Christian Reiner, senior researcher at LBS, was invited by the Carinthian Economic Society (Volkswirtschaftliche Gesellschaft Kärnten) to deliver a talk on the economics of climate change. About 100 visitors attended the talk on October 3rd 2019 in Klagenfurt, Carinthia’s capital. Mr Reiner stressed the economic case for ambitious climate policy as well as the chances for business. For instance, the Stern Report, one of the most prestigious studies on climate change, finds that climate policy will cost about 1% of global GDP, whereas the costs of climate change in the absence of climate policy are expected to be about 5-20% of GDP. If climate policy is enacted in a smart way, it might even be a boost to economic growth because of the vast investment needed to redesign our infrastructure for a post-fossil world and due to a change in tax structure which reduces distortions in incentives to work and invest. In addition, the necessary decarbonisation of our economic system opens new opportunities for “green” firms in different branches and regions. New business models and new technologies are needed to align high levels of social welfare with the ecological boundaries of our planet.
While ambitious climate policy has the potential to increase global welfare, doing nothing and waiting is clearly a way towards economic disaster. Gladly, an increasing number of firms have already started to change their business models but decisive policy action is needed to make green investment a value creating option for even more firms and people.
Please find the presentation slides here (in German).
Dr. Christian Reiner at the Carinthian Economic Society, ©VWGK