Bringing the Environment into Economic Development

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In 2006, temperature records in the UK were broken yet again. Traditionally, brief summer heat waves in England have been welcomed as a relief from the more familiar diet of leaden skies and damp, persistent drizzle. But last summer’s weather was far from a hugely enjoyable experience. In London, during the hottest July on record, temperatures reached 36C. Not for the first time, health warnings were posted in the London underground. The Evening Standard, London’s newspaper, published on its front page an aerial photograph of a normally verdant Hyde Park burnt brown like an African savannah. Climate change came home to the UK last year in an equally headlinegrabbing way with the Stern report, unveiled by Gordon Brown and Tony Blair in October 2006. In the report’s 600 pages (reviewed in this issue), the likely environmental impacts of climate change, the economic consequences, and the costs of abatement are set out in great detail. Whereas it is the science that has dominated headlines over the past 20 or so years, the Stern report is probably the most comprehensive review of the economics of climate change yet published. The weight it carries derives not only from its doorstep-like size, but from Sir Nicholas Stern’s eminence as an economist, gained from being both the head of the Government Economic Service in the UK and a former chief economist of the World Bank in Washington. Some commentators suggested that the author’s