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The Economics of Climate Change: The Stern Review
Abstract
There is now clear scientific evidence that emissions from economic activity, particularly the burning of fossil fuels for energy, are causing changes to the Earth´s climate. A sound understanding of the economics of climate change is needed in order to underpin an effective global response to this challenge. The Stern Review is an independent, rigourous and comprehensive analysis of the economic aspects of this crucial issue. It has been conducted by Sir Nicholas Stern, Head of the UK Government Economic Service, and a former Chief Economist of the World Bank. The Economics of Climate Change will be invaluable for all students of the economics and policy implications of climate change, and economists, scientists and policy makers involved in all aspects of climate change.
... The most well-known example of this approach is the so-called Stern Report. In the basic model of the Stern Report, a stabilisation of global greenhouse gas concentrations in the atmosphere would be associated with costs to the value of 1% of GDP, whereas in a business-as-usual scenario without an additional climate policy we would see social costs (or welfare costs) amounting to what would correspond to an annual reduction in GDP of between 5% and 20% (Stern 2007). ...
... Most green growth modelling has focused thus far on limiting GHG concentrations as the central ecological target (Stern 2007, Jaeger et al. 2011, Calderon et al. 2014. 22 Only the UNEP study (UNEP 2011a) has considered the ecological footprint as an indicator for environmental pressures, and modelled the possibility of reducing these, on a global scale, to below 1. ...
... Most authors adopt the concept, prevalent within mainstream economics, of social well-being as the summation of individual utility levels (e.g. Jaeger et al. 2011, Stern 2007, Nordhaus 2008. This concept represents an operationalisation of the desire fulfilment theory of social well-being. ...
... Source: Nature Climate Change/Maximilian Kotz. The climate change argument arises from a succession of warnings from scientists and others, all of which indicate that human-caused climate change is an impending threat to civilization (Stern 2006;IPCC 2007a). Millions of people may face health consequences, crop production in the low latitudes may decline, water supplies may dwindle, precipitation in arid regions may decrease, extreme events may increase exponentially, and 20%-30% of species may face extinction (Stern, 2006;IPCC, 2007b). ...
... The climate change argument arises from a succession of warnings from scientists and others, all of which indicate that human-caused climate change is an impending threat to civilization (Stern 2006;IPCC 2007a). Millions of people may face health consequences, crop production in the low latitudes may decline, water supplies may dwindle, precipitation in arid regions may decrease, extreme events may increase exponentially, and 20%-30% of species may face extinction (Stern, 2006;IPCC, 2007b). Worse, catastrophic disasters such as the collapse of the polar ice sheets might cause major storm surge, flooding hundreds of millions of individuals (Dasgupta et al., 2009). ...
... Worse, catastrophic disasters such as the collapse of the polar ice sheets might cause major storm surge, flooding hundreds of millions of individuals (Dasgupta et al., 2009). If GHSs are not dramatically cut today, economic development and well-being may suffer (Stern, 2006). ...
Despite the fact that Pakistan’s contribution to GHG emissions is low (0.8%) when compared to other countries but it is one of the hardest hit by climate change. The present study is an attempt to identify the impact of climate change on economic growth. The non-linear autoregressive distributional lag (NARDL) technique is used to estimate the asymmetric effect of climate change on the economic growth of Pakistan. Annual data covering the years 1980–2021 are used for empirical analysis. It is noteworthy to reiterate that CO2 emissions and mean temperature pose asymmetrical results concerning economic growth, both in the long-run and short-run. CO2_POS and CO2_NEG have a negative impact on economic growth, whereas MEANT_POS has a positive impact on economic growth and MEANT_NEG has a negative impact. Precipitation has a positive and significant long-term influence on economic growth. Research findings indicate that comprehensive mitigation policies at the nationwide and worldwide levels are required to limit human-caused climate change in Pakistan. At national level, tree planting projects and safeguard greenery at all costs while at international level, policies needed for adoption of mitigation strategies to control climate change.
... On the other side of the debate, the limit of 2 °C was typically framed as a balanced objective between the costs of mitigation and climate damages (Stern, 2007). The problem with the 1°C target, it was argued, is that it was not feasible politically. ...
... The gap between the projections and data can only partly be explained by the economic downturn during the first phase of the Covid-19 pandemic, which could not have been anticipated by the pre-pandemic scenarios. However, the gap already existed before the recession and was due to overestimating growth rates for the recovery period after the crisis of 2007-2008(Burgess et al., 2020. The period of low growth since 2008 may be an anomaly after which the global economy will eventually return to high growth, as the International Monetary Fund (IMF) suggests (IMF, 2021a). ...
There is broad scientific consensus that to avoid catastrophic climate change, global warming should be stabilised well below 2 °C compared to the pre-industrial period. Alarmingly, the window of opportunity to bring down greenhouse gas emissions in line with this objective is rapidly closing. Existing climate mitigation literature agrees that the time when gradual emission reductions could address the issue of climate change is over, and that nothing short of a profound transformation of the energy system, economy, and lifestyles is required to accomplish the necessary emission reductions.
Multiple scenarios have been produced by integrated assessment models (IAMs) that explore different mitigation avenues to accomplish a low-carbon energy transition. In this thesis, I analyse whether existing scenarios adequately represent biophysical constraints to the transition. Moreover, I explore if existing scenarios consider the full range of mitigation options to reduce emissions, and whether the scenarios assume adequate energy to enable a flourishing life for all. Finally, I discuss potential implications that a transition to a low-carbon energy system may have for the economy.
Existing mitigation scenarios estimate emissions and energy pathways that would be compatible with limiting global warming to 1.5‒2 °C. However, at present, these scenarios do not estimate the amount of energy needed to build and maintain a low-carbon energy system, nor the amount of greenhouse gas emissions that would be associated with such a transition. This is a major gap in the literature, as it remains unclear how much of the remaining carbon budget would be tied to the transition, and how much of it would effectively remain for society to produce goods and provide services using fossil fuels. I calculate that the emissions associated with the transition could range from 70 GtCO2 to 395 GtCO2, with a cross-scenario average of 195 GtCO2. This corresponds to approximately 0.1 °C of additional global warming.
I show that the transition could drive up the energy requirements of the energy system and may require a decrease in per capita net energy use of 10%‒34% during the initial push for the transition. Nonetheless, in contrast to what has been argued in previous studies, a low-carbon energy transition would not necessarily lead to a decline in the Energy-Return-on-Energy-Invested (EROI) of the overall energy system in the long-term.
I conclude that a continued growth in energy use may be incompatible with the goal of avoiding dangerous climate change. Although use of negative emissions technologies may unlock additional energy from fossil fuels, the overall increase in available energy may be exaggerated in existing scenarios, due to overestimation of realistic mitigation potential and disregard of the high energy requirements of these technologies. Furthermore, use of negative emissions technologies may decrease the efficiency of energy provisioning to society, leading to increased economic expenditure for energy.
The conclusion that a low-carbon energy transition may limit the prospects of growth in energy use raises concern, as energy is a key requirement to produce goods and services. How do existing mitigation scenarios address the socioeconomic implications of this energy constraint?
I find that existing mitigation scenarios perpetuate the striking inequalities of energy use between the Global North and Global South. Lack of equitable convergence is further underlined by the scenarios that assume negative emissions. Although these scenarios allow for higher global energy use, the additional energy is overwhelmingly allocated to the countries in the Global North, which have the highest per-capita energy consumption. Moreover, existing mitigation scenarios do not consider that limits to energy growth may have a negative effect on the economy. On the contrary, mitigation scenarios typically assume economic growth is to increase in the future, despite lower energy use. To square economic growth with decreasing energy use, mitigation scenarios assume rapid and unprecedented improvements in the efficiency of energy use in the global economy. However, feasibility of accomplishing such improvements has been fiercely contested. To explore if there are alternative pathways to accomplishing a low-carbon energy transition, I outline a series of scenarios that assume lower rates of global economic growth. I demonstrate that lower economic growth makes it possible to accomplish sufficient emission reductions with more moderate energy efficiency improvements and a slower build-up of a low-carbon energy system. I discuss the concerns regarding negative implications that lower growth may have on social wellbeing and the ability to pay for the transition. I argue that post-growth policies focused on wealth redistribution may lead to desirable social outcomes without compromising the aim of avoiding dangerous climate change.
