VoxTalks Economics

Economic sanctions are the big geoeconomic bazooka. But what does history tell us about how well they work, and their relevance today. And does the theory match the data? Moritz Schularick of the Kiel Institute for the World Economy and CEPR talks to Tim Phillips about the evidence of the history of sanctions on what they can achieve, whether we expect too much too soon from small sanctions – and whether politicians are prepared to impose the sanctions that bite.

Biodiversity is essential for the wide range of economic activities that our planet needs. Yet, the economic consequences of its global decline are hard to estimate, because most population studies focus on individual species in isolation. Frederik Noack of the University of British Columbia argues that this misses a central insight about biodiversity: a healthy environment depends not just on individual species, but also on the way they work together to keep our natural environment in balance. One especially important aspect of this is the way that birds help keep crops safe from pests and reduce the need for pesticides. He tells Tim Phillips about the long-term decline of bird populations in the US and the knock-on effect on agriculture, and pollution. 

Lucrezia Reichlin, an esteemed economist and expert in corporate reporting, discusses pivotal issues surrounding sustainability reporting and the ISSB initiatives. She delves into the need for standardized corporate disclosure and the challenges posed by differing regulations in the US and Europe. Reichlin also highlights the debate between investor-focused and double materiality approaches, and how emerging markets are embracing sustainability standards. Plus, she examines the impact of these regulations on corporate behavior and the importance of consistent measurement in addressing climate change.

Join economist Sergei Guriev, an expert on the political economy of populism, and political scientist Catherine de Vries, who studies the drivers of populist support. They dive into the rising tide of populism and its implications on climate policy. Explore how economic crises fuel populist narratives and the challenges they pose for democracy and sustainability. They discuss the critical need for clearer communication and inclusive policies to balance climate action with public support, revealing a complex relationship between populism and environmental priorities.

Our economy is embedded in nature, but nature is in danger. External funding is needed, especially in the Global South, to support the conservation of our natural ecosystems. Markets can play a role, but the way in which voluntary carbon markets do this has low public trust which, from recent news, may be deserved. Estelle Cantillon of Université libre de Bruxelles and CEPR tells Tim Phillips about her proposal for a new market mechanism to channel funds to projects that will conserve or restore our natural environment by paying dividends to those who invest. But how will it avoid greenwashing, and who will buy the shares? Read about this in Chapter 8 of the Paris report: https://cepr.org/system/files/publication-files/257653-policy_insight_145_designing_and_scaling_up_nature_based_markets.pdf

“What is needed is non-marginal, transformative change to shift the economy, technology, and society”. That’s the typically forthright recommendation from Rick van der Ploeg of the University of Oxford and University of Amsterdam for how to ensure that climate policy is effective at changing our habits and behaviour. He argues that the gradual changes in habits that current policies target don’t go far enough, and that we run the risk of backsliding. But what does this mean in practice? Rick spoke to Tim Phillips about what policies to push, when to push them – and how big the push needs to be.

Ottmar Edenhofer, Director of the Potsdam Institute for Climate Impact Research, dives into the crucial role of carbon dioxide removal in climate strategy. He explores various technologies like bioenergy with carbon capture and direct air capture, weighing their costs and effectiveness. Edenhofer discusses the need for regulatory frameworks to ensure the permanence of carbon storage, and outlines how geographical advantages can shape global CDR efforts. He also suggests innovative funding models to incentivize these technologies while warning against the risk of relying on them at the expense of direct emissions reductions.

Professor Sir Partha Dasgupta, a renowned economist from the University of Cambridge, discusses his groundbreaking work on biodiversity and natural capital. He shares insights on how humanity is embedded in nature, challenging the notion of separation. Dasgupta highlights the need for economic indicators that value nature and warns about the decline of natural assets. He also tackles complex issues like deforestation, trade-offs in agriculture, and the urgency of addressing biodiversity loss, emphasizing the risks of inaction and the importance of wealth transfers between nations.

Can COP 30 get the green transition back on track? It’s not a great time for international cooperation right now and, with hindsight, was the period from 2017 to 2022 a “golden moment” the climate transition, and was it an opportunity missed? That’s the argument presented by Livio Stracca, Deputy Director General Financial Stability at the European Central Bank, also the chair of NGFS work on climate scenarios. He talks to Tim Phillips about what we can learn from this golden moment, and what can be done this time around to avoid the dangers of what Livio calls “climate agenda fatigue” among both the public and governments. 

In the first of our special episodes from the first Hoffmann Centre / CEPR / ReCIPE Conference, we’re discussing what chances there are of significant multilateral agreements being signed at COP 30 and, given that the chances are low, what plan B might be. Beatrice Weder di Mauro of CEPR, Hoffmann Centre and the Geneva Graduate Institute tells Tim Phillips that, if everyone can’t agree, then coalitions of the willing – climate or finance clubs that offer incentives for the countries that want to join – can agree their own sustainability policies. But what are those incentives? And who will lead?