Professors David Keith, Franklin Allen, and José Scheinkman discuss incentivizing climate change solutions. Topics include restructuring market incentives, Amazon reforestation, financial innovations, fusion technology, and challenges in governmental solutions. The podcast explores the role of finance in driving environmental change and the importance of collaboration for achieving net zero emissions.
Cooperation and political consensus are crucial for effective global climate policies.
Preserving the rainforest is essential for carbon capture, highlighting the need for reforestation efforts.
Deep dives
Challenges in Climate Change Policy and Finance
Decarbonizing quickly requires a significant percentage of GDP, raising the question of whether financial incentives alone can achieve this without government intervention. Discussions include restructuring market incentives, natural solutions like rainforest preservation for reducing CO2, and solar geoengineering. The debate centers on the need for cooperation and political consensus on climate policies at a global scale.
Impact of Rainforest Preservation on Addressing Climate Change
Preserving the rainforest, especially the Brazilian Amazon, is crucial for carbon capture. With 15% of the forest already deforested, there's an opportunity to recapture significant CO2 emissions. The potential to capture 30 gigatons of carbon along with private and government financing initiatives underscores the importance of scaling up reforestation efforts.
Financial Innovations for Climate Change
The potential of green bonds and contingent payments based on carbon emissions to drive climate-friendly investments is considered. While traditional ESG investing faces challenges in measuring real impact, newer financial instruments tied to emissions reduction show promise in aligning financial incentives with environmental goals.
Role of Regulation and Technological Advances in Climate Initiatives
Debates touch on the effectiveness of ESG investing, the necessity of governmental interventions, and the potential of carbon-based consumption taxes to drive emission reductions. Technological advancements like fusion energy and renewable resources are seen as crucial for achieving long-term sustainability goals in combating climate change.
How can we incentivize the private and public sectors to develop and deploy solutions to climate change, while accounting for uncertainties? This episode of The Pie covers a panel discussion among professors David Keith of the Department of the Geophysical Sciences at UChicago and founding faculty director of the university’s Climate Systems Engineering initiative, Franklin Allen of Imperial College in London, and José Scheinkman of Columbia. Lars Peter Hansen, The David Rockefeller Distinguished Service Professor in Economics, Statistics in the Kenneth C. Griffin Department of Economics and the Booth School of Business and winner of the 2013 Nobel Prize in Economics, moderates.
This podcast was part of a climate change conference, co-sponsored by the Macro Finance Research Program at the University of Chicago and the Brevan Howard Centre for Financial Analysis at Imperial College Business School, exploring uncertainty and tipping points. More information on the event can be found here.
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