... The 2020 storm season produced a record 29 named Atlantic storms. This pattern holds globally (Webster, Holland, Curry, and Chang, 2005) and it holds true for a range of other types of severe climate change-related weather events (Stern, 2007;Mendelsohn and Saher, 2011). Recent studies have proposed methods that allow for the attribution of individual disasters to climate change. ...
... Climate change can have potentially devastating long-term economic effects (Stern, 2007), with the majority of the consequences of climate change expected towards the end of the century (Hong, Karolyi, and Scheinkman, 2020). However, the long delay before these effects fully impact the global economy can discourage actions to mitigate climate change-related risks, and the relevance of these risks from today's perspective depends heavily on discount rates (Nordhaus, 2010). ...
We investigate how corporate loan costs are affected by climate change-related natural disasters. We construct granular measures of borrowers’ exposure to natural disasters and then disentangle the direct effects of disasters from the effects of lenders updating their beliefs about the impact of future disasters. Following a climate change-related disaster, spreads on loans of at-risk, yet unaffected borrowers, spike and are amplified when attention to climate change is high. Weaker borrowers with the most extreme exposure to these disasters suffer the highest increase in spreads. Importantly, there is no such effect from disasters that are not aggravated by climate change.
... With regard to the number of environmental migrants, estimates of the numbers of people being displaced by climate change (including both short-term and longterm movements) by 2050 range from 50 million to 1 billion people (Adger et al., 2015;Stern, 2007;Human Tide, 2022). Note that Jacobson put forward the low end of the range (50 million environmental refugees) (a.k.a. ...
... However, the most-cited number (but not rigorously tested), 200 million, is based on projections conducted by Myers in 1995 and. These projections are consistent with conservative estimates of climate impacts, but there is uncertainty in these estimates, and it is necessary to use extrapolations due to lack of data (Black, 2016;Myers, 1995Myers, , 2005Brown, 2015;Stern, 2007). ...
... Sir Nicholas Stern, in his review for the British government of the economic impacts of climate change (Stern 2006), concluded that climate change is the greatest and most wide-ranging market failure ever seen, and that the economic analysis of it must deal with long term horizons, using the economics of risk and uncertainty. The Stern Review stated categorically that mitigation of climate change must be viewed as an investment because the consequences of not taking action It must be stressed, however, that since the era of cheap and liberal energy availability is ending, no technology that currently exists, whether renewables, nuclear, biofuels, hydrogen, coal, tar oil, or any other, has the capacity to replace what oil has given us. ...
... The need for an environmentally sustainable economy has been widely advocated and its economic benefits identified, not least by (Stern 2006) and (Turner 2007). Sustainability should become a fundamental criterion for economic decisions, equal in fact to profitability. ...
Written before fracking and oil from tar sands became predominant, and in the expectation that the climate and biodiversity emergencies (catastrophes) would be positioned as priorities in local and national government policy and planning, this report sought to place sustainability at the heart of local government. The fact that nearly 15 years later, still very few politicians understand the enormity of our collective environmental predicament is a mark of the inadequacy of so-called representative government. That does not, however, detract from the stance and insight presented in this document, or the relevance of these issues, which gain in importance with every passing day.
... Early adaptation action, with emphasis on investment in climate resilience to address climate change consequences, and as a result of decisions taken by the actors involved, is a process that extend over many decades and secures substantial early benefits and may be cheaper than actions later on (Frankhauser, 2017), but without strong and early mitigation, the physical limits to -and costs of -adaptation will grow rapidly (Stern, 2006). There is no generally agreed adaptation policy tool kit but there is consensus on the key pillars of low-carbon policy (Frankhauser, 2017). ...
... Climate change impacts on low-income populations tend to be higher and will affect the basic elements of life for people around the world -access to water, food production, health, and the environment. Hundreds of millions of people could suffer hunger, water shortages and coastal flooding as the world warms (Stern, 2006). Social tensions due to socioeconomic inequalities has been seen as a worrisome risk in the South American region. ...
Aiming at analyzing climate governance and climate security in South America, this paper presents an overview of the region’s carbon emissions associated to certain socio-economic dimensions that shall contribute to the overall understanding of the region’s climate governance progress and risks magnitudes. A comparison with world indicators is also presented to place the South American region within the scope of global governance.
It will be examined climate security risks in the South American region and the constitution of some preventive dimension regarding the challenges of mitigation and adaptation. It will assess the South American countries performance in the face of the enormous challenges placed by the climate change, whether in terms of mitigation, adaptation and GHG emissions reduction, as well as its possible setbacks and conflicts. Urbanization, social inequalities and coastal threats will be scrutinized as major risks for the climate security in the region.
An approach around the period 2010-2019 will be applied to comparatively analyze the countries of the region with other major carbon emitters. In this sense, a quantitative analysis of the following variables will be carried out: GHG emissions, energy sources, energy intensity, carbon intensity, GHG/emissions per capita, GDP per capita, carbon price initiatives, national determined contributions (NDCs), vulnerability and adaptation,
The study will allow cross-sectional analyzes and groupings of countries with similar characteristics, which will prove to be important due to the great structural differences of the South American countries. Such an analysis will make it possible to better define the capacity and responsibilities of countries in terms of climate governance. Furthermore, it will allow a current view of the representativeness of the countries in the region in terms of climate performance with the aim of verifying advances and setbacks or any relevant observation that demonstrates a change in the trend.
... Although the Brundtland Report does not give a universal interpretation of the term sustainable development, the idea of sustainable development is spreading to many aspects of modern life. Many reports (e.g., Stern, 2007) state that the transition to a more climate-friendly economy is a huge challenge and that capital markets are the right actors to finance most of the costs of this venture. Importantly, financing for sustainable development is of great importance not only for combating climate change, but also in the process of implementing new technologies and innovative products. ...
The purpose of the article/hypothesis: The purpose of the paper is to present the historical background of sustainable development and importance of sustainable finance, and to discuss the most important challenges currently facing sustainable finance. The article verifies the research hypothesis: recent changes (implementing of the EBA Action Plan, the Sustainable Finance Disclosure Regulations and facing the COVID-19) in the finance sector can help institutions pursue an effective, sustainable development policy. Methodology: The article contains an extensive literature review of the sustainable development policy (including legal acts). Results of the research: Sustainable development in the finance sector plays an important role and is currently facing three main challenges: the implementation of the EBA Action Plan, the Sustainable Finance Disclosure Regulation and COVID-19. The EBA Action Plan and SFDRs may initially require financial institutions to change their policy and thus complicate their operations, but later bring only benefits (e.g. transparency). On the other hand, the COVID-19 pandemic is a significant obstacle to the implementation of the sustainable development policy due to countries and entities focused on fighting this threat (including using financial resources). However, it should be mentioned that sustainable development brings long-term effects (including more effective development), thanks to which companies can achieve the desired benefits and overcome the obstacles and crises caused by the pandemic and future crisis.
... Climate change is marked by high uncertainty but has many negative outcomes for the environment, such as extreme weather, glacial melting, and rising sea levels (Stern 2006). Carbon proactivity is a long-term consideration in that people must control their current wasteful behavior although it may satisfy their current desires and wishes. ...
Due to inadequate studies, our knowledge of the effect of female directors and national culture on the corporate response to climate change is still limited. To address this gap, the purpose of this paper is to investigate the dynamic relationship between gender diversity on the board of directors and corporate carbon proactivity and how two dimensions of national culture (individualism and indulgence) moderate this relationship. This study focuses on large companies that disclosed carbon-related information via the CDP survey in 2011–2017. Our findings show that gender diversity promotes corporate carbon proactivity. Furthermore, the positive effect of gender diversity on carbon proactivity is weaker when firms are in countries marked by a higher level of individualism and indulgence. As far as we know, this study is the first to explore and document the empirical evidence on the dynamic impact of gender diversity in the corporate governance body and national culture on managers’ climate change behaviors in terms of green proactivity.
