Article published in Ecological Economics Volume 147, May 2018, Pages 383-398
This paper presents a macroeconomic model that combines the economic impact of climate change with the pivotal role of private debt. Using a Stock-Flow Consistent approach based on the Lotka-Volterra logic, we couple its nonlinear monetary dynamics of underemployment and income distribution with abatement costs. A calibration of our model at the scale of the world economy enables us to simulate various planetary scenarios. Our findings are threefold: 1) the +2 C target is already out of reach, absent negative emissions; 2) the long-term (resp. short-term) results of climate change on economic fundamentals may lead to severe economic consequences without the implementation (resp. in the case of too rapid an application) of proactive climate policies. Global warming (resp. implementing policies too quickly) forces the private sector to leverage in order to compensate for output and capital losses (resp. to lower carbon emissions), thus endangering financial stabil- ity; 3) Implementing an adequate carbon price trajectory, as well as increasing the wage share, fostering employment, and reducing private debt make it easier to avoid unintended degrowth and to reach a +2.5 C target.
The purpose of this article is to reformulate a clear and in-depth state of knowledge provided by a thermo-evolutionary perspective of the economic system. It is shown that during the entire human history, energy has been central to direct the successive phases of technological change and economic development.
In their response, experts associated with the Chair emphasize the predominance of accounting standards over non-financial information to guide corporate strategies. Accounting is not neutral, and the fact that it does not integrate human and natural capital is a major obstacle to achieving the EU's sustainability objectives.
Speach from John E Roemer (Yale University)at the Research Seminar of the Chair Energy and Prosperity on October 23.
The Chair Energy and Prosperity organizes an international workshop on sustainable mobility on December. Subscription are open.