Governments across the world must commit to hundreds of billions of pounds in green investments within months in a combined attack on the global economic crisis and global warming, according to leading economists including Nicholas Stern.
The team says some $400bn (£277bn) should be channelled to support low-carbon technologies such as home insulation and renewable energy. Given the urgency of both the economic and climate crises, it wants the green investment made by this summer and to total 20% of the £1.4tn likely to be spent globally as fiscal stimulus.
Lord Stern, the former Treasury economist and now chair of the Grantham Research Institute on Climate Change and the Environment, said: "With billions about to be spent by governments on energy, buildings and transport, it is vital that these public investments do not lock us for many more decades into a costly and unsustainable high-carbon economy."
A report published today, written by many of the team that prepared the influential 2006 Stern Review on the economics of climate change, says politicians should not delay plans to cut greenhouse gas emissions because of the global slowdown. Instead, action to tackle climate change could form a central part of fiscal packages to stimulate national economies.
Lord Stern said: "The rich industrialised countries need to show leadership this year by committing to reduce their greenhouse gas emissions by at least 80% by 2050, compared with 1990, and their economic recovery plans need to be consistent with this target."
The report assesses the likely success of investment in a variety of green policies. It says the most effective of these could be energy efficiency measures for homes and public buildlings, boiler replacement programmes, efforts to fit cleaner appliances and lights, and a switch to renewable sources of heat, such as biomass. It also calls for greater investment in energy research and development, streamlined planning to promote renewable energy projects such as wind farms, and moves to encourage less polluting vehicles by adjusting car tax bands. One of the most cost-effective measures to reduce emissions, it says, is to encourage simple checks on tyre pressure. A green stimulus could provide a boost to the economy, increase the demand for labour and build the foundations for strong, sustainable growth in the future, the report says.
Alex Bowen of the Grantham Institute and formerly of the Bank of England, who is lead author on the report, said: "Our assessment shows that $400bn spent globally in the next 18 months on green policies and investments, such as smarter use of electricity, will help us to deal with current economic crisis, create jobs and help tackle climate change."
The report said action on cutting emissions remained urgent and putting off cuts would increase the risks of global warming. But convincing people of the importance of a comprehensive framework to cut emissions could unleash a "wave of creativity and innovation in greening the economy" and a better foundation for economic growth than the dot.com boom or the housing bubble.
Dimitri Zenghelis, a senior visiting fellow at the Grantham Institute who helped write the report, said: "It is clear that green investments are not luxury items that should be put off until after the current economic crisis is over. Our assessment shows that many of these measures fit the criteria for stimulating recovery, and we hope that governments will judge their merits in the same way that we have."
A call for a "green new deal" will also made this evening by Lord Chris Smith, the chairman of the government's environmental watchdog, the Environment Agency. In his first major speech, he will say national politics in the UK had "lost the ability to be bold" but that a moment of crisis was precisely the time for action.
He will add: "2009 could, I believe, be the year when we radically change some of our economic and social habits, and make a historic shift towards a more sustainable pattern of human activity."
He will also call for all electricity to be generated carbon-free by 2030, including by building a new generation of nuclear plants, and say it was a "tragedy" that the UK had to date failed to seize the business opportunities offered by wind and solar power. He will also say the UK should become a world leader in carbon capture and storage technology, which allows the burial of carbon dioxide from fossil fuel power stations.
Further support for a green new deal is expected on Monday in a new report from the United Nations Environment Programme.