The Stern Report

In 2005, the British Government asked Sir Nicholas Stern, a noted environmental economist, to investigate the potential impacts of climate change on the economies of not only the UK but the world, as well as on the global ecosystem.

Sir Nicholas released his report in October 2006. The report ran to more than 700 pages and caused headlines around the world.

Among Sir Nicholas’s main findings were:

• Human activity is causing a rise in the level of greenhouse gases in the atmosphere.
• This in turn is leading to a rise in atmospheric temperature that will, among other things, cause
  
  
• more extreme weather conditions
• rising sea levels and therefore mass migrations of maritime populations
• increasing levels of disease, drought and famine
• There is still time to avoid the worst impacts of climate change if strong collective action starts now.
• Deforestation causes 24% of carbon dioxide emissions and 18% of greenhouse gas emissions globally, compared to only 14% of emissions caused by the global transport sector
• Both reforestation and the avoidance of deforestation are vital if we are to avoid the worst effects of climate change.
• Curbing deforestation is a highly cost effective way of reducing greenhouse gas emissions.
• In practice, tradable quota systems, such as the EU’s emissions-trading scheme, may be the most straightforward way of establishing a common price signal across countries.
• Tackling the causes of poverty through an approach that offers local communities alternatives to deforestation is an important part of efforts to reinforce and sustain action.
• Reforestation and afforestation in marginal agricultural land and on abandoned land offer significant local benefits by reducing vulnerability to soil erosion and desertification.

The findings of The Stern Report corroborate the thinking underlying Carbon Capital’s core business model and provide further evidence that investment in reforestation can provide not only profits but both environmental and social benefits.