... The fight against climate change is at an unprecedented critical phase: the impact of human systems of production and consumption on the environment as well as the transition to a more sustainable economy are at the center of public attention and EU policy agenda [1][2][3] . In this context, the development of green technologies, which despite being relatively at an early stage of the life cycle has shown a great acceleration over recent years 4 , might play a crucial role both towards containing and preventing greenhouse gas (GHG) emissions and in sustaining a shift towards less environmentally costly manufacturing processes [4][5][6] . It is therefore of the greatest importance to investigate how green technologies are connected to the economy and, in particular, to industrial production. ...
We study the empirical relationship between green technologies and industrial production at very fine-grained levels by employing Economic Complexity techniques. Firstly, we use patent data on green technology domains as a proxy for competitive green innovation and data on exported products as a proxy for competitive industrial production. Secondly, with the aim of observing how green technological development trickles down into industrial production, we build a bipartite directed network linking single green technologies at time t1 to single products at time t2≥t1 on the basis of their time-lagged co-occurrences in the technological and industrial specialization profiles of countries. Thirdly, we filter the links in the network by employing a maximum entropy null-model. Our results emphasize a strong connection between green technologies and the export of products related to the processing of raw materials, notably crucial for the development of climate change mitigation and adaptation technologies. Furthermore, by looking at the evolution of the network over time, we observe a growing presence of more complex green technologies and high-tech products among the significant links, suggesting an increase in their importance in the network.
... The impacts on agriculture and food security are more prominent especially in the agriculture oriented and developing countries like India. These countries have limited arable land but heavy dependence on agriculture and also have poor technological and financial capabilities for mitigation and adaptation to climate change [7], [9] and [13] and is estimated that by 2080, agriculture output in developing countries may decline by 20% due to climate change, while output in industrial countries is expected to decrease 6% and yields in developing countries is expected to reduce by 15% on an average [3]. Due to the changing climatic events over the years, agriculture is becoming more and more vulnerable, which might lead to increase in land degradation, decrease in the water availability and reduction in the diversity of crops. ...
Climate change refers to any change in climate over time, whether due to natural variability or as a result of human activity. The climate projections for Karnataka say that the state might experience 1.5-2 0 C warming as early as 2030s. The districts such as Chitradurga, Tumkur, Raichur, and Koppal are projected to experience highest warming by 2 0 C or more by 2030s. In this view the study was carried out to analyze the impact of climatic parameters on area, production, and yield of cereals and pulses in the North Eastern Karnataka districts. The study was based on the secondary data. The results showed that, area under cereal crops such as paddy and bajra were negatively impacted by the maximum temperature, while the area under green gram and Bengal gram was positively and significantly influenced by all three climatic parameters. The production of jowar, green gram and Bengal gram crops was impacted by all three climatic parameters. The paddy yield witnessed high positive and significant impact by maximum temperature while, jowar yield noticed a significant positive effect due to rainfall, but maize yield was negatively influenced by minimum temperature significantly. The yield of green gram was significantly impacted by rainfall. The rainfall and maximum temperature positively impacted the yield of the bengalgram crop.
... In Robi (dry season), Boro rice is the main cultivated rice species, along with other non-rice crops (Table 18.2). (2014), Stern (2006) and Mondal (2010) Rainfall 5-6% increase in rainfall by 2030 Changes in rainfall could result in reduced crop yields in the country Substantial decline in cereal (rice and wheat) production, resulting from erratic rainfall IPCC (2007), Sikder and Xiaoying (2014) and CDMP II (2013) ...
Agricultural cropping pattern and crop production in the Southwestern coastal region of Bangladesh is affected severely by climate-induced events and climatic variability. This study shows the impacts of climatic-induced events (e.g., cyclone Sidr and Aila) on agricultural cropping patterns and crop production in two disaster-prone Southwestern coastal districts (i.e., Khulna and Satkhira) in Bangladesh. For analyzing the trend of climatic variability (e.g., temperature, rainfall, and relative humidity), 35 years (1980–2014) of climatic data were used. This study shows that the agricultural crop production in the selected Southern coastal region of the country had declined significantly when the two major cyclones (i.e., Sidr and Aila) approached in 2007 and 2009, respectively. A correlation analysis has been performed between annual average crop production and annual average climatic data to identify the influence of climatic variability on crop production.
... Bu bölümde verilen örnekteki mesire alanı için yapılacak hizmet işlemleri için bireyler farklı zamanlarda farklı faydalar elde edecekleri için bu faydaların (ödeme istekleri) değeri farklı dönemlerde farklı olmakta ve bu faydaların şu anki değere toplu olarak anuite ile sabit bir iskonto oranı ile her dönemde farklı bir katsayı ilehesaplar yapılıp ortak zaman içinde toplanmaktadır. Stern (2007) tarafından hızla başlatılan, gelecekteki maliyet ve faydaları değerlendirmek için uygun bir iskonto oranı tartışması da standart iskonto çerçevesinin genişletilmesine yol açmış, birçok faktörün yanı sıra, iklim değişikliği nedeniyle art arda kıtlaşan çevresel mallar gibi piyasalarda işlem görmeyen mal ve hizmetlerin nispi fiyatlarının değişmesi dikkat çekmiştir (Hänsel, 2018).Bir diğer örnek güneş enerjisi gibi birçok alana uygulanacak belirli bir politika veya eylemin faydaları uzun yıllar boyunca devam etmektedir. Böyle bir eylemin toplam fayda ve maliyetlerinin bir ölçüsü, yalnızca cari dönemdeki fayda ve maliyetleri değil, aynı zamanda mevcut eylemden kaynaklanacak gelecekteki faydaları da içermektedir. ...
... 280 Ver: Stern (2007), Dasgupta (2021). Para un análisis y una crítica más detallada ver: Spash, C.L. y Hache, F. (2021). ...
Este documento surge de la inquietud ante el enorme reto que supone descarbonizar la economía actual (cerca del 83% de la demanda total mundial de energía aún depende de combustibles fósiles), por ello intentamos comprender de qué forma se han articulado las estructuras de poder y la construcción de las políticas que guían el proceso de transición energética, y cuáles serán las implicaciones socioecológicas, en distintas geografías y para distintos grupos humanos y no humanos, de la descarbonización y el combate a la crisis climática.
... According to the climate change scenarios, the main wheat-growing regions with seasonal temperatures are predicted to increase by 1.0-1.5 °C, 2.5-4 °C, and 4.5 °C, respectively, in 2020, 2050, and 2080. According to several international assessments, India's crop production would decrease by 10-40% by the end of the century (Stern, 2007) [11] . Taking in to the consideration of transpiration, photosynthesis and respiration which is subjected to the heat-stress related yield loss, here we enlightened results on correlation and path analysis studies in the wheat, to identify the correlation and direct and indirect effect in the path analysis. ...
The field experiment was conducted to study the "Morpho-physiological and biochemical studies for heat tolerance traits in wheat (Triticum aestivum L.) genotypes." at the farm of Wheat and maize Research Unit, Vasantrao Naik Marathwada Agriculture University, Parbhani, during Rabi season of 2020-21 and 2021-22. Total 16 genotypes collected from Wheat and maize Research Unit, VNMAU, Parbhani was taken to conduct the experiment. Each treatment was replicated two times. The experiment was laid out in simple lattice design. The high temperature stress was induced by manipulation of sowing dates. Different morpho-physiological traits viz., tillers per meter row length, relative water content, membrane stability index, chlorophyll content, canopy temperature, and total dry matter production were found to be correlated with grain yield. These traits may be used in breeding programme for development of thermo tolerant genotypes for late condition under changing climatic scenario. Plant height at 90 days after sowing showed positive significant correlation with grain yield, number of tillers 45 DAS, Flag leaf area 60 DAS, chlorophyll content 15 DAA and chlorophyll content 21 DAA. The characters viz., leaf area, chlorophyll content 15 DAA, canopy temperature 15 DAA and canopy temperature 21 DAS showed high direct effect on grain yield per plant.
