Grants / Projects we are funding

Bringing Realism to the Economics of Climate Change – ISRS of UCL

Grant details

Amount:£197,400

Awarded on:02/09/2019

Duration:1 year

Status:Live

Area of interest

Systems change

Themes covered

New economics

Economic models dominate humanity’s response to climate change. These models omit the role of energy in production, while in fact, nothing can be produced without energy, and waste from energy use is the primary cause of climate damage. Complex dynamic models are needed to capture these effects, and at the same time, these models must be understandable by non-expert policymakers if they are going to affect our policy responses to global warming. “It takes a model to beat a model”

What will the project try to achieve?

The project will
(1) incorporate current work of Keen, Garrett & Grasselli to develop energy-based models of production into the Open Source system dynamics program Minsky, (2) improve the user interface and engine of Minsky to make it easier to both design models, and to present their results to policymakers, so that they can better understand the dangers global warming presents to civilization
(3) develop documentation to make the unfamiliar system dynamics methodology behind Minsky easier for economists to model the economy as a complex system, as well as for building integrated economic-ecological models for climate change analysis.

Who might be interested in this project?
Everyone from global leaders and senior policy makers to broad youth-based movements such as Rethinking Economics and Extinction Rebellion. As the seriousness of our climate predicament becomes increasingly obvious, this new modelling will serve as a way of understanding the dynamics of the ecology-economy complex, and as a way of motivating policy changes to properly address the dangers of climate change. At a time of great turmoil about how economics should be done, this will provide a tool for a new generation of economists to use to model the economy as the unstable, dynamic, monetary and ecological system it actually is.