LSE: Public Lectures and Events

Episode: The Growth Story of the 21st Century: The Economics and Opportunity of Climate Action
Date: November 5, 2025
Host: London School of Economics and Political Science
Speakers: Professor Lord Nicholas Stern, Professor Nicola Ranger, Dimitri Zengelis
Moderator: Susana Moratto

Overview

This episode marks the official launch of Professor Lord Nicholas Stern’s book, The Growth Story of the 21st Century: The Economics and Opportunity of Climate Action. The event, held at LSE, brings together leading climate economists and policy experts to reframe climate action as the foundational growth and development story of the coming decades. The discussion challenges outdated trade-offs between economic growth and climate mitigation, emphasizing the unique opportunity to create a cleaner, more resilient, and inclusive global economy. The panel explores progress made since the landmark Stern Review, new paradigms in policy and economics, the role of innovation, the necessity of strategic investment (especially in emerging economies), and how to communicate the urgency and opportunity of climate action in a polarized world.

Key Discussion Points & Insights

1. Setting the Stage: Why This Book, Why Now?

Susana Moratto [00:19–04:27]

• The world is at a pivotal moment: decisions in the 2020s on energy, infrastructure, finance, and nature will define prosperity and stability for generations.
• Purpose of the book: To replace the outdated notion of a trade-off between growth and climate, proposing instead that net zero is an economic opportunity.
• The "new growth paradigm" should be clean, inclusive, resilient, and achievable through purposeful action.
• Book aims to provide not just diagnosis but a detailed plan: scaling technology, reforming finance, reshaping cities, and calling for political courage.
• Quote:

  “Nick Stern challenges the outdated notion that we must choose between economic growth and climate action. He shows that the transition to net zero is not just necessary, it's the opportunity of our time.” [B, 00:54]

2. Professor Nicholas Stern: The Heart of the Growth Story

Professor Lord Nicholas Stern [04:27–43:19]

a. The Evolution Since the Stern Review

• 20 years since the Stern Review; the situation now is more urgent, but also more hopeful in terms of opportunities.
• “This is not growth forever of the past—it’s about breaking the link between economic activity and destructive relationship with the environment.” [C, 06:30]

b. Science and Ethics of Climate Change

• Climate science looks increasingly severe: tipping points are happening sooner (1.5–2°C rather than 3–5°C); urgent action is critical.
• The “right to development”—climate action and sustainable development are inseparable.
• Social capital is intimately connected to our ability to act collectively.
• Quote:

  “Climate action. Climate investment is part of investment for the Sustainable Development Goals. Don't let anybody get away with the idea that somehow there's climate on the one hand and development on the other. That is just a fundamental analytical mistake with huge political consequences.” [C, 13:16]

c. Moving Beyond Cost: Investment, Structure, and Policy

• Debate has shifted from “should we act?” to “how do we act, and how do we finance it?”
• Major investment is needed, particularly in emerging and developing economies, to facilitate both a clean transition and growth.
• The next three decades see a doubling of global building stock, GDP, and urban population—mostly in the Global South.
• “This is not a horse race between cutting emissions and adapting. We have to do both, and much of sustainable development means doing both.” [C, 21:18]

d. Key Drivers for a Growth-Oriented Transition

1. Clean is cheaper than dirty—falling renewable and battery costs.
2. Resource and energy efficiency.
3. Improved health—vast mortality/morbidity reduction from less air pollution.
4. Investment as a growth multiplier.
5. System productivity—cities designed for mobility and clean air.
6. Technological and institutional innovation, especially through AI.

• On tipping points:

  “There are ‘tipping points’ of the good kind as well—the moment when clean becomes cheaper, more attractive, more accessible.” [C, 32:18]

e. Global Geopolitics and Leadership

• China’s lead in clean tech will define the “industrial revolution” of this century.
• Future leadership is open—EU, India, Africa have huge opportunities if supported.
• The 15th Chinese Five-Year Plan (2026–2030) will be climactically critical, but Africa can “leapfrog” with strategic investment.

f. Policy & Market Failures—Active State Required

• Carbon pricing is not enough: investment, coordinated policy, standards, R&D, and addressing capital market imperfections are all required.
• The private sector is key, but the state must set signals and the framework.
• Quote:

  “We need an active state... this isn't a 1990s market fundamentalism story where you balance the budget, do your best with prices, and let investment fall where it may.” [C, 38:40]

g. International Trust & Opportunity

• Trust, undermined by failures in development finance, vaccine equity, etc., must be rebuilt, especially between the rich world and emerging markets.