... This is made up of contributions from multiple conversion steps, which differ in their opportunity cost (Y axis) and total emissions in the landscape (X-axis) (Fig. 6). Using the threshold of 5 USD Mg CO 2 e −1 (Stern 2007), the emissions from land-use conversion that could have been avoided ranged between 6 Mg CO 2 e ha −1 year −1 to 15.3 Mg CO 2 e ha −1 year −1 over different periods of observation. Approximately 41 % of the aboveground carbon-stock emission, totalling 5.88 Mg CO 2 e ha −1 year −1 , could have been avoided if a carbon price of 5 USD Mg CO 2 e applied only for aboveground losses and a lower fraction (35 %) but higher total amount (7.03 Mg CO 2 e ha −1 year −1 ) if belowground emissions from peatland conversion were taken into account. ...
Tripa is the last remaining peat-swamp forest that harbours a potentially viable Sumatran orangutan (Pongo abelii) sub-population in a formally but not effectively protected area. It appears to be a simple showcase where current efforts to financially support reducing emissions from deforestation and forest degradation (REDD+) converge with biodiversity and social co-benefits. In practice, however, situation is more complex. REDD+ efforts interact with global palm oil trade and regulatory approaches (the moratorium) to achieve national goals for emissions reduction under umbrella of nationally appropriate mitigation actions (NAMA). To contextualize this debate, we assessed (i) land-use history and formal basis of palm-oil companies’ rights; (ii) carbon (C) stocks, historical emission levels and potential emissions that can be avoided; (iii) economic benefits of land-use options and opportunity costs of avoiding emissions; (iv) biodiversity and environmental services; and (v) alternative options for “high C stock development” and employment generation. Natural forest cover declined (54 % in 1995, 18 % in 2009) while oil palm increased 4–39 %. Aboveground C stocks decreased from 148 Mg ha−1 in 1990 to 61 Mg ha−1 in 2009, leading to average annual emissions of 14.5 Mg (carbon dioxide) CO2eha−1 year−1. While 41 % of these emissions yield less than American Dollar (USD) 5 of current economic benefits per Mg CO2e emitted and might be compensated by REDD+, nearly all new emissions derive from a breach of existing laws, regulations and voluntary palm-oil standards. Substantial investment in alternative employment is needed, rather than carbon payments per se, to support livelihoods in a low carbon emissions economy.
... An important tool is putting a price on 10 More details in (Bhattacharya et al. 2021) 11 The Stern Review described climate change as "the greatest market failure the world has ever seen. " Naturally, dealing with such a uniquely multifaceted externality is extremely difficult (Stern 2007). ...
Rising inequality and widespread poverty, social unrest and polarization, gender and ethnic disparities, declining social mobility, economic fragility, unbalanced growth due to technology and globalization, and existential danger from climate change are urgent global concerns of our day. These issues are intertwined. They therefore require a holistic framework to examine their interplay and bring the various strands together. This book brings together leading academic economists and experts from several international institutions to explain the sources and scale of these challenges. The book summarizes a wide array of empirical evidence and country experiences, lays out practical policy solutions, and devises a comprehensive and unified plan of action for combatting these economic and social disparities. This authoritative book is accessible to policy makers, students, and the general public interested in how to craft a brighter future by building a sustainable, green, and inclusive society in the years ahead.
... Economists wanting to evaluate the efficiency of public policies have primarily used the Ramsey equation in one of two ways to estimate the SRTP (e.g., Nordhaus, 2007;Stern, 2007;Moore et al., 2013). Specifically, Arrow et al. (2014) discuss normative and positive methods for parameterizing Ramsey's model. ...
The goal of natural resource damage assessment (NRDA) is to compensate the public for losses to natural resources from past or ongoing hazardous releases, including losses that may persist into the future. Compensation is delivered in the form of restoration projects. Resolving NRDA liability requires balancing losses and restoration benefits over multiple decades and converting them into a present value for calculating appropriate damages. For the past two decades, NRDA practitioners have used a real discount rate of 3 % to convert losses and benefits to a present value equivalent. That rate was based, in part, on real historical yields on risk-free debt (e.g., the real rate of return on 3-month Treasury bills). Declining interest rates on risk-free debt in recent years has led to suggestions to reexamine the historical consensus discount rate. This paper reviews two alternative conceptual paradigms for selecting a discount rate in NRDA cases: the social rate of time preference and discount rates for tort cases. We summarize historical data for empirically implementing the two paradigms and discuss the ramifications of the different options. Based on our review, we suggest maintaining the 3 % consensus as a practical solution to a range of empirical candidates within the two conceptual paradigms.
... In 2006, Nicholas Stern, head of the United Kingdom's Government Economics Service presented his report on 'Economics of Climate Change' to the British Government where he has advocated climate change mitigation as one of the cardinal objectives (Stern, 2007). The Stern report stated that if we don't act, the overall costs and risks of climate change would be equivalent to loosing at least five per cent of global GDP each year now and forever. ...
Today, human race faces many threats but none is greater than the climate challenge. I quote Ban Ki-moon, the Secretary General of UN, “ climate change does not respect borders; it does not respect who you are-rich and, the poor, small and big. Therefore, this is what we call ‘ global challenges’ which require global solidarity”-co-operation and collaboration among all people and all governments of the world. Our globe, is a world of looming climate challenges. Climate change is happening here and happening now. Hence, human beings should not become architects of their own destruction. With the available knowledge and tools, it is essential to reduce global warming in terms of the mitigation and adaptation strategies. Therefore, this paper delineates various climate change coping strategies followed all over the world with a detailed description of measures formulated and adopted in India.
... El cambio climático, consecuencia de una externalidad negativa global derivada de las emisiones de gases de efecto invernadero (gei) a la atmósfera (Stern, 2007), tiene costos económicos negativos significativos y generalizados, no lineales y con puntos de no retorno, más intensos en países en desarrollo y que están incluso erosionando las bases de sustentación del actual dinamismo económico (ipcc, 2014;Burke et al., 2015;Dell et al., 2014). ...
El principal objetivo de este artículo es analizar algunos hechos estilizados de la trayectoria de las emisiones de gases de efecto invernadero, y con base en ello construir algunos escenarios prospectivos para México que ilustran la urgencia, la magnitud, los riesgos, las posibilidades y las limitaciones del esfuerzo de mitigación requerido para alcanzar la meta de una economía carbono neutral entre 2050-2070. La construcción de estos escenarios se basa en los modelos IPAT y STIRPAT. Los principales resultados indican que las emisiones de energía (CO2eet) están estrechamente asociadas a la evolución del producto interno bruto (PIBt), del PIBT per cápita, de la población y del consumo de energía, y que el actual proceso de desacoplamiento en la trayectoria de las emisiones de CO2eet provenientes de sus principales variables determinantes es insuficiente para cumplir la meta de una economía carbono neutral para 2050-2070. A fin de alcanzar la meta de una economía carbono neutral entre 2050-2070 es necesario realizar transformaciones estructurales con urgencia y de una gran magnitud, que se reflejen en intensos procesos de reducción de las razones de consumo de energía a PIBt y de emisiones de CO2et a consumo de energía. La actual trayectoria de la economía mexicana donde se posponen los procesos de mitigación conduce a una trayectoria de encadenamiento que reduce la credibilidad del cumplimiento de las metas de descarbonización profunda y está aumentando los riesgos de una transición climática justa.
... It is thus little wonder that the estimation of long-run discount rate has vast repercussions and it has been the object of intense work and controversy over conflicting estimates between relatively low rates, as the ones advocated by Stern [40], and the higher rates of Nordhaus [41,42]. The choice of a proper long-run discount rate has enormous repercussions on long-run environmental planning and in latter years a number of empirical results have appeared on this matter [43,44,45,46,47,48,49,50,51] and the issue is far from being settled. ...
We investigate the effects of resetting mechanisms when valuing the future in economic terms through the discount function. Discounting is specially significant in addressing environmental problems and in evaluating the sense of urgency to act today to prevent or mitigate future losses due to climate change effects and other disasters. Poissonian resetting events can be seen in this context as a way to intervene the market, it modifies the discount function and it can facilitate a specific climate policy. We here obtain the exact expression of the discount function in Laplace space and attain the expression of the long-run interest rate, a crucial value in environmental economics and climate policy. Both quantities are obtained without assuming any model for the evolution of the market. Model specific results are achieved for diffusion processes and in particular for the Ornstein-Uhlenbeck and Feller processes. The effect of Poissonian resetting events is non-trivial in these cases. The overall lesson we can learn from the obtained results is that effective policies to favor climate action should be resolute and frequent enough in time: the frequency of the interventions is critical for actually observing the desired consequences in the long-run interest rate.
