Doing economics and the climate emergency

Published by Anonymous (not verified) on Wed, 17/07/2019 - 1:11am in

If you read the blog we published yesterday, you might have noticed that three of the four winners of the student Doing Economics Data Competition 2019 took on the same subject: the climate emergency. That wasn’t a fluke, because the majority of the entries we received were on that topic too. The environment was one of the topics we identified in 2013 as an overlooked topic in economics courses. Students told us they wanted, and needed, to learn about it.

Obviously this is clearly one of the most pressing crises that confronts us, and so it’s vital that a wide cross-section of society, not only economics students, engages rigorously with the data on the climate emergency.

This is an exciting challenge to quantitative methods or economics courses. We want students to be able to evaluate, debate and communicate the impact and feasibility of the policy choices available to us, whether those policies are regulatory, technological or behavioural. Policies must be evidence-based if they are to achieve ambitious commitments such as the UK government commitment to net zero greenhouse gas emissions by 2050, and society needs to hold those policymakers to account.

Doing Economics Project 1: Measuring climate change
Doing Economics Project 11: Measuring willingness to pay for climate change mitigation

So that’s why we were so pleased that our winners were not only able to present the data clearly in ways that non-economists could understand, but their policy recommendations were based on a thorough understanding of the ethical and political, as well as the economic challenges that policymakers face. We’re thrilled because it’s exactly what we (and our generous funders the Nuffield Foundation) set out to achieve when we created Economics, Society and Public Policy and Doing Economics.

Changing the paradigm

Any economic evaluation of the climate emergency involves thinking deeply about market failures, inequality between individuals and generations, fairness, innovation, the role and limitations of government, and how to address social dilemmas. Also, if students are going to think meaningfully about any type of solution, they have to know how to understand and use empirical data from the beginning, not as an optional afterthought.

Perhaps this is why environmental sustainability has been largely ignored by standard introductory economics textbooks—the tools that students need to study it are rarely taught in a standard introductory course. Many of these courses consider environmental policy, if it is mentioned at all, as a niche application of economics.

In contrast, we consider that the economy is embedded in the biosphere (the figure, right, is in Unit 1 of both The Economy and Economics, Society and Public Policy), and so all our economic choices, whether as individuals, households, firms or governments, have an impact on the natural environment. CORE’s material, and emphasis on empirical data from the beginning, uses a consistent set of methods and tools to analyse the climate emergency and the other types of policy challenge that we investigate (see the list in Doing Economics).

Despite this, developing material that deal explicitly with the climate emergency (first in Unit 20 of The Economy, then in Sections 1.9 and 2.10 of Economy, Society, and Public Policy, and finally the two empirical projects in Doing Economics) wasn’t easy. The creative process inspired some very long, and very passionate, debates, and our treatment of the topic has evolved considerably from the first attempts in 2014. In response to feedback from experts, teachers and students we brought in more and better data, developed clearer models of decision-making, and a more precise framing of the problems.

How will we know if the choices we have made have been helpful? By listening to your feedback. Also by discovering how you plan to use, and are using, our material. Please let us know (or ask us questions) by email or on Twitter.

But some of the most encouraging feedback that we could possibly have was from the entrants to our competition, who were rigorous, creative and innovative, as you will discover when you read the prize-winning reports from Matteo, Francesco, and Michele, or Johannes, or Susanna. If you are teaching quantitative methods or setting data projects in your courses next year, we hope it motivates you to adopt Doing Economics. Or if you are studying, and want to develop your data-handling skills and learn how to apply them to  the climate emergency, then we think our winning projects will inspire you to try Doing Economics for yourself.

The post Doing economics and the climate emergency appeared first on CORE.