Sir Nicholas Stern, the UK economist that prepared a landmark 2006 study on the economics of cutting greenhouse gases, told US congressional staff on September 21 that the United States, EU countries and other industrialized nations should agree this year to cut emissions 75% below 1990 levels by 2050.

Stern gave limited attention to the details of carbon markets.

But he said a global price on carbon was needed to correct "the biggest market failure we've ever seen," but he was reluctant to endorse a cap-and-trade regime over a carbon tax. He said both approaches have "strengths and weaknesses."

Noting that Congress appears to be leaning toward a cap-and-trade approach, Stern rebutted critics of allowance price volatility by saying that a direct tax on carbon could result in volatility of emissions. He said cap-and-trade programs with auctioning of allowances would guarantee GHG cuts and move the approach closer to a direct tax.

Speaking at a briefing held by the Energy and Environmental Studies Institute, said "the rich [countries] should take the bulk of the responsibility for financing the change" to a low-carbon economy for the world. Globally, nations should commit to a 50% reduction by 2050, he said.

Stern's talk was intended to inform congressional staff and their bosses in advance of the UN-sponsored climate change negotiations that will take place December 3-14 in Bali, Indonesia. US experts expect a large contingent from Congress to attend the meeting, known as the Conference of the Parties to the Kyoto Protocol. Part of what will be discussed there is what climate change framework should replace the Kyoto Protocol, which expires with the December 31, 2012 compliance deadline.

Stern said that a 50% cut in emissions from all countries should help stabilize GHG concentrations at around 500 parts per million. His view is consistent with the position that EU negotiators are bringing to a US climate change summit next week on GHG reduction goals. A European position paper circulated this week said delegates welcome the US summit and they hope to use " this initiative to build an agreement on a global goal for emissions reductions, which the EU considers should be at least 50% below 1990 levels by 2050."

Many scientists have said stabilizing GHG concentrations in the atmosphere between 450 and 550 ppm is needed to avoid "dangerous human interference" with the earth's climate. Current concentrations are at about 430 ppm and increasing 2 ppm each year, Stern said.

The "Stern Review," as his report was called, concluded that cutting emissions to the levels he is advocating would cost the world about 1% GDP per year. Stern noted that the International Energy Agency and the Intergovernmental Panel on Climate Change later concluded that the costs would likely be less than he forecast.

"I'm not pretending it's easy, but it is equally a small cost compared to the damages" from climate change.

He said the "global deal" is in the interests of all nations because many low-lying, valuable areas including Miami and Calcutta are at risk for sea level rise. Cities such as New Orleans and Bombay are vulnerable to more frequent and intense hurricanes linked to climate change.

"All we need to do to drive policy is to recognize the magnitude to those risks," Stern said.

And he rejected the ideas that major economies with the fastest growing emissions are not doing anything to deal with carbon.

"China is reforesting, not deforesting," he said. Deforestation accounts for about one-fourth of global GHGs annually. "It has placed export taxes on energy-intensive industries. You can't sell a car in China that doesn't meet the country's emissions standards," which are more stringent than US ones, Stern said.

Still more must be done soon because the "ratchet effect" of emitting GHGs that will stay in the atmosphere and affect the climate for 100 years will make "it impossible to back off" from dramatically rising seas, storms and droughts.

"We don't have a massive vacuum cleaner to suck CO2 out of the atmosphere although I hope we find one," Stern said. "The point is, the actions we take now will determine whether we're able to stabilize at or below 550 [ppm]."