... Most of the disclosure requirements have been based on the TCFD framework, which has become the standard framework for climate-related financial disclosures (Kröner and Newman 2021). This framework has over 2,600 sup- Climate change has been called "the greatest and widest-ranging market failure ever seen" (Stern 2006 Fossil fuel capital expenditure by G20 state-owned entities has fluctuated but has not shown signs of lasting decline, and was slightly higher in 2019 than in 2013 (Geddes et al. 2020). Given the lack of 2020 data for investments in fossil fuels by state-owned entities, the most recent data available, from 2019, are used for 2020 (Geddes et al. 2020). ...
The State of Climate Action 2022 provides a comprehensive assessment of the global gap in climate action across the world’s highest-emitting systems, highlighting where recent progress made in reducing GHG emissions, scaling up carbon removal, and increasing climate finance must accelerate over the next decade to keep the Paris Agreement’s goal to limit warming to 1.5°C within reach.
... The particular application is to distribution of resources between generations, respecting the sacrifice that the present generation is willing to make for future generations (Goulder and Williams, 2012;Kelleher, 2017). Characterizing such distributions relates to the quantification of the discount rate, and is of high policy relevance (Stern, 2007;Nordhaus, 2007;Drupp et al., 2018). Critically, the distribution depends on the relative weight assigned to the next generation by the present generation. ...
I study whether saving behavior reveals socially relevant intertemporal preferences. To this end, I decompose the present generation’s preference for the next into its dynastic and cross-dynastic components in a model of saving. If people are concerned about the next generation as such, then they might assign welfare weights on other dynasties. With such cross-dynastic intergenerational altruism, saving for one’s descendants benefits present members of other dynasties. These preference externalities imply that socially relevant intertemporal preferences cannot be inferred from saving behavior. Numerically, I show that even "small" preferences for the next generation as such can lower the efficient discount rate by 20% to 40%, as compared to Nordhaus’ calibration.
... Kondisi memburuknya permsalahan lingkungan telah menjadi sumber masalah air dan berbagai risikonya. Stern (2014) dan McCarl dan Reilly (1999) mengatakan bahwa faktor penyebab krisis air dari kualitas, sisi kuantitas, maupun kontinuitas didalamnya mengenai perubahan iklim global dalam jangka panjang, intensitas, dan pola sebaran spasial, maupun curah hujan yang tidak menentu serta temporal. Permsalaha yang bisa muncul adalah banjir serta kekeringan yang semakin sering terjadi. ...
Tulisan ini akan mengkaji tentang politik pengelolaan air bersih sebuah tinjauan atas langkanya kualitas air bersih di Kampung Kedungringin Kecamatan Sukawangi Kabupaten Bekasi. Alasan penelitian ini dilakukan adalah karena terjadi persoalan di Kampung Kedungringin yakni tidak adanya akses terhadap air bersih baik secara kualitas maupun kuantitas. Berbagai upaya telah dilakukan oleh masyarakat Kampung Kedungringin seperti membangun sumur bor dengan bantuan dari para dermawan. Namun hal ini belum cukup untuk memenuhi kebutuhan air bersih bagi seluruh warga. Peran PDAM Tirta Bhasasi pun dalam hal ini belum mampu menjangkau wilayah Kampung Kedungringin karena Saluran Pipa Air Bersih jauh dari lokasi Kampung Kedungringin. Dengan permasalahan tersebut, maka penelitian ini akan mengkaji terkait bagaimana upaya yang dilakukan PDAM Tirta Bhagasasi dan Pemerintah Desa Sukaringin dalam memenuhi akses kebutuhan air bersih di Kampung kedungringin. Metode Penelitian yang digunakan dalam penelitian ini adalah metode penelitian kualitatif deskriptif dengan pendekatan studi kasus. Hasil penelitian ini menunjukkan bahwa upaya yang dilakukan PDAM Tirta Bhagasasi dalam memenuhi kebutuhan air bersih bagi masyarakat Kampung Kedungringin belum terealisasi. Hal ini dikarenakan PDAM Tirta Bhagasasi dalam pembangunan saluran pipa air bersih baru sampai ke wilayah perumahan/cluster di Desa Sukaringin. Air bersih belum bisa mengalir ke Kampung Kedungringin karena PDAM Tirta Bhagasasi lebih memprioritaskan Kawasan perumahan cluster bekerjasama dengan pengembang. Itu artinya kelompok masyarakat yang mempunyai uang akan lebih diprioritaskan daripada kelompok masyarakat yang tidak mempunyai uang.
... On October 30, 2006, economist Nicholas Stern a UK government-sponsored report exceeding 700 pages long detailing the costs of damages that climate change is expected to have on the world economy. The "Stern Review" is one of the first comprehensive and most in-depth review analyzing the interplay between climate change and global economic costs (Painter, 2020;Stern, 2006). According to Painter (2020), there was increased attention to climate change around the release of the Stern Review report. ...
We examine how climate change risk impacts corporate social responsibility using an international firm-level sample. Exploiting a new firm-level measure of climate change risk, we find that firms significantly adjust their CSR standards upwards in response to climate change risk shocks. Using the difference in difference (DiD) approach and natural disaster shocks as plausibly exogenous shocks to climate change risk, we document an increase in CSR performance for affected firms relative to their unaffected peers after severe natural disasters. Additionally, we observe that the sensitivity of CSR performance to climate change risk jumps after the release of the Stern Review and the Paris Agreement. Furthermore, we find that this impact is more pronounced for firms in climate-sensitive sectors, firms with more growth options, firms with higher governance standards, and firms in highly competitive industries. Overall, our findings reveal that climate change uncertainty can trigger firms to invest more in CSR activities to hedge against regulatory and physical risks.
... Climate change is the most significant challenge to human survival and global sustainable development in the 21st century, and innovations to mitigate and adapt to climate change have attracted much scholarly attention accordingly (Stern, 2006;IPCC, 2007;Diffenbaugh and Field, 2013;Wen et al., 2022). Global warming may lead to a dramatic increase in global temperatures, thereby leading to increased evaporation and atmospheric water content and associated changes in rainfall patterns (De Frenne et al., 2021;Wang et al., 2021). ...
Climate change has brought great challenges to global sustainability, but only few research achievements in innovation for climate change mitigation and adaptation have been reported. This study aims to identify the current research status and trends in climate innovation via CiteSpace visual analysis. We searched for published papers (up to 2021) in the core repository of Web of Science by using the theme of innovation for climate change mitigation and adaptation. Using the collected articles, we conducted co-authorship analysis, co-citation analysis, and keyword co-occurrence analysis and found that the main contributors are from America, England, and China. Moreover, climate innovation has an interdisciplinary knowledge source, and its main research frontier focuses on the design of policies for energy efficiency improvement and new energy technologies. These results point out some directions for further research on climate innovation and outline the knowledge structure in this field, thereby addressing the lack of studies on such topic. By analyzing the lineage of research developments, it is found that energy technology and energy efficiency would be the main research hotspots in climate innovation in the future, and relevant policies also need to strengthen incentives for research in this area. This study is particularly helpful for those researchers who are interested in climate innovation and can subsequently contribute to the long-term development of various research directions in this field, to the formulation of climate change mitigation and adaptation policies, and to the sustainable development of human society.
... We tried to take into account the conclusions of think tanks such as the Club of Rome reflections, the "Meadows Reports" [2] [3], the "Brundtland Report" [4], and studies by the economist Nicholas Stern [5] and the OECD [6] [7] and historical data for France for the period 2011-2021.The reflections of the Rome Club and the "Meadows report" had led to the conclusion that in order to preserve the environment there should be no growth. These studies concluded that the costs of the consequences of environmental degradation were between 1% and 5% of GDP depending on the disaster mentioned. ...