• Optimism for what is possible is high, but for what will be done, more work is needed—academics and communicators play a key role in bridging this gap.

• Closing message:

  “I'm enormously optimistic about what we can do...but am I optimistic about what we will do? Not really, but that's our job...to show it can be done.” [C, 42:35]

3. Panel Responses

a. Professor Nicola Ranger: Lessons from 20 Years, the Centrality of Nature

[43:50–50:20]

• Used AI (ChatGPT) to compare the 2005 Stern Review with the 2025 book:
  • Focus has shifted from just “prices and markets” to “institutions, policies, and wider market failures.”
  • Transition from mitigation-centric to opportunity/growth-centric language.
  • Mentions of “nature/biodiversity” have increased by 2,700%—evolution to include natural capital at the core.
• Three key messages from the new book:
  1. Shocks: The transition is not smooth—crises and setbacks are to be expected; resilience and adaptability are required.
  2. Nature capital: It’s not a cost but a productive asset, “too big to fail.”
  3. Role of developing countries: Shift from “aid recipients” to “growth engines” rich in capital, minerals, and people; global collaboration is now essential.
• Notable moment:

  “Natural capital is key infrastructure powering our growth and innovation in our economy. It's also too big to fail.” [D, 47:48]

b. Dimitri Zengelis: The Dynamics of Change & the Inevitability of Net Zero

[50:31–59:20]

• Opening poll: Who believes the world won’t reach net zero? “You're all wrong... it's a matter of physics: net zero is non-negotiable; the question is when and how painfully.”
• Costs of key technologies have dropped much faster than any expert predicted; change is unexpectedly rapid.
• Falling costs → greater deployment → further falling costs—a feedback loop reinforcing rapid change.
• Quote:

  “If you put a microphone in front of a speaker, you get rapid and unexpected change—and that's exactly what we are seeing with alternative technologies.” [E, 52:44]

• Fossil fuel costs have been stagnant compared to 99.9% cost drops in solar PV.
• Investment is needed: especially in grids—returns outweigh costs.
• The problem is less economic/technological, more political, institutional, and about strategic leadership.
• Quote:

  “If we spend less time trying to fruitlessly forecast the future, and more time trying to steer and design and build that future, then we’re in a strong position to deliver an economy that's cleaner, quieter, safer, more secure, innovative and productive.” [E, 58:10]

Notable Audience Q&A

[59:20–86:22]

On Political Challenges and Communication

Q (Policymaker “Flo,” Nick Gowing):

• How do we act in a worsening political environment?
• Is the UK Labour government doing enough for clean tech?
• How can we counter a “war” of misinformation and lukewarmism?

Lord Stern:
“We at universities have a duty to really kick the arguments, create the arguments, test the arguments... You can't beat irrationality with rationality all the time, but you can try. We must work with great communicators. Part of the story is spending time exposing the rubbish and who it's coming from.” [C, 62:19]

• Need for narrative consistency, simple messages, and trusted messengers.
• Bring down the cost of electricity before next election; current energy pricing masks the true cost advantage of renewables.
• Is Labour doing enough? “No. Could they? Yes, they could.” [C, 68:43]

Dimitri Zengelis:

• Narratives matter; self-fulfilling prophecies (if believed) can stall progress.
• Focus communication on two things: risks (climate danger) and opportunities (growth, jobs, local benefits)—not just on burdens.

Nicola Ranger:

• Avoid a “war footing” narrative—stay positive, focus messages on what people care about (health, prosperity, connection to nature), and translate economic arguments for broader audiences.

