Economics must recognize the central role of negative externalities in the growth process, and integrate the costs and benefits of environmental stewardship and climate action. By doing so, economists could make an enormous contribution to tackling global warming – the biggest challenge facing the world today.
SINGAPORE – The economics profession has failed to anticipate the rapidly escalating climate crisis, just like it missed the looming global financial crisis back in 2008. True, some influential economists are starting to add to the chorus of concern about the threat global warming poses to sustainable economic growth. But mainstream macroeconomic-growth models have yet to integrate the scientific evidence for climate change. They must do so urgently if governments are to take the crucial step of shifting to low-carbon growth paths.
SINGAPORE – The economics profession has failed to anticipate the rapidly escalating climate crisis, just like it missed the looming global financial crisis back in 2008. True, some influential economists are starting to add to the chorus of concern about the threat global warming poses to sustainable economic growth. But mainstream macroeconomic-growth models have yet to integrate the scientific evidence for climate change. They must do so urgently if governments are to take the crucial step of shifting to low-carbon growth paths.