Confessions of an Economist: How Imperfect Policymaking Will Shape Transition Risks

Many of the financial risks that will arise from the transition towards a net-zero economy will be determined by what climate-related policies are enacted, the speed with which policymakers act, and how the economy evolves in response to these policies.

Given economics’ critical role in policymaking, the economist’s perspective on climate change provides insights into how these policy options might evolve, helping risk professionals to better identify and assess financial risks associated with the transition to net-zero.

So, today’s episode will explore:

• How economics shapes climate policy, and how climate policymaking shapes the economy
• How well climate change is incorporated into economists’ thinking, models, and policymaking guidance
• How economics needs to evolve to fully address the risks from climate change

Links from today’s discussion:

Harvard University’s interdisciplinary approach to climate change: https://climatechange.environment.harvard.edu/home#section3 

Keep Climate Policy Focused on The Social Cost of Carbon - Jim’s article on the ‘social cost of carbon’ vs. ‘cost-effectiveness’ approaches: https://www.science.org/doi/10.1126/science.abi7813 

The United States’ Renewable Fuel Standard Program: https://www.epa.gov/renewable-fuel-standard-program/overview-renewable-fuel-standard 

For more information on climate risk, visit GARP’s Climate Resources Hub: https://climate.garp.org/ 

If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com 

------------------

Jim Stock, Professor of Political Economy and Vice Provost for Climate and Sustainability at Harvard University

Jim’s current research includes energy and environmental economics with a focus on fuels and on US climate change policy.

From 2013-2014, Jim served as a Member of President Obama’s Council of Economic Advisers, where his portfolio included macroeconomics and energy, and environmental policy. From 2007-2009, he was Chair of the Harvard Economics Department, and he holds a Doctorate in Economics from the University of California, Berkeley.