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Questions and answer to accompany press release on  Sir Nicholas Stern to join IDEAGlobal Group as Vice Chairman

Q : Why have you joined IDEAGlobal Group (IGG)?

A : 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.

Q : What role do you plan to play in the Group?

A : 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.

Q :In you previous roles with the UK Treasury and World Bank you were involved in economic policy.   Do you feel financial markets always understand policymaker’s intentions? 

A: 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 financial markets.

Q : 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?

A : 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.

Q : In what way?

A : 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.  
But 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. 
Our 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. 

Q : There has been a recent upsurge in interest in climate change.  Presumably you could be in great demand? How will you divide your time?

A : 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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