On Development, Investment, & Priorities

Q (Online; Ashfaq Kalfan, Niti Sabnani):

• How do you respond to Bill Gates’ argument (“focus on improving lives, not on temperature”)?
• How to prioritize investment to accelerate climate action?

Stern:

• Gates underestimates how climate destruction undermines all development goals—if climate action is not prioritized now, all other improvements will be undone.

  “If we destroy now or don't move fast enough, we will undermine everything else.” [C, 75:00]

Dimitri Zengelis:

• Development and climate action are inseparable; this is not a technological but a political and institutional challenge.
• Strategic leadership and example-setting, as in China, will drive returns from the clean transition; Africa could leapfrog in cheap renewable energy.

On Policy for Fossil Fuels, Nature, and Holistic Solutions

Q (Ken Penton, Fatima):

• Role of policy/regulation on fossil fuel supply; how to prevent decarbonization undermining social/nature outcomes? What incentives are needed for a true “triple planetary crisis” approach?

Stern:

• Policy must address both supply and demand via pricing, standards (preferable to the word “regulation”), and direct investment, especially in infrastructure (grids).
• Labour and job opportunities are higher in the new (clean) sectors than the old.

  “We have discovered far more fossil fuels already than we could possibly burn for any serious climate and biodiversity targets.” [C, 82:02]

Nicola Ranger:

• Need for holistic thinking—not just climate but sustainability across all planetary boundaries; avoid single-issue tunnel vision.
• Development banks must now focus on nature markets/public goods as they did for carbon markets a generation ago.

Dimitri Zengelis:

• Better measurement and management of natural capital (via national “wealth accounts”) is essential to make the unseen visible and manageable.

Notable Quotes and Timestamps

• On integration of climate with development:

  “Don’t let anybody get away with the idea that somehow there’s climate on one hand and development on the other. That is just a fundamental analytical mistake with huge political consequences.” - Nicholas Stern [13:16]

• On future optimism:

  “I'm enormously optimistic about what we can do... am I optimistic about what we will do? Not really, but that's our job.” - Nicholas Stern [42:35]

• On technology and costs:

  “If I told you 10 years ago that costs of solar PV and battery technologies would fall 80 or 90%, you would see me escorted out by security. No authoritative body predicted that would happen. And yet it has.” - Dimitri Zengelis [53:46]

• On public communication:

  “We at universities have a duty to really kick the arguments, create the arguments, test the arguments.... You can’t beat irrationality with rationality all the time, but you can try.” - Nicholas Stern [62:19]

• On opportunity for emerging economies:

  “These [developing] countries will be engines of growth…rich in natural capital, critical minerals, and people. How do we work globally in cooperation to drive progress?” - Nicola Ranger [48:45]

Key Timestamps (MM:SS)

• 00:19 – Context setting, introduction of speakers and book
• 04:27 – Stern begins: the heart of his thesis, “growth story”
• 10:50 – Science, ethics, and the “right to development”
• 22:00 – Growth, investment, and breaking old trade-offs
• 29:20 – System productivity, cities, and technological change
• 31:45 – Geopolitical leadership (China, Africa, India)
• 38:40 – The need for an active state, policy over market fundamentalism
• 42:35 – Stern’s closing remarks: optimism, trust, the role of academia
• 43:50 – Nicola Ranger: shift in climate economics, centrality of nature
• 50:31 – Dimitri Zengelis: inevitability of net zero, tech cost collapse
• 59:20 – Q&A begins: actions in polarised environment, communication, UK Labour’s role, misinformation
• 75:00 – Panelists on Bill Gates’ memo, development vs. climate action
• 80:48 – Policy/regulatory incentives on fossil fuel supply and nature

Tone and Final Thoughts

The speakers balance technical economic insight with accessible, real-world relevance and optimism about the scale of the opportunity for global transformation. They emphasize active leadership, the indivisibility of climate and development, and the critical role of inclusive, positive public communication. The conversation is future-oriented, urging policymakers, business, academics, and civil society to recognize the climate transition not as an unavoidable cost, but as the chief pathway to economic renewal and global equity in the 21st century.