We cannot ignore the existing global climate crisis. Decisive action on sustainability goes beyond preventing environmental catastrophe – it also requires years of innovation, economic growth and shared prosperity.
Often, policies intended to achieve net zero and strengthen climate resilience are framed as obligations: measures we must take rather than opportunities we might embrace. But what if climate action could increase productivity, accelerate innovation and create a more prosperous future? What if it proved not a burden on economies, but a powerful driver of long-term growth and opportunity?
This is the core theme of The Growth Story of the 21st Century: the economics and opportunity of climate action (LSE Press), a new book by Professor Lord Nicholas Stern, IG Patel Professor of Economics and Government and Chair of both the Grantham Research Institute on Climate Change and the Environment and the Global School of Sustainability at LSE. Stern argues that the world now has a rare chance to shape a new model of growth — one that works for both developed and developing economies.
Tougher science, smarter technology
When The Stern Review was published in 2006, it redefined climate change as not only an environmental threat but an economic one. While some critics dismissed the warnings, two decades on, that scepticism has largely faded as the science has grown more critical.
Stern notes that each assessment from the IPCC portrayed a more concerning picture than the last. Risks once associated with a four-degree rise in global temperatures now appear possible at closer to two or 2.5 degrees. In short, climate change is advancing faster and proving more dangerous than many previously believed.
Yet, alongside these warnings, technological advancements have accelerated. Progression in clean energy, infrastructure, and digital innovation has created new tools for addressing the crisis. Stern argues that this combination, worsening science but rapidly improving technology, positions us at a pivotal moment. With the right decisions and investments, the coming years could deliver both environmental progress and economic transformation.
The decisive decades ahead
The next twenty years will be critical. Meaningful change will require large-scale investment in clean technologies, resilient infrastructure and new systems of production.
Stern challenges the idea that climate action is primarily a cost. Instead, he emphasises it as an investment, one capable of driving growth for decades to come. By prioritising mitigation and adaptation, societies can avoid the biggest challenges while managing those impacts that are already unavoidable.
The scale of opportunity is particularly clear in rapidly emerging economies. Much of the infrastructure that countries, like India, will rely on by mid-century has yet to be built. If that development follows the carbon-intensive patterns of the past, global climate targets will become increasingly unattainable. But if designed in a cleaner, more efficient and more resilient way, it could reshape the trajectory of global growth.
Financing the transition
For some, the idea of large-scale investment during periods of economic uncertainty may seem unrealistic. Stern takes the opposite view: this is precisely the moment to invest in future technologies and systems.
Such investments, he argues, can deliver significant returns, from cheaper and more reliable energy to healthier cities, improved transport, better air quality and more efficient use of resources. Public investment, particularly in infrastructure, can also unlock substantial private capital.
Governments, development banks and financial institutions will play a crucial role. By sharing risk, strengthening investment environments and reducing the cost of capital, they can mobilise the scale of funding needed to accelerate the transition.
Leadership and global responsibility
While climate action requires international cooperation, Stern emphasises the importance of national leadership, particularly from countries with significant economic and political influence. The UK, for example, has historically been seen as a leader through measures such as the Climate Change Act and its commitment to net zero. Retreating from that position, he warns, could signal hesitation to other nations at a time when momentum is essential.
At the same time, wealthier countries carry a particular responsibility. Their historic emissions have contributed significantly to the current crisis, and supporting developing economies in building cleaner infrastructure is both a moral obligation and a practical necessity.
Emerging markets, especially across parts of Asia and Africa, have the chance to bypass the high-pollution stages of development that characterised earlier industrialisation. With the right support, they can adopt cleaner systems from the outset — reshaping global growth patterns in the process.
A shared path forward
Climate change is ultimately a global challenge. Emissions released anywhere affect the planet everywhere. That reality underscores the need for collective action, sustained commitment and long-term thinking.
Stern argues that the coming decades could mark the beginning of a new era, one defined not only by climate recovery but by economic renewal. If governments, institutions and businesses act decisively now, climate action could become the defining growth story of the 21st century: a transformation that protects the planet while expanding opportunity and prosperity worldwide.