Questions and answer to accompany press release on Sir
Nicholas Stern to join IDEAGlobal Group as Vice Chairman
: Why have you joined IDEAGlobal Group (IGG)?
: As an academic I have always believed in the value of high quality and
objective research. The IDEAGlobal Group has a long track record of
providing first rate independent research on economic and financial issues.
As a company they have a long standing relationship with the London School of
Economics, my new academic home. It seemed natural to forge a
relationship. I have also known many of the people associated with
IGG for many years and hold them in great esteem. I am looking forward to
re-acquainting myself professionally with Shandi Modi and Meghnad Desai as well
as Ian Johnson and Sam Fankhauser. Most people don't know this but just
before I joined the World Bank as Chief Economist I was an advisor to IDEAglobal.
: What role do you plan to play in the Group?
: It will be largely advisory, helping to advance IGG's business goals.
I will not play a role in day-today management; this is best left to others; but
I will be available to advise on strategy; provide commentary and analysis on
key reports; and offer general advice as needed.
:In you previous roles with the UK Treasury and World Bank you were involved in
economic policy. Do you feel financial markets always understand
Working with IDEAglobal will undoubtedly sharpen my perceptions regarding the
importance of mutual understanding between policymakers and market players.
This requires transparency of policymaking and constructive dialogue.
In particular, it is of great importance that policymakers and the market work
together to promote that understanding. IDEAglobal plays an important role
as a bridgehead between the macroeconomic policymaking community and the
: The IDEAGlobal Group also includes a new company dedicated to climate change
and carbon markets. Given your recent association with this issue what
will your role be?
: IDEAcarbon is bringing to the market the same quality and discipline as its
sister company, IDEAglobal, namely high quality analysis and independent
judgement and assessment. This is especially important in a new
market such as that for carbon. I would hope that my experience in
leading the UK's report on the economics of climate change would be of value.
: In what way?
: Carbon markets can make a very big difference to addressing climate change.
Market-based solutions can provide for efficient ways to reduce greenhouse gas
emissions. They also offer a tremendous opportunity to channel much needed
money and technology to developing countries to help them move to cleaner energy
technologies and lower emissions. My work on the economics of climate
change has highlighted the central role of markets.
markets must be transparent and backed by an effective regulatory system. Given
the typical long-term capital turnover associated with energy and transport, a
long-term framework is also essential.
ambition is for IDEAcarbon to become the primary source of expertise as we
deepen our understanding of the fundamentals of carbon markets and introduce
benchmarks for assessing the quality of assets. We have an unparalleled
opportunity to play a role in improving and expanding the market and hence in
responding to the challenge of climate change. IDEAcarbon's combination of
high quality market analysis and emphasis on the quality (and ratings) of
investment in securing emissions reductions is a very attractive package: one in
which high quality economic research and analysis play a central role. I
would hope that my background and experience will be of great value to
IDEAcarbon and its clients.
: There has been a recent upsurge in interest in climate change.
Presumably you could be in great demand? How will you divide your time?
: Indeed, there has been a great deal of interest in climate change and the role
of carbon markets. IDEAcarbon is the youngest member of the
IDEAGlobal Group and, over the coming months, I anticipate spending a fair
amount of time with IDEAcarbon. I will be working, part-time, consistent
with my responsibilities at LSE and HSBC, with a team there that I have known in
my previous work: Ian Johnson, the Executive Chairman, previously at the World
Bank and Sam Fankhauser, the Managing Director for Strategic Advice, previously
at the EBRD, so I feel comfortable in our working relationship. I also
believe that the quality of their work and the goals that they have set, in
terms of ratings and market analysis, are of considerable importance in
deepening our understanding of the carbon market and bringing transparency and
rigorous analysis to the market.
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