There is no trade-off between economic growth and moving to renewable sources of energy and India can even increase its GDP growth rate to 7.5-8 per cent from 6.5 per cent currently by aggressively investing in its green transition, according to NICHOLAS STERN, the IG Patel Professor of Economics and Government at the London School of Economics. “…you still get that residual argument that somehow a developing nation will have to choose between sustainability and climate on the one hand and growth in incomes on the other. That's absolutely wrong…and it's very important we are very clear that there is no trade-off,” he said in an interview with The Indian Express. Stern also said the path India takes to becoming a developed economy by 2047 will be crucial for the world and that it needs to increase its investment-to-GDP ratio by 5 percentage points, remove impediments to investment, get the incentives right to invest in modern technologies – particularly green technologies and artificial intelligence (AI). Edited excerpts: US President Donald Trump’s focus has been on tariff policies. But he is also undoing years of progress made in the renewables sector. Is that more dangerous than the chaos the trade disruptions are causing? Trump has been disruptive in a number of directions. One, of course, is the tariffs and the structure of world trade. Another is health, where he's taking the US away from the World Health Organization (WHO) and attacking vaccinations. On security, he is backing off from the defence of Europe. Aid has been dismantled. One important way forward for the rest of the world is to stay united on these issues. If the US is undermining WTO, which it is, then try to find trade agreements between nations which look quite similar. I think it would be very good if the EU trade agreement (with India) – which I think is coming – looks like the one with the UK. I hope there'll be more trade agreements with Asia. The more they look similar, the more we're sustaining the idea that trade should be symmetric and with minimal barriers because we all benefit from that. In many ways, climate is similar (to health and trade) – we have the international fora where we can find agreements and carry on. At the same time, the cost of solar and batteries has fallen dramatically. If we compare with 1975, it’s not that it has fallen by a factor of 100 – it’s fallen by a factor close to 1,000, which is extraordinary. It is unambiguously the cheapest form of electricity generation. On the climate side, the forces of change are strong. But we are going nowhere near fast enough. We are probably heading, given current policies, to something like 2.5-3°C (rise in temperatures); we're already at about 1.4°C. When I wrote The Stern Review 20 years ago, we had access to the third assessment report (AR3) of the IPCC (Intergovernmental Panel on Climate Change), which was published in 2001. In 2001, the proximity to the tipping-points looked to be increasing very strongly above 4°C. So, as you got to 4°C and above 4°C, these tipping points could really kick in. Now, we think those tipping points could kick in at about 2°C (higher temperatures). And we are not far from 2°C; quite likely, we will be there within two or three decades. Some of the tipping points may be between 1.5°C and 2°C. An example of a tipping point is loss of ice sheets. The thawing of sea ice is a longer process to raise sea levels. But when land-based ice goes in, then sea levels rise quickly. And we're heading for 2.5-3°C on current policy. The last time we were there, sea levels were 15-20 metres higher than now. We'll probably lose most of the corals around 2°C and that will have a profound effect on fisheries. The Atlantic Meridional Overturning Circulation – which takes warm water north and then drops down and comes back as cold – could be in danger of changing. If that changes, it will have effects across the world. For example, it would be very difficult to grow maize and wheat in most of India. How important are the next 20 years? What we've learnt in the last 20 years is that the science is ever more worrying and that the imperative for speed goes up. So, the fact we're changing is good. But the next 20 years are enormously important. And if you think of the infrastructure India will have in 2047, well over half of that will be built between now and then. What's that infrastructure going to look like? If it looks like the old one, India and the world are in deep trouble. If India grows to be a developed nation by 2047, its economy will be a huge part of the world economy, and thus India’s emissions will be, potentially, a huge part of the world's emissions. So, in the past we could have said India’s per capita emissions have been very low. But could we say that 20 years from now? I hope so. And it's quite possible because India understands the issues very well. There is no horse race between climate action, biodiversity action and growth. In fact, the kinds of investments we're talking about – clean, productive, efficient infrastructure like metros – is about development and getting clean, strong, efficient, and reliable infrastructure. This is a growth story and one that can last not 5-10 years, but the 21st century. This is very important because you still get that residual argument that somehow a developing nation will have to choose between sustainability and climate on the one hand and growth in incomes on the other. That's absolutely wrong…and it's very important we are very clear that there is no trade-off. There are big choices; this new path is not necessarily easy. You have to invest a lot. We are talking about raising India's investments