Stern, head of the UK climate change review and former World Bank chief economist, confirmed to the policy community that action on climate change is urgent in order to avoid large scale climatic disasters with overwhelming economic consequences and that the costs of economic action now are a speck to the scale of costs incurred by turning a blind eye to the problem.

The report has been eagerly anticipated and sent waves through the policy community, who largely welcomed the strong message it sent and hope it will push the US towards signing a post Kyoto agreement on climate change. Indeed the timing of the report could not have been better, co-inciding with the start of the UN conference on climate change in Nairobi to work out post Kyoto policy. The Stern Report is already reverberating among the Nairobi delegates, and should increase the chances of reaching consensus to long term climate change action.

On the launch of the report on the 30 October, UK chancellor Gordon Brown called for the EU to strive for a 30% cut in greenhouse gas emissions by 2020, the top end of the Council’s aspirational range, and 60% by 2050.

The report’s policy recommendations circle largely around extending the emissions trading scheme, long and medium-term goals and an international framework for action, but also make a strong case for policy support for low carbon technologies and energy efficiency improvements.

EWEA recognizes that the emissions trading scheme has a major role to play in cutting emissions of existing operations, although the first two years have seen it largely fail in that role due to over allocation of free emission permits. It does urge supportive recognition of the fact that in the long term energy supply has to come from clean sources, and the shift needs to occur as soon as possible.

EC President Jose Barroso said that he welcomed as an important contribution the report issued by Sir Nicholas Stern in developing our understanding of the costs and benefits involved in meeting the climate change challenge, and reinforced that “the EU has and will continue to take a lead in the fight against climate change.”

The EU is conducting a Strategic Energy Review, which will provide a vision of how Europe’s energy mix needs to evolve. It will also address the market distortions in the internal electricity and gas markets.