We present how artificial intelligence can be used to optimize countries' macroeconomic and environmental programs for a given period. We use an automaton that manages possible changes to a country’s membership of country unions, an Expert System based on macroeconomic and environmental rules, and an optimizer of rules, scenarios, and programs. This approach can be applied to any country by using its historical data and by quantifying parameters suitable for that country: name of the country, population, cash, situation in relation to country’s unions, constraints (in particular limit values that must be respected by the programs), and macroeconomic and environmental rules parameters. As example, we apply the presented process to examples of France’ programs. We put forward optimizations of four macroeconomic and environmental scenarios, and seven macroeconomic and environmental programs for France from 2022–2026 in line with different objectives. We then quantify the significant improvements obtained with their optimizations.
... This paper, has, in the main, sought to adhere to the spirit of its antecedents, including Stern (2007), Nordhaus (2008), Acemoglu et al. (2012), von Below (2012, van der Ploeg and Withagen (2014), Golosov et al. (2014), Belfiori (2017), Rezai and van der Ploeg (2017), Barrage (2018), and Cai and Lontzek (2019). Golosov et al. (2014), whose model I consider a benchmark for comparisons, proved that the optimal carbon tax (expressed as a proportion of GDP) depends solely on the social cost of carbon, the carbon persistence parameter, and a discount factor. ...
In a Ramsey policy regime, heterogeneity in beliefs about the potential costs of climate
change is shown to produce policy ambiguities that alter carbon prices and taxation. Three sources of ambiguity are considered: (i) the private sector is skeptical, with beliefs that are unknown to the government, (ii) private agents have pessimistic doubts about the model, or (iii) the policy authority itself does not trust the extant scientific climate model and fears the worst. These three sources of ambiguity give rise to four potential belief regimes characterized by differentials between the government’s and the private sector’s inter-temporal rates of substitutions, with implications for the prices of carbon and capital, framed in terms of distorted Arrow–Debreu pricing theory that establishes an equivalence between the optimal carbon tax and the permit price of an underlying asset—the government-imposed limit on emissions in economies with cap and trade. This paper
shows that in most instances, skeptical beliefs and resulting ambiguities justify higher carbon taxes and lower capital taxes to offset the private sector’s increased myopia compared with rational expectations. Conversely, ambiguities created by worst-case fears in either the private sector or in government tend produce forces in the opposite direction.
The concept of sustainable development affects every part of economic life. The provision of liquidity and capital should contribute to a habitable ecological and social environment. This paper surveys the role of finance in the concept of sustainability. It starts with a discussion of finance and ethics, as sustainability, in principle, is an ethical concept. In the following sections , the focus is on socially responsible investments (SRIs) as the most prominent representatives of sustainable finance. Various techniques to construct such investment products and their different types are explained. We demonstrate the labour division between and the tasks of the different agents in the network of SRI. Special reference is made to empirical results concerning the performance of an asset allocation process restricted by sustainability criteria. As SRI intends to promote a firm's contributions to social, environmental and governance issues, the question that is discussed is if and how investors can enforce such a real impact. Sustainable finance goes beyond financial investment contracts. With socially responsible property investments, research on an asset class is presented, which represents real investments with sustainability criteria. Sustainable finance with a strong focus on very direct impacts on the borrower side and partial links to philanthropy is discussed by introducing micro-finance. The paper ends with a look at the valuation of a firm conducted under ecological and social criteria and with a brief discussion on carbon finance.
Drawing on more modern expressions of economic analysis, this book explores the interplay between wellbeing, nature, and moral values in economics.
In standard accounts of economics, these three themes are typically treated in isolation from each other, or else overlooked entirely. This book argues that due to this blinkered approach, standard economic analysis is poorly equipped to deal with global contemporary challenges, including climate change, biodiversity loss, sustainability, and the risk of pandemic diseases.
The book reviews the economic literature to show that the last few decades has seen the re-insertion into economic analysis of human wellbeing, natural resources, and moral values: three themes present in early economic thought that are highly relevant to the challenges ahead. The book argues for the greater integration of these three themes as the natural environment is crucial to human wellbeing, and moral values are essential for environmentally benign behaviors. The book also focuses on how specific moral values, identified by contemporary moral psychology, actually shape economic behavior rather than how abstract ethical principles should shape economic behavior
In the last two decades, carbon pricing has contributed on consolidating a normative consensus of responding to the problem of climate change with economic instruments. The article explores the consensus about carbon pricing and its neoliberal rationality and argues that this turn to economics helps to explain its limited results, as it ties climate policies to private interests, despite of its poor outcomes.
Of the many fields of economics, environmental economics has arguably had the greatest influence on legal practice in recent decades.
Amending the definition of energy land, this paper calculates and analyzes China’s energy ecological footprint, energy biocapacity, energy ecological deficit or surplus, energy ecological footprint efficiency, and energy ecological footprint index based on the carbon cycle. Meanwhile, this paper applies the ARIMA model to predict China’s energy ecological footprint. The results show that the per capita energy ecological footprint continues to rise and the per capita energy biocapacity continues to decline. In 2010, the growth of China’s energy ecological footprint exceeds energy biocapacity for the first time and becomes an unsustainable state. Energy ecological footprint efficiency continues to increase and is in an ecological deficit and economically developed zone after 2010. From a structural point of view, China’s energy ecological footprint mainly consists of row coal, coke, and crude oil consumption. The main reason for the increase in energy ecological footprint is the rapid increase in row coal and crude oil consumption while energy efficiency can mitigate this impact. From 2020 to 2030, China’s energy ecological footprint will increase from 1.2207 to 1.3573 ha/cap.
This study assessed how smallholder farmers perceive climate variability, what adaptation strategies they practice, and factors that determine their adaptation use in the Suha watershed, northwest Ethiopia. Both cross-sectional and longitudinal research designs were employed to obtain survey data from selected households and a long period of meteorological records from Ethiopia's nation metrological agency. A descriptive analysis was used to summarize farmers' perceptions, to see the actual seasonal/annual variability of rainfall and temperature, and to identify the different adaptation responses to climate variability. A binary logit model was mainly used to identify the determinant factors for adaptation responses. The descriptive statistics showed seasonal and annual rainfall variability across highland, midland, and lowland agroecology over the last three decades. The analysis model also indicated that the agro-ecological location of farmers, age, education, farm size, income from farming, access to information, extension service, and livestock ownership were the determinant variables for crop diversification strategy. Similarly, soil and water conservation as an adaptation strategy was positively influenced by the agro-ecological location of farmers, age, household head, educational attainment, family size, access to information, extension service, and livestock ownership. Besides, the agro-ecological location of farmers, academic status, farm income, and access to climate information were influential factors in practicing improved crop varieties in the watershed. However, the agro-ecological location of farmers and livestock ownership has negatively influenced on the practice of soil and water conservation in the watershed. This result is critical for context-based interventions in tropical highland settings, where dissected topography and convectively dominated rainfall could lead to local climatic variability. Therefore, taking an efficient adaptation measure to climate variability needs to consider the influence of different factors based on the agro-ecological zone of the farmers.
Sustainable development means meeting our needs without compromising the ability of future generations to meet their own needs. Human activities have significantly altered the ecosystems, causing environmental degradation, loss of biodiversity, and climate change. Accompanied with the rapid economic growth is the increasing consumption of natural resources and rising social inequalities. The environment, economy, and society must function together and support each other for a sustainable humanity. Mathematics is essential in identifying and analyzing the challenges. It helps us understand the impact and assess the risks. It allows us to make predictions to better inform science and public policy. Through a sequence of sustainability and mathematical concepts, exercises, and projects, the reader is brought along on this journey and confronts global challenges to develop an understanding of the complex environmental, economic, and sociocultural interlinkages and to equip themselves to cooperate actively in the present and support sustainable development in the future.