as a share of GDP by a full 5 percentage points. And India can do that – it was 4-5 percentage points higher not so very long ago. You wrote a letter to the UK Prime Minister a few months ago, on there being no trade-off between climate action and growth. India has said it does not want the climate transition to undermine its growth aspirations. Neither do I! The point is that it doesn't. Making those investments will drive India's growth. Having good metros and an efficient energy system available to everybody at low cost will drive growth. Electric vehicles are better than the Internal Combustion Engine. This is a story of greater efficiency and better infrastructure. The use of AI, where India is very strong, can accelerate those processes. You can say we don't want to trade climate off for growth. But the next sentence should be we don't have to. There is a hesitancy from India to shutter its fossil fuel infrastructure as quickly as some might want. There's a question about energy security. Well, you have to build the new (infrastructure) very quickly; you don't shut down the old until you've built the new. But you can build new (infrastructure) very quickly. And India is actually moving very fast on renewables. Renewables give you more security. India spends around 5 per cent of its GDP on oil and gas imports. That’s energy insecurity. If you want energy security, use what's for free – the sunshine, the wind. And India's dependence on imported oil and gas has been a problem, both in terms of cost and security. The cost of coal-fired (power) generation – round-the-clock solar can compete with coal, particularly if you count the damage that coal does. A lot of air pollution comes from combustion engines and coal, and you are killing people and stunting the growth of children through the use of coal. That's a cost by anybody’s calculation. So, what we're talking about is a cheaper, better way of doing this. That means better growth. Do you think India can move faster in the shift to renewables? Yes, I do. But India can move faster on growth as a whole. India can increase its growth rate from around 6.5 per cent now to close to 7.5-8 per cent. It really can. The immediate forces will be investment and the efficiency of investment. India does need to invest more, maybe 5 percentage points of GDP extra… A big part of that will be investment in clean and efficient infrastructure like metros and electricity generation. India will probably need five times the capacity it has now of electricity by mid-century. This is a story where you can see how India can raise its growth rate and make it a very different kind of growth. But you've got to invest to get there and you've got to remove the impediments to investment and get the incentives right to invest in the technologies of the 21st century, particularly green technologies and AI. China has been a driving force in pulling down prices of renewables, particularly solar, over the years. Should the world then be worried about its 'anti-involution campaign', with investments in sectors such as batteries being reduced to ensure capacities don’t keep rising and prices don’t fall further? China can produce solar panels with less than 10 cents a watt now. It has a very big capacity and the rest of the world is hungry for energy. What does rational economics tell you? Africa should be helped to invest very strongly in solar power; probably more than half the world's solar potential is in Africa. China has cheap solar panels. What does economics tell you: do lots of solar in Africa. It is good for Africa and good for the world. I don't see any security issues associated with solar panels in Africa. At the same time, it's very important that the capacity to produce solar is built in other countries, particularly in India. It will take time, but I think India would be able to do that. What's needed for this story is people who can invest, and savings. Well, India has people who could invest and it has savings. It needs good scientists and technologies. India does produce those; maybe some of those who have left will come back. India has sunshine. So, if you think of what's necessary – entrepreneurship, ability to invest, the right kind of skills – India is in quite a good position. Of course, India needs to invest more in its engineers and so on. It's not necessarily that easy to increase investment. But we know it can be done because it has been done. India can get these two things together – that it can have a growth rate of 7.5-8 per cent and drive to Viksit Bharat and it can do that in a way that gives clean cities, clean environment, reduces emissions, and gives the people of India a future… If you get to the middle of the century on high-carbon growth – and the world has followed a high-carbon growth – the future for India's children in 2050 will look very bleak. It'll be very dangerous and this isn't scaremongering; this is quite a rational assessment of what could happen if we were moving towards 3°C or so. It is deeply dangerous, anti-science, and reckless to act as if, “Oh well, if we get and it's 3°C (higher), it might be a bit more difficult”. Big parts of the Indo-Gangetic plains will be over 53°C several times a year. That kills people. Maybe 75 per cent of the snow and ice on the Himalayas will go at 3°C – that means uncontrollable torrents in your rainy season and empty rivers. These are things which will reverse development. The rich countries have a responsibility – a major responsibility – to help with that investment story and with NK Singh and Larry Summers, we emphasised the importance of the multilateral lending institutions helping in that investment.
