Climate change places humanity at a “crossroads”, which forces us to act urgently to review “the way we organize our economies” and to focus on “investment and innovation” to avoid the “risk of a immense destruction.” Nicholas Herbert Stern – author of the first report on the economics of climate change, published in 2006 and known worldwide as the “Stern Review”, Professor of Economics and Government and director of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science and at the head of the India Observatory – indicated the path to take to “react to climate change in terms of economic and political action” in the lectio cathedrae magistralis entitled “Towards a new approach to development and growth: the economics of action on climate change”, delivered in Milan on Friday 16 December in the Aula Magna of the Catholic University of the Sacred Heart on the occasion of the awarding of the university’s honorary degree in Banking, Finance and Insurance Sciences.
An academic acknowledgment that the Faculty awarded him “for his profound knowledge as a scholar as well as the quality and relevance of his institutional activity and his commitment to a cause of the highest ethical value such as the containment of climate change and its dramatic consequences for the whole humanity and, in particular, for the populations of the poorest areas of the planet», said the principal Elena Beccalli, reading the reasons with which the faculty unanimously proposed to confer the title on the scholar. «Stern’s work represents a point of reference, from which to draw inspiration, for the University and for the Faculty due to its ability to combine the quality of scientific rigor in the analysis and ethical tension on topics of the highest value for the man and our common home”. Among the merits of his scientific activity there is precisely “having drawn attention to ethical issues connected with global warming for a long time neglected, if not omitted, by academia and institutions” contributing “in an incisive way to the change in the attitudes of scholars and governments towards policies to combat climate change», so much so that today they represent a priority element on the agenda of many governments around the world.
The rector of the Catholic University Franco Franco Rings. “The importance of this honorary degree is linked both to Professor Stern’s scientific production and to his approach to understanding, analyzing and disseminating scientific research”. According to Rector Anelli «there is a significant point of contact between the approach of Lord Stern’s work and the reflections of Pope Francis». In fact, “although different in terms of methods and purposes, the Stern Review and the Holy Father’s encyclical Laudato si’ both focus attention on the complexity of the environmental problem, suggesting that it be faced with an integral approach”. In fact, observed Rector Anelli, «only concerted action between politics and (economic) science can help to find solutions to the crises in which we are immersed. This applies not only to environmental problems, but to all areas of social life: just think of the management of the pandemic and, in many ways, also of the war in Ukraine. From this point of view, the role of universities remains crucial, especially if inspired by that “broad vision” that Pope Francis invites us to adopt not only in our research but also in daily life (Laudato si’, n. 197)» . And the «multifaceted approach» that has always guided Stern’s activity is «a model to follow for our students».
Lord Stern has not hidden his concerns about a “model of growth and development” which has so far proved to be bankruptcy and destructive for the entire planet, and to the detriment of the new generations. According to the English economist we are in a “crucial historical moment” which he calls for “acting together”, favored by a “common enemy”: climate change and the destruction of biodiversity. For this, in his opinion, a “new form of growth and development is needed, much more productive, efficient, attractive than the destructive paths of the past”. And in order to make this happen, key strategies must be identified for which it is essential “to deploy our economic, technological, political and organizational capabilities”. In short, a paradigm shift in our economic systems whose engines must be investments and innovation. “We need to invest to change our energy systems, the way we organize transport and the functioning of our cities. We need to change our land use systems, including the restoration of degraded lands and forests.” Citing a study by some colleagues at the LSE, Stern added that investments “could lead to an increase in the investment rate in richer countries of 2 or 3 percentage points of GDP” while “for emerging markets and economies it would be of the order 4 or 5 percentage points of their gross domestic product”.
Investments, therefore, made possible by “collaboration between the private and public sectors”. But which must also be accompanied by a careful economic analysis, by social responsibility and by a different use of the economic instruments available. For example, Stern specified, «we will have to review our approach to economic geography and examine the economy and the dynamics of systems change, also in cities and territories. Fortunately our younger economists are starting to look at these issues in a new way, but I fear that our profession, especially at the senior level, may be too conservative to change at the pace needed.
A substantial change of course that requires adequate leaders and clear strategies. In this sense, a strong impulse can come from the new generations. And not only. “Some of the leadership needed can be promoted by youth movements, non-governmental organizations and religious leaders. The Pope and other religious leaders have been very clear and strong. Francis, for example, said that if we destroy creation, creation will destroy us”.
Hence Stern’s appeal. “We really have a new growth story on our hands, but we need to act fast and hard to get there. Our job, as analysts and academics, is to best state the reasons for action and to engage directly, as clearly as possible, with policy makers and the general public. This can and must be the heart of our work to transform what we can do into what we will do». From this point of view, “I think that Europe, the first major region to act on the climate, can and should be a leader in this international action”.