Stern: "While the economic crisis is big, the planetary crisis is still bigger"

Leading politicians, academics, economists and business leaders attending the World Future Energy Summit in Abu Dhabi today called for firms around the world to accelerate efforts to address their carbon footprint, despite the short term financial pressures arising from the global economic downturn.

Delegates and speakers at the conference admitted that the financial crisis had undoubtedly hit efforts to curb carbon emissions in recent months, primarily as a result of the drying up of credit for costly renewable energy projects.

According to figures from BP Alternative Energy presented at the conference, in 2008 renewables saw an increase in capital investment globally compared to 2007 of just five per cent – a dramatic decrease from what had been a 50 per cent year-on year increase for the three preceding years,

"We have to restore momentum in these industries," said Vivienne Cox, chief executive of BP Alternative Energy, adding that government's alone could not be relied upon to stimulate the sector. "Policy makers can provide the pull, but businesses still need to provide the push," she said.

Also speaking at the conference, Sir Nicholas Stern, author of the UK government's Stern Review, said that despite the onset of the economic downturn the case for investing in low carbon technologies and business models remained compelling.

"The costs of inaction are immense and the costs of action are manageable," he said, reiterating his view that it will cost far less in the long-term to invest in tackling climate change now.

"Inaction will rewrite where we can live, leading to mass population movements, and plunging us into global conflict," he said. "While the economic crisis is big, the planetary crisis is still bigger."

Stern's upper estimate says that it will cost the world economy some $2tr to tackle climate change, representing approximately two per cent of global GDP.

He added that reaching an agreement in Copenhagen later this year is vital, and it is looking more likely that China and the US – reluctant in the past – will be in favour of radical action.

Connie Hedegaard, the Danish minister for the environment who will chair talks in Copenhagen later this year, told the summit that moving to tackle carbon emissions has significantly benefited Denmark's economy over the past few years.

"There is no doubt that going green delivers millions of jobs," she said. " The economic crisis gives us a unique opportunity to move away from the business as usual scenario."

She said that over 17 per cent of Denmark's energy mix now comes from renewables, rising to 20 per cent by 2011 and 30 per cent by 2020. Meanwhile, a Danish house built today uses half as much energy as one built 25 years ago, and over 90 per cent of Danish waste is recycled.

Hedegaard said that these successes had delivered significant gains to the Danish economy. "For years we have exported these solutions to all parts of the world, creating thousands of new jobs and boosting our economy," she argued.

Susan Hockfield, President of the Massachusetts Institute of Technology, agreed that tackling the financial crisis and the climate crisis can be achieved at the same time.

"I'm convinced that the next wave of economic growth will come from the same force that powered the IT revolution and the biotech revolution – innovation," she said. "And innovation in energy comes from academia as much as from anywhere. If we want to turn this innovation into practical market answers then we need to provide huge investment now."