Shaping global climate change policy

The Grantham Research Institute has been one of the most influential research powerhouses on global climate change. Their consistently compelling analyses of the economics of climate change have shifted the debate on decarbonisation from burden to opportunity and growth.

What is the problem?

For governments, global institutions, and firms to meet the challenge of man-made climate change, high-quality, cross-disciplinary research is essential. It can increase understanding of the impacts of climate change and inform policies designed to transform the economy into a zero carbon one in ways that promote global well-being.

Interdisciplinary work can promote better informed decision-making about climate change by engaging with a wide range of audiences and policymakers. Without work that highlights the opportunities of climate action, and how individual countries and institutions can act effectively, the adoption and implementation of crucial global agreements for international climate action becomes much more difficult.

What did we do?

LSE’s Grantham Research Institute provides a unique environment for interdisciplinary, impact-oriented research intended to shape the global climate debate. The Institute’s research combines disciplinary rigour with a diversity of analytical perspectives, including economics, finance, geography, law, political science, and international development. Through multiple research strands, the Institute’s academics address the impacts of climate change and legislative and economic responses, in several areas of expertise.

Central to the Institute’s work is research on the economic impacts of climate action and the opportunities of sustainable growth. The Institute’s academics have developed a rigorous analytical framework to demonstrate that good climate policy does not entail economic harm. Publications such as Why Are We Waiting? The Logic, Urgency, and Promise of Tackling Climate Change (2015; MIT Press) by Chair of the Grantham Institute, Professor Nicholas Stern, detail how, by avoiding the negative impacts of climate change and designing climate policies that catalyse clean innovation, we can deliver a range of societal co-benefits, such as reduced illness and mortality from air pollution.

International commitments to climate finance are a key aspect of global agreements to address climate change and integral to the 2015 Paris Agreement. The Institute’s work on climate finance has highlighted the importance of infrastructure investment and explores new mechanisms through which multilateral development banks could scale up low-carbon finance, including by helping to leverage private investments.

The Institute’s researchers are also engaged in assessing the global momentum in national climate action, including tracking and analysing country-by-country climate legislation and policies. To this end, it has created the Climate Change Laws of the World (CCLW) project, an open-access database of information about climate change laws and executive acts in 196 countries, and climate court cases in 35 countries. Using these data, they have analysed the conditions for climate policy success in different socio-economic and political contexts. A 2018 study (Averchenkova, Fankhauser & Finnegan) of the UK Climate Change Act 2008, which is considered world-leading, helped to identify the impacts and core elements of an effective climate law. These include: clear long-term targets, rolling short-term targets, agreed duties and statutory timelines, and close scrutiny through an independent expert body. Other studies have provided evidence of climate action in different contexts, identifying challenges and ways to advance national policies.

What happened?

In the past decade, LSE’s Grantham Research Institute has been influential across a wide range of global efforts to act against climate change. This impact has been particularly felt in three important areas: creating a new, evidence-based narrative on climate action and sustainable economic growth; advancing the understanding of climate finance and investment in infrastructure; and assessing and highlighting best-practice climate change legislation across the world and advising governments, including in the UK.

In the first area, Professor Lord Stern has used his global leadership roles to communicate the benefits of sustainable growth, for example through the Global Commission on the Economy and Climate. Co-chaired by Stern, the Commission’s first report, "Better Growth, Better Climate", was launched at the United Nations (UN) in September 2014, at an event attended by world leaders and by the UN Secretary-General. Institutions such as the Organisation for Economic Cooperation and Development (OECD), the World Bank, and the European Commission also make extensive use of the Institute’s research on sustainable growth.

The Institute’s thinking on sustainable growth and long-term infrastructure investments has been taken up by financial institutions, particularly multilevel development banks, including the Asian Infrastructure Investment Bank (AIIB), Inter-American Development Bank (IADB), and New Development Bank (NDB), which is advised by Stern. The Institute’s work has influenced their investment guidance so that, instead of locking in unsustainable carbon emissions, they should finance sustainable, low-carbon infrastructure. Together these banks invest billions in sustainable infrastructure and related projects, particularly in the developing world.

The Institute’s research on national climate policies and laws offers powerful tools for legislators and policymakers to learn from international experiences on how to design effective governance systems to meet climate goals. Researchers from the Institute have advised numerous governments and parliaments in climate policy formulation, with Dr Alina Averchenkova providing expert advice in more than 10 countries in Europe, Asia, and Latin America and the Caribbean, and advising on a climate law for the European Union. Averchenkova and Professor Sam Fankhauser also advised on New Zealand’s Paris-aligned "net zero" carbon law, passed in November 2019.

In the UK, academics from the Institute engage regularly and substantively with government policymaking, working with relevant departments, and the Committee on Climate Change (the UK government’s statutory advisor on climate change), of which Fankhauser was a member from 2008 to 2016. Fankhauser and Dr Swenja Surminski were directly involved in the planning and execution of the government’s 2017 Climate Change Risk Assessment (CCRA2), and its 2021 report (CCRA3), which inform the government’s approach to adaptation planning over the following five years.

Through these channels, the Institute’s research has had a tangible impact on UK climate policy, helping to locate UK action in the international context and assuage concerns about its effect on competitiveness. As the Chair of the Committee on Climate Change, Rt Hon. John Gummer, Lord Deben, noted:

"The quality of its work and its intellectual capacity has helped our thinking in some of the most complex areas that we cover. Its name has always been a guarantee of rigour and objectivity."