Adapting Agricultural Trade
Climate change affects, and will continue to affect, agricultural productivity around the world. It is one of the inescapable ironies of our times that sub-Saharan Africa will be severely affected by climate change, despite how little it has contributed to global carbon emissions. How severe will these effects be? And is there any way to mitigate the effect on the most susceptible nations, besides curbing emissions, which appears to be a losing strategy? “Agriculture is a vulnerable sector because it is fed by rain and it is near the limits of thermal tolerance to begin with,” said Obie Porteous, Associate […]
Plugging into Progress
Many countries signed on to the 2016 Paris Agreement, but nine years later, how many are actively working toward decarbonization? Watchdog organizations are evaluating the progress made year over year and will encourage the 195 or so signing parties to keep the commitments they made. One such organization is the independent scientific project Climate Action Tracker (CAT), whose main graphic summarizes the goals. On May 21, 2025, the Climate Action Tracker group presented a webinar, “Plugging Into Progress: Evaluating Power Sector Decarbonization,” in which four experts on climate risk discussed the progress, or lack thereof. Louise Jeffrey began the session. […]
A Defining Moment
Investing in emerging markets amid today’s complex global landscape presents both opportunities and risks. Can investors identify markets with a strong potential for risk-adjusted returns? Can they avoid the worst of the pitfalls? In a webinar on March 19, 2025, three experts in the field presented a round-table discussion titled “Capital Flows, Tariffs & Trade: A Defining Moment for Emerging Markets Investors.” They touched on issues as wide-ranging as exchange rates, geopolitical risk, and trade barriers that will be discussed more fully at the upcoming conference, CFA Institute LIVE 2025 to be held in Chicago, 4-7 May, 2025. The panel […]
Energy transitions
As the low-carbon energy transition takes hold, transition risk becomes a hot topic. Various uncertainties, mismatches, and potential obstacles emerge, threatening to delay the changeover. For example, in 2021, the U.K. had to restart coal-fired power plants due to low wind power. Two major transitions in electricity generation are underway. The cost of generating electricity with natural gas has dropped—and the costs of solar panels and energy storage have also dropped. Both are leading to new vistas in power generation. However, “over-investment in CCNG may affect the transition to renewables,” said Gautam Gowisankaram, professor of economics at Columbia University and […]
Distributional consequences
Climate change marches on. To prepare for worse storms, droughts, and wildfires, the infrastructure must be improved. Governments have different ways to handle the costs of adapting to climate change. How will these additional costs be borne? “Transition to a carbon-neutral economy is at the top of the policy agenda around the globe,” said Moritz Kuhn, professor of economics at the University of Mannheim. Private households account for about two-thirds of carbon emissions. “Governments can introduce policies to speed up the adoption of green technologies,” he said, but the heterogeneity of consumption and carbon emissions could present problems. These will […]
Resilience and Development
For developing countries, how will climate change affect the progress of their economic development? Will these countries be able to use available opportunities through institutions such as the World Bank to adapt to changing conditions and improve people’s lives? “Development and resilience are mutually reinforcing,” said Stéphane Hallegatte, Senior Climate Change Adviser at the World Bank. “Development contributes to resilience, and resilience is crucial for safeguarding gains from increasingly frequent crises.” He was speaking at a webinar on September 5, 2024, on economic development in a changing climate. This was part of the series of talks sponsored by the Federal Reserve Bank […]
On the Move
“Humanity is on the precipice of a great climate migration, and Americans will not be spared,” says Abrahm Lustgarten, the author of a new book released March 26, 2024. “Tens of millions of people are likely to be driven from the places they call home. Poorer communities will be left behind, while growth will surge in the cities and regions most attractive to climate refugees. America will be changed utterly.” On the Move: The Overheating Earth and the Uprooting of America by Abrahm Lustgarten is a new book published by Farrar, Straus & Giroux. It is a vivid, journalistic account […]
Flood Economics
When it comes to natural disasters such as flooding, does it make more economic sense to control the flood? Or to sit back, suffer the consequences, and count on insurance? Climate change leads to more frequent and more intense flooding. As these risks intensify, public funds will often be used to protect communities. Recent work done by economists estimates the amount and distribution of benefits from a major form of public flood risk adaptation, flood control levees. A levee is an embankment built to prevent the overflow of a river. The efficiency and equity implications of levees were investigated by […]
World Energy Outlook
On October 24, 2023, the International Energy Agency (IEA) released its annual report, World Energy Outlook (WEO), to an international audience. The agency states that the energy world “remains fragile but has effective ways to improve energy security and tackle emissions.” Agency analysts looked at how close the countries of the world are to meeting the objectives of the Net Zero Emissions by 2050 (NZE) Scenario, which limits global warming to 1.5 °C, a goal signed by many countries and often referred to as the Paris Agreement. [As of March 2021, 194 states and the European Union have signed the […]
The Role of Insurance in Recovery
Climate change is bringing on events, such as hurricanes and wildfires, of greater severity and frequency than ever before. How does insurance help communities rebuild? What economic barriers arise during recovery? Is insurance the best way to provide disaster relief? These are some of the questions tackled by Carolyn Kousky of the Environmental Defense Fund (EDF) in her recent book and research. She is a co-editor of A Blueprint for Coastal Adaptation and author of Understanding Disaster Insurance: New Tools for a More Resilient Future. On October 19, 2023, Carolyn Kousky, Associate VP, Economics and Policy Analysis at EDF, gave a presentation on […]