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  • Writer's picturePeers for the Planet

Lord Stern updates Peers on how the race to decarbonise is reshaping the global economy

Updated: Nov 15, 2023

Lord Stern told Peers that India and China, two of the most important countries involved in the global race to decarbonise, are experiencing rapid transformation in the drive for net zero and are leading the way in embracing this growth story of the 21st Century. The P4P briefing event took place in parliament in May and was Chaired by Lord Jay of Ewelme.

Lord Stern has decades long experience working in both countries and has seen first-hand the great forces of change they are experiencing as they pursue growth and sustainable development. Both countries are scaling up renewable energy rapidly, with renewables accounting for 40% of electricity generation capacity and 20% of generation in India and 43% of electricity capacity and 29% of generation in China, which added an enormous 152GW of renewables capacity last year (UK total electricity capacity is circa 75GW). China and India, like many emerging and developing economies, can see the prize in embracing the transition to decarbonised societies – not just in GDP terms but in the huge promise they offer in helping to realise progress across all of the Sustainable Development Goals.

Emerging and developing economies will be at the centre of this growth story and global private finance and institutions need to be rapidly reconfigured to support this. If not, we risk a lost decade of development which will not only undermine the promise this sustainable development and growth story offers to us now, it could seriously curtail the options and possibilities for future generations and our chances of transitioning to a low carbon pathway in time not to overshoot 1.5 Celsius degrees of warming.

What does this mean for the UK?

Although India and China’s emissions are now far larger than the UK’s, Lord Stern said we should not for a moment accept the argument that by pursuing this agenda we are sacrificing growth. India and China are making huge investments in clean technologies and every country should be pursing clean growth as the investment and growth opportunity of the century.

Lord Stern said the UK has expertise to offer the world in many areas, including through its world leading academic institutions that help foster global collaboration, as well as more technical expertise such as in grid management technologies that will be crucial to delivering the clean energy transition as transport and heating largely become electrified.

Importantly, the UK still has a role and important voice in global institutions such as the IMF, World Bank and other Multilateral Development Banks that will need to play a bigger role in delivering this global growth opportunity in the coming years. Lord Stern said many of these multilateral institutions have never been more important since WW2, as they will be crucial in providing the confidence needed for private capital to be mobilised in emerging markets and developing economies so they can develop sustainably and help keep global climate targets within reach.

Lord Stern said that global competition will rightly remain a leading driver of this next phase of the net zero growth story, as we have seen recently in the US and Europe outlining ambitious plans to attract investment and encourage innovation and growth for the net zero transition. Collaboration and working together will remain key though, as without it we risk derailing the urgent and coordinated action we need to see in the coming decade. The transition to low carbon economies offers many areas of common ground, especially in areas of science and innovation where countries have a shared incentive to work together such as in developing storage and battery technologies and alternative air and sea fuels.

India and China will be key players in this global endeavour, and as Lord Stern said at the briefing, how the world works together to achieve this will be a key test in the next crucial few years – and it will be a hard but not hopeless task.


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