Climate change stands to have a profound impact on human society, and on political and other conflicts in particular. However, the existing literature on understanding the relation between climate change and societal conflicts has often been criticized for using data that suffer from sampling and other biases, often resulting from being too narrowly focused on a small region of space or a small set of events. These studies have likewise been critiqued for not using suitable statistical tools that (i$$ i $$) address spatio‐temporal dependencies, (ii$$ ii $$) obtain probabilistic uncertainty quantification, and (iii$$ iii $$) lead to consistent statistical inferences. In this article, we propose a Bayesian framework to address these challenges. We find that there is a strong and substantial association between temperature anomalies on aggregated material conflicts and verbal conflicts globally. Going deeper, we also find significant evidence to suggest that positive temperature anomalies are associated with social conflict primarily through government‐civilian and government‐rebel material conflicts, as in civilian protests, rebel attacks against government resources, or acts of state repression. We find that majority of the conflicts associated with climate anomalies are triggered by rebel actors, and others react to such acts of conflict. Our results exhibit considerably nuanced relationships between temperature deviations and social conflicts that have not been noticed in previous studies. Methodologically, the proposed Bayesian framework can help social scientists explore similar domains involving large‐scale spatial and temporal dependencies. Our code and a synthetic dataset has been made publicly available.
Profound distributive injustices underly global patterns of resource use and related carbon emissions. In addition, those with the least responsibility for the climate crisis are projected to be most severely impacted in the decades ahead, while those with the greatest share of resources continue to produce disproportionate levels of pollution. Those with the resources need to do much more, particularly as countries facing the highest levels of temperature variability also have the least economic potential to cope with the impacts. A fair sharing of climate change burdens between countries would mean that those countries benefiting from greater climate stability would also bear a higher burden of climate change mitigation and adaptation efforts.KeywordsDistributive injusticePollutionFair shareClimate burdenMitigationAdaptation
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Küreselleşme fenomeni ile ortaya çıkan en önemli negatif dışsallıkların başında gelen ve küresel kamusal kötü olarak nitelendirilen iklim değişikliği, finans sektörü ve reel ekonomiyi etkilediği için merkez bankalarının kaynak tahsisinde yeşil para ve sermaye araçlarını kullanması yeşil dönüşümü gerektirmiştir. İklim krizi olgusu ile mücadele edilmesi gerekliliğinin aciliyeti, esas olarak iklim değişikliğinin kısmen geri döndürülemezliği ve eylemi geciktirmenin önemli maliyetleri nedeniyle, tüm politika yapıcıların bu zorluklara karşı rollerini ve var olan potansiyellerini keşfetmelerini gerektirmektedir ki son dönemde sayıları artan akademik çalışmalarla birlikte finansal sistemi yeşillendirme ağı ve sürdürülebilir bankacılık ağı gibi uluslararası merkez bankalarının dâhil olduğu kuruluşların vücut bulması, iklim krizi ile mücadele kapsamında merkez bankalarının geleneksel hedeflerinden dönüşümüne bir işaret olarak gösterilmektedir. Bu bağlamda yeşil merkez bankacılık, sürdürülebilir bir anlayışla iklim ve çevre değişikliğinden kaynaklanan riskleri minimize etmeyi, fiyat ve finansal istikrar hedeflerini korumayı amaçlayan bir bankacılık kavramı olarak tanımlanmaktadır. Bu çalışmada iklim kaynaklı finansal risklerin neler olduğu, bu risklerin finansal sektörü ve reel ekonomiyi nasıl etkilediği, merkez bankalarının iklim kaynaklı risklere karşı hangi enstrümanları kullanarak nasıl tepki verebileceği ve merkez bankalarının yeşil dönüşümü gerçekleştirme potansiyeli ile birlikte var olan sınırlılıklar incelenmiştir. Bu çalışmanın amacı, merkez bankalarının iklim değişikliğinden kaynaklı riskleri ve para politikalarındaki istikrarsızlıkları azaltmak için uygulayacağı alternatif yöntemleri belirleyerek küresel düzeyde uzun vadeli sürdürülebilir bir stratejik yaklaşımı benimsemektir. İklim değişikliğinden kaynaklı risklerin azaltılması, yeşil ekonomiye geçiş için düşük karbon ekonomisinin benimsenmesi, iklim adaptasyonunun maliyetlerinin artması, emek ve sermayenin yoğun emisyonlardan yeşil endüstrilere yeniden tahsisi, çalışmanın ekonomik sonuçları kapsamında yer almaktadır. Bu kapsamda fazla tazminat talebi ve daha pahalı sigorta primleri, değişen yapısal faiz oranı seviyesi ve devlet borcunun sürdürülebilirliği ile ilgili zorluklar ise iklim değişikliğinden kaynaklı finansal sonuçlar kapsamında ele alınmaktadır.
Abstract
The climate change-a phenomenon regarded as one of the most significant negative externalities of globalization and defined as a global "public bad"-and its impacts on the financial sector and the real economy demonstrated the need for central banks to brace themselves for a green transformation whereby these institutions resort to green money and capital instruments in resource allocation. The urgency of tacking the phenomenon of climate crisis, mainly due to the partial irreversibility of climate change and significant costs of delaying action, requires all policy makers to reconsider their roles and existing potentials in light of these challenges. As indicated by an ever-growing number of academic studies, the emergence of international central banks, including such institutions as the Network for Greening the Financial System (NGFS) and the Sustainable Banking Network (SBN), manifest the fact that the conventional targets formerly proposed by central banks are undergoing a crucial transformation as part of an overall effort to tackle the climate crisis. In consideration of these current circumstances, green central banking came to be defined as a banking concept that aims to minimize the risks arising from climate and environmental change, and to protect the price and financial stability objectives by adopting a sustainable approach. This study aims to explore the climate-related financial risks to gain insight into how these risks might affect the financial sector and the real economy, which instruments central banks can use to respond to climate-related risks, alongside the potentiality of central banks to realise the green transformation and their intrinsic limitations. The purpose of this paper is to suggest a strategic and global approach to long-term sustainability by identifying alternative methods to be applied by central banks to reduce the risks caused by climate change and instability in monetary policies. Managing climate change risks, the adoption of a low-carbon economy to encourage the transition to a green economy, the increasing costs of climate adaptation, the reallocation of labour and capital to green industries instead of emission-intensive sectors are the economic results which will be addressed in this study. The rising indemnity claims and insurance premiums, the changing structural interest-rate levels and the difficulties concerning the sustainability of government debt will also be analyzed within the scope of this study as the financial consequences of climate change.
Nature is an active agent in the environment-induced human migration seems to be logical in explaining the large, forecasted estimates of the climate-displaced people by environmentalists. However, migration scholars and researchers have largely ignored this direct causal relationship. To ascertain whether people’s decisions to stay or leave are directly proportional to the environmental crisis they face, this paper analyzes the various empirical and theoretical studies on this subject. Analysis of the real-life instances suggests that environmental changes are a contextual factor and trigger migration only
when intertwined with other divers of migration. Moreover, migration outcomes, either no or out or return, are a function of the aggregated adaptive capacity of actors at different scales. Based on these premises, this paper presented the Environment-Migration Nexus Framework. This framework highlights the impact of climate stressors on humans, and migration, as an adaptive response, is influenced by individual characteristics, location-specific capital, the government supports, and household- and community-level adaptation strategies. Consideration of this framework might provide the researchers in this field with a more accurate and broader picture of migration in the context of climate change.
Climate change is a matter of extreme urgency. Integrating science and economics, this book demonstrates the need for measures to put a strict lid on cumulative carbon emissions and shows how to implement them. Using the carbon budget framework, it reveals the shortcomings of current policies and the debates around them, such as the popular enthusiasm for individual solutions and the fruitless search for 'optimal' regulation by economists and other specialists. On the political front, it explains why business opposition to the policies we need goes well beyond the fossil fuel industry, requiring a more radical rebalancing of power. This wide-ranging study goes against the most prevalent approaches in mainstream economics, which argue that we can tackle climate change while causing minimal disruption to the global economy. The author argues that this view is not only impossible, but also dangerously complacent.
The response of trade-wind clouds to warming remains uncertain, raising the specter of a large climate sensitivity. Decreases in cloud fraction are thought to relate to interplay among convective mixing, turbulence, radiation, and the large-scale environment. The EUREC4A (Elucidating the role of cloud-circulation coupling in climate) field campaign made extensive measurements that allow for deeper physical understanding and the first process-based constraint on the trade cumulus feedback.I first use EUREC4A observations to improve understanding of the characteristic vertical structure of the trade-wind boundary layer and the processes that produce this structure. This improved physical understanding is then applied to the evaluation of trade cumulus feedbacks. Ideas developed support new conceptual models of the structure of the trade-wind boundary layer and a more active role of clouds in maintaining this structure, and show little evidence for a strong trade cumulus feedback to warming.
