Nicholas Stern on the UK budget
Commenting on the Budget, Professor Lord Stern of Brentford, chair of the ESRC Centre for Climate Change Economics and Policy and the Grantham Research Institute on Climate Change and the Environment at London School of Economics and Political Science, said: “Chancellors cannot resist the temptation to fiddle. Fiddling creates policy uncertainty and that in turn reduces investment including, and critically, in the energy sector by raising the cost of capital. Thus it is disappointing that the Chancellor has chosen to fiddle with the Carbon Price Floor within a year of having introduced it. The Carbon Price Floor was meant to increase confidence about the stability of the future price that would need to be paid by businesses for greenhouse gas emissions and hence encourage investment in clean energy. If the Chancellor wanted to reduce costs for businesses, he should have simplified the existing myriad of policies which have created a complicated and inconsistent system of carbon pricing across the economy. Simplification of these measures would have reduced the administrative burden on companies and increased efficiency without undermining the incentive to reduce greenhouse gas pollution. Instead today’s Budget has created more confusion for investors about the Government’s sense of direction and commitment to the transition to a low-carbon economy.”
NOTES FOR EDITORS
- Lord Stern is chair of the ESRC Centre for Climate Change Economics and Policy and the Grantham Research Institute on Climate Change and the Environment, as well as I.G. Patel Professor of Economics and Government and Director of the Asia Research Centre, at London School of Economics and Political Science. Since July 2013, Lord Stern has been President of the British Academy for the humanities and social sciences. Lord Stern was Second Permanent Secretary at HM Treasury between 2003 and 2007. He also served as Head of the Government Economic Service, head of the review of economics of climate change (the results of which were published in ‘The Economics of Climate Change: The Stern Review’ in October 2006), and director of policy and research for the Commission for Africa. His previous posts included Senior Vice-President and Chief Economist at the World Bank, and Chief Economist and Special Counsellor to the President at the European Bank for Reconstruction and Development. He was recommended as a non-party-political life peer by the UK House of Lords Appointments Commission in October 2007, and Baron Stern of Brentford was introduced in December 2007 to the House of Lords, where he sits on the independent cross-benches.
- The ESRC Centre for Climate Change Economics and Policy (http://www.cccep.ac.uk/) is hosted by the University of Leeds and the London School of Economics and Political Science. It is funded by the UK Economic and Social Research Council (http://www.esrc.ac.uk/). The Centre’s mission is to advance public and private action on climate change through rigorous, innovative research.
- The Grantham Research Institute on Climate Change and the Environment (http://www.lse.ac.uk/grantham) was launched at the London School of Economics and Political Science in October 2008. It is funded by The Grantham Foundation for the Protection of the Environment (http://www.granthamfoundation.org/).