Leading economist Lord Nicholas Stern has the world economy could "self destruct" if we don't stop doing this

Francesca Washtell
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A new report has warned sustainable infrastructure will not cost much more than a "business as usual" approach (Source: Getty)

Leading economist and climate change researcher Lord Nicholas Stern has said the global economy could "self destruct" if humans do not stop using fossil fuels.

However, Stern added that "strong investment" in green, renewable technologies could revive world growth.

The professor and author of the watershed Stern Review on the economic effects of climate change issued the warning at an event last night ahead of the launch of a new report from the Global Commission on the Economy and Climate, the Independent reported.

The report calls on governments and global institutions to transform the financial system to "deliver sustainable infrastructure and reignite growth".

Read more: Lord Stern delivers stark warning to Mark Carney's climate task force

It estimates investments totaling $90 trillion (£71 trillion) will be needed in infrastructure over the next 15 years, even if we continue under "business-as-usual" development that does not focus on sustainability.

But altering infrastructure investment to ensure new infrastructure schemes "deliver a low-carbon economy consistent with the climate goals agreed in Paris" need not "cost much more".

Four key action areas to finance sustainable infrastructure were identified by the report, which are to tackle price distortions through ending fossil fuel subsidies by 2025; strenthen policy frameworks to ensure governments can select the right projects in the first place; transform the financial systems through new tools such as green bonds and to ramp up investment in "clean" technologies.

Read more: Lord Stern warns UK emissions targets must be strengthened

"The next couple of decades, and particularly the next two or three years, will be critical to the future of sustainable development," said Lord Stern.

We can and should invest in and build cities where we can move and breathe and be productive, while protecting the natural world that underpins our livelihoods. We cannot continue with 'business as usual' which will lock in high-carbon infrastructure and create further congestion and pollution, while choking off development opportunities, particularly for poor people.

This will require not only better policies but also a sea change in the financial system itself to make it fit for purpose for the scale and quality of investment we now need. The development banks, both national and international, should be at the centre of this: the growth story of the future.

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