Achieving climate justice is increasingly recognized as one of the key problems associated with climate change, helping us to determine how good or bad the effects of climate change are, and whether any harms are fairly distributed. The numerous and complex issues which climate change involves underline the need for a normative framework that allows us both to assess the dangers that we face and to create a just distribution of the costs of action. This collection of original essays by leading scholars sheds new light on the key problems of climate justice, offering innovative treatments of a range of issues including international environmental institutions, geoengineering, carbon budgets, and the impact on future generations. It will be a valuable resource for researchers and upper-level students of ethics, environmental studies, and political philosophy.
We analyze the differences in CO2 emissions from fuel combustion per capita between developing countries and how these are influenced by a series of affluence, structural, demographic, and climatic variables. First, a regression analysis provides new evidence on the determinants of CO2 emissions in developing countries. We find an N‐shaped relationship with GDP per capita and a negative impact of the agriculture share and average daily minimum temperatures, while urbanization and the share of potentially active population would be positively correlated with emissions per capita. Second, by using the regression‐based inequality decomposition method, we indicate the weight of each significant determinant in explaining the inequality in CO2 emissions per capita between developing countries. The main contributors are economic affluence and the potentially active population, in this order. We study the relevance of each factor in the changes experienced by inequality over time. Some of our results contrast with previous evidence for more heterogeneous samples. We derive some relevant implications for environmental and energy policy in developing countries.
We study the variation of global and unilateral carbon price recommendations and their determinants. To this end, we provide survey evidence on carbon pricing from more than 400 experts across almost 40 countries. We quantify the extent of (dis-)agreement and reveal that a majority of experts can agree on some short- and medium-term global carbon price levels, and on unilateral carbon price levels in most countries. We find little evidence for free-riding. Indeed, experts’ unilateral carbon price recommendations with border carbon adjustment are, on average, higher than global recommendations. Furthermore, border carbon adjustment facilitates higher price recommendations and tends to foster agreement among experts on carbon price levels. We analyze how experts’ recommendations vary with additional survey data on key policy design issues, such as instrument choice, other likely determinants of carbon price recommendations as well as country characteristics and observable expert characteristics.
One of the most significant impacts of climate change is that extreme weather events such as heatwaves and heavy precipitation are occurring more frequently. In turn, social-ecological systems are affected in adverse ways making adaptation to climate change vital, unavoidable, and increasingly urgent. This chapter suggests three types of adaptation discourses based on O’Brien et al. (Climate Policy 7:73–88, 2007): technical-fix, socio-political change, and behavioural/cultural change. In addition, Pelling’s (Adaptation to climate change. Routledge, From resilience to transformation, 2011) three forms of adaptation by the degree of change are introduced to enable a more comprehensive understanding of adaptation policy. This section also describes climate change impacts on water, which is the focus of this book. In many parts of the world, flood magnitude and frequency are increasing, while the level of low flows is decreasing (IPCC, Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, 2021; IPCC, Climate Change 2014: Impacts, Adaptation and Vulnerability, Volume 2, Regional Aspects. Working Group II Contribution to the IPCC Fifth Assessment Report. Cambridge University Press, 2014a). In relation to flood control measures, this study identifies three main discourses which, for the purpose of simplification, are called: engineering-development, participation-equity, and conservation-ecosystem service discourses. A discursive space created by those discourses is also introduced. Finally, a historical overview of institutional changes in the field of water management is presented.KeywordsClimate change adaptationWater managementAdaptation discoursesWater management discourses
Inequality is often referred to as the phenomenon of unequal or unjust distribution of resources, wealth, opportunities, etc. among members of a given society. On the other hand, another set of inequalities exists that limit the human potential and the overall welfare of people. The government of various countries has raised these issues on national and international platforms and has come together to formulate policies, laws, and legislation to curb the same. Gender inequality, inequality of income and wealth, etc. have always dominated modern politics but the advent of Covid-19 has deepened existing inequalities hitting especially the poorest and the most vulnerable communities the hardest. Among the newly emerging forms of inequalities, the inequalities caused by climate change are the most consequential and pernicious. Even though global economic growth has lifted millions out of extreme poverty and reduced inequalities among nations, unbridled climate change threatens to set back that progress by damaging poverty eradication efforts worldwide and disproportionately affecting the poorest regions and people. In such a world, the government, policymakers, international organizations have a crucial role to play. Studies in recent times have shown how climate change is creating a rift between developed and developing nations and the importance of the principle of ‘common but differentiated responsibilities’ formalized by the UNFCCC. However, very less focus is on how climate change inflicted inequalities is affecting global politics, the role of governments in tackling the same, and how these changes themselves alter the nature and state of governance. The paper seeks to study and critically analyze the inequalities caused by climate change and its future impacts with a major focus on Asia and Africa. The global climate politics and how it changed the nature of state and governance. Comparing the policies and steps taken by the government of India and other countries to mitigate these climate change inflicted inequalities under the United Nations SDG 10: “Reduce inequality within and among countries” and SDG 13: “Take urgent action to combat climate change and its impacts”. Finally discussing how to reduce these inequalities targeting the necessity of contriving policies based on deeper analyses of the concrete circumstances of a country. Following the promise of 'leaving no one behind', people-centered approaches are at the core of our response. To conclude, the vicious cycle of climate change, political inaction, and inequality need to be broken if momentous steps to preserve the Earth and the dignity of its human inhabitants are to ever prosper. The need of the hour is to understand that awareness without the ability to hold corporations, countries, and individuals accountable will not result in major action on climate change-inflicted inequalities. Above all, we need to restore our trust in collective action through government, politics, and other means.
İklim değişikliği, uluslararası finans otoritelerince finansal sistem ve reel ekonomi için çeşitli riskler taşıyan yapısal bir sorun olarak değerlendirilmektedir. Küreselleşen ekonomide finansal sistem ve reel ekonominin maruz kaldığı risklerin ana kaynağı olan iklim değişikliğini minimize edecek faktörlerin belirlenmesi yeşil dönüşümü gerektirirken, merkez bankaları nezdinde farkındalık günden güne artmakta ve çözüm yolları aranmaktadır. Bu bağlamda yeşil merkez bankacılık en öz haliyle, başta finans sektörü olmak üzere ekonominin genelinde sürdürülebilir bir anlayışla çevresel ve iklim değişikliğinden kaynaklanan riskleri azaltmayı, fiyat ve finansal istikrar hedeflerini korumayı amaçlayan bir bankacılık konseptidir. Merkez bankaları, yeşil finansal varlıkların daha çok kullanılmasıyla proaktif bir şekilde ekonomik kalkınmayı hedeflemektedir. Bu çalışmada iklim kaynaklı finansal risklerin neler olduğu, bu risklerin finansal sektörü ve reel ekonomiyi nasıl etkilediği, merkez bankalarının iklim kaynaklı risklere karşı hangi enstrümanları kullanarak nasıl tepki verebileceği ve merkez bankalarının yeşil dönüşümü gerçekleştirme potansiyeli ile var olan sınırlılıklar incelenmiştir. Bu çalışmanın amacı, merkez bankalarının iklim değişikliğinden kaynaklı riskleri ve mali politikalardaki istikrarsızlıkları azaltmak için uygulayacağı alternatif yöntemleri belirleyerek küresel düzeyde uzun vadeli sürdürülebilir bir stratejik yaklaşımı benimsemektir. Çalışmada, merkez bankalarının nihai amacı olan fiyat ve finansal istikrarı tehdit eden iklim değişikliğinin neden olduğu risklerin talep ve arz yönlü şoklar yaratması farklı çözüm önerileri geliştirilmesini sağlamıştır. Bu bilgiler ışığında, Türkçe akademik literatüründe ele alınan konunun incelenmemesi bu çalışmanın özgünlüğünü ortaya koymaktadır.
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