in society. Bird and
Sherwin provide a thorough exploration of the
science and politics of the nuclear age.
Floods, Famines and Emperors: El Niño and the
Fate of Civilizations (Tenth Anniversary Edition)
by Brian Fagan (Basic Books, $17.95)
First published in 1999, Brian Fagan’s book charts the
discovery of El Niño — the Pacific ocean-atmosphere
oscillation underlying freak weather events —
and shows how climate change affected ancient
civilizations. In describing how they coped, or not,
Fagan highlights the problems we face in dealing with
climate change today.
describes the ethical basis for discounting,
and puts to rest criticisms of the low discount
rates used in the Stern Review.
The essence of Blueprint for a Safer Planet,
however, is the chapter in which Stern outlines
the structure of a proposed global climate
deal. He bases his argument on three guiding
principles: effectiveness, efficiency and equity.
His suggestions are complex and interrelated,
and he emphasizes that they are an integrated
package, not a menu from which selections can
be made. Stern also stresses that no deal will
work without true international collaboration.
His proposal focuses on six elements: targets
for emissions from rich countries and world
emissions; targets for developing countries;
an effective international emissions-trading
regime; combating deforestation; technological
advances to reduce emissions; and overseas
assistance to help developing countries adapt
to climate change.
Stern proposes global targets
for cutting emissions by half by
2050, relative to 1990 levels, with
developed countries acting first
and more aggressively with cuts of
around 20–40% by 2020 and 80%
by 2050. Developed countries
would demonstrate the feasibility of ‘low-carbon
growth’, share technologies with developing
countries and implement trading and financial
mechanisms. Based on the successful example
of these countries, developing countries would
commit to targets by 2020, reaching a target of
2 tonnes of carbon per capita by 2050.
Stern’s global deal contains all the right
elements. We need targets, but as we learn
more we may discover that even bigger cuts
are required to avoid major climate impacts.
We will need enforceable caps coupled with a
rate of decline that can be adjusted over time.
We must also combat deforestation, effectively
spread new technologies and directly assist
developing countries with adaptation, but the
challenge is how to do all this in a coordinated,
focused and sustainable way.
Stern recognizes t hat this will be costly and
complicated to achieve in practice. As the
former chief economist of both the European
Bank for Reconstruction and Development
and the World Bank, he has long experience
of multilateral institutions and recognizes
that existing ones are not up to the task. Under
the current arrangements, there is no single
authority that is responsible for ensuring
compliance with climate commitments.
Similarly, there is no international funding
mechanism dedicated to climate change.
Although Stern is hesitant to recommend
new institutions, which are costly to set up
and run, he has learned from experience that
“coherence within climate-change activities
is of great importance and without a clear
primary responsibility in one place it would be
very elusive”, noting that “priority would slip
relative to other shorter-term issues in … other
organizations”. The design of this new global
institution is not addressed, however.
One institutional design that might meet all of
Stern’s criteria, as well as alleviate
poverty, is the ‘Atmospheric
Trust’ prop osed by Pet er Barnes
and others (P. Barnes et al. Science
319, 724; 2008). Such a trust
would use a cap, auction and trade
system, reducing the cap over
time to stabilize greenhouse-gas
concentrations at the desired target. A fraction
of the revenues would be returned as ‘dividends’
on a per-capita basis to everyone on Earth. This
would directly address poverty issues. The rest
would be invested in protecting and enhancing
the atmospheric asset — as proposed in Stern’s
global deal — using initiatives such as payments
for the carbon-sequestration services of forests
to combat deforestation, investment in open-
access renewable-energy technology to reduce
emissions and direct assistance to developing
countries for adaptation to climate change.
One fundamental shortcoming of the
book, however, is its uncritical acceptance of
economic growth as the only path to future
prosperity. Stern acknowledges that any
fu ture g rowth mus t be ‘low c arb on’, bu t fa ils to
recognize that conventional economic growth
is merely a means to the goal of sustainable
human well-being. Economic growth is not
— and should not be — an end in itself.
There is evidence in developed countries that
economic growth beyond a certain point does
not improve well-being, owing to the hidden,
external costs of that growth, including climate
impacts. For example, an oil spill increases gross
domestic product (GDP) as someone must pay
to clean it up, yet it detracts from well-being.
Increased crime, sickness, war, pollution,
fires, storms and pestilence are all positive for
GDP because they increase economic activity.
We need to move beyond GDP as a measure
of well-being — something for which it was
never designed — and develop and use better
indicators of sustainable quality of life. Proposed
alternatives include the Genuine Progress
Indicator and Gross National Happiness, as
used in Bhutan in south Asia, but we need to
build a broad global consensus on alternative
measures to move forward.
Stern may not fully recognize that a global
deal for climate change has positive implications
for global capitalism. The deal will require a
new, more nuanced suite of property rights
and responsibilities that give adequate weight
to ‘the commons’ — public goods such as the
atmosphere that are open-access but need to
be assigned appropriate property rights so they
can be protected. We cannot, and should not,
assign private property rights to this inherently
common asset, but a global institution that
charged for greenhouse-gas emissions would
at least implicitly assign such common rights.
The key is to find the right balance between
private and common property while prote cting
the commons. Neither socialism, in which most
property is common, nor capitalism, in which
most is private, have dealt adequately with
open-access commons because they have failed
to get this balance right. The meltdown of these
economic sy stems presents the opportunity to
find a new balance that will help us lay the path
to sustainable prosperity. ■
Robert Costanza is director of the Gund Institute
for Ecological Economics at the University of
Vermont, Burlington, Vermont 05405, USA.
e-mail: robert.costanza@uvm.edu
See Editorial, page 1077.
Listen to an interview with Nicholas Stern at
www.nature.com/nature/podcast.
“A global deal for
climate change
has positive
implications for
global capitalism.”
1108
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OPINION SPRING BOOKS
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© 2009 Macmillan Publishers Limited. All rights reserved
