Backing for UK climate change study

Rio Tinto supports the main conclusions of the UK's Stern Review on the economics of climate change, Laurel Green, Group Climate Change executive, said after attending a presentation of the findings in London.

The review by Sir Nicholas Stern, the UK Government's chief economist, was commissioned by the Chancellor of the Exchequer [minister of Finance] to build understanding of the economics of climate change. The review looked at the economic costs of the impacts of climate change, and the costs and benefits of action to reduce emissions of greenhouse gases that cause climate change.

Discussing the implications of the findings for Rio Tinto, Laurel said Rio Tinto supported the central conclusions of the review: that action was needed immediately; that it was essential that both economic growth and a reduction in global greenhouse gas emissions be achieved; and that a range of policy initiatives would be required.

She added that a price would have to be established for carbon to make trading in carbon credits feasible. There also needed to be increased investment in low carbon and high efficiency technologies. She said Rio Tinto agreed that coal would be an important part of the future global energy mix. Technologies to capture and store carbon would play an essential role in ensuring coal remained a secure and reliable energy for many economies.

While the costs of mitigation of carbon outlined in the review appeared affordable at one per cent of world gross domestic product, there would be different impacts on different countries and sectors which would have to be carefully managed. Global action would be required. International cooperation would accelerate technological innovation, reduce the costs of mitigation and make sure that the factors underlying carbon pricing would be broadly similar around the world.

Laurel said the findings of the review complemented work that Rio Tinto had conducted or participated in, particularly the work of the Group's consultant, Battelle, on the Global Energy Technology Strategy Programme.

"While the focus of Stern and Battelle are different they have in common that both are trying to achieve a global trajectory for stabilising atmospheric emissions at levels that prevent dangerous interference with the climate. They both emphasise the long term nature of the problem and the need for a range of policy and technology approaches, rather than one size fits all. Furthermore, they see that the range of policy options must complement each other."

She cautioned that while the review was a step along the path to understanding the implications of climate change and what actions should be taken, it was not a comprehensive solution.

"In particular, while the review emphasises the need for global cooperation, and suggests building bridges through emissions trading programmes and technology transfer, it is light on how this may be achieved."