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Financial woes tied to climate

Financial woes tied to climate

Top economist stresses need for low-carbon economy

HONG KONG - Nicholas Stern, one of the world's leading environmental economists, said Monday that the global economy will face a more severe downturn than the current crisis if it fails to halt climate change.

Stern, the author of a key climate change report and a former World Bank chief economist, said moves towards a low-carbon economy should not be stifled by the fallout from the current economic downturn.

"One thing we should have learned from this experience of the financial crisis is if we ignore risk building in the system, that risk will get much more difficult to manage than if we recognise it and tackle it early," the British economist told reporters in Hong Kong.

"We have seen the consequences of ignoring risk in the current economic and financial crisis. It has already led to negative growth in rich countries.

"The risk consequences of ignoring climate change will be very much bigger than the risk consequences of ignoring risk from the financial system."

Stern, whose 2006 report estimated the effects of climate change could cost up to a fifth of worldwide gross domestic product if no action was taken, said that countries should try to grow out of the current recession by focusing on low-carbon growth.

Stern added that failure to act could lead to a temperature rise that would have severe consequences for global stability.

"These kinds of changes will transform the physical geography of the planet," he told reporters at an event for HSBC, a bank where he is a part-time policy adviser.

"You will see movements of billions of people. The result of that will probably be extreme conflict."

Earlier, Stern addressed a group of business and political leaders at a conference organised by the Climate Group, a nongovernmental environmental group, where he stressed the opportunities for firms that adapt early to a low carbon model. AFP

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