The economics of immense risk, urgent action and radical change: towards new approaches to the economics of climate change

2022/02/24 by Nicholas Stern, Joseph E. Stiglitz, Charlotte Taylor · 1 voice · 2 citations
Economics, Econometrics and Finance · Energy · Environmental Science · #Climate Change Policy and Economics #Global Energy and Sustainability Research #Environmental Impact and Sustainability

paper · pdf · doi:10.1080/1350178x.2022.2040740

openalex publication_date 2022/02/24 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/29

Abstract

Designing policy for climate change requires analyses which integrate the interrelationship between the economy and the environment. We argue that, despite their dominance in the economics literature and influence in public discussion and policymaking, the methodology employed by Integrated Assessment Models (IAMs) rests on flawed foundations, which become particularly relevant in relation to the realities of the immense risks and challenges of climate change, and the radical changes in our economies that a sound and effective response require. We identify a set of critical methodological problems with the IAMs which limit their usefulness and discuss the analytic foundations of an alternative approach that is more capable of providing insights into how best to manage the transition to net-zero emissions.

Citations

• Prices vs. Quantities
• Substitution, Risk Aversion, and the Temporal Behavior of Consumption and Asset Returns: A Theoretical Framework
• A Mathematical Theory of Saving
• A Review of the Stern Review on the Economics of Climate Change
• The Informational Role of Warranties and Private Disclosure about Product Quality
• Tipping elements in the Earth's climate system
• Temporal Resolution of Uncertainty and Dynamic Choice Theory
• Climate Change Policy: What Do the Models Tell Us?
• Climate Change: The Ultimate Challenge for Economics
• Global mortality from outdoor fine particle pollution generated by fossil fuel combustion: Results from GEOS-Chem
• Modeling myths: OnDICEand dynamic realism in integrated assessment models of climate change mitigation
• Net Zero by 2050: A Roadmap for the Global Energy Sector

Cited by

• Emerging consensus on net energy paves the way for improved integrated assessment modeling
• Empirically grounded technology forecasts and the energy transition

Discussions

• Yes, I think such originality-claiming is the tone of their 2022 article. That is further confirmed by their lack of citations to the multiple past articles on the safe-target approach, as if it is so [bsky, 0 points, 0 comments]