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Climate Change

Volume 464: debated on Thursday 18 October 2007

15. What recent assessment he has made of the likely impact on the economy of climate change over the next 10 years. (158873)

The Stern review found that the costs of avoiding the most dangerous impacts of climate change are significant but manageable and could amount to around 1 per cent. of global gross domestic product. Those costs will be minimised with co-ordinated international action and are significantly less than the costs of inaction. Modelling for the energy White Paper suggests that there could be transition costs to the UK economy of between 1 and 2 per cent. of gross domestic product in 2020 in reducing emissions by 30 per cent., working from the 1990 base.

Climate change is of course a huge problem facing our country and the world. Far too often in this Chamber and around the world, we have debates on the causes of climate change, but not enough on the effects. May I seek my hon. Friend’s assurance that the Treasury will liaise with other Departments to ensure that that imbalance is rectified and that we have much more co-ordinated action between Departments, perhaps led by the Treasury as the main funder, on adapting to the inevitable climate change that we will experience, and are already experiencing, this century?

I can reassure my hon. Friend that that is precisely what the Treasury will be doing. The climate change Bill, which is due to come before the House, will create for the first time measured carbon markets and reductions. That will give us a tool to enable co-ordinated action in the UK. However, as he is aware, since the UK is responsible for only 2 per cent. of world emissions, international action is a key too.