Economics

For the first time ever, food and agriculture took center stage at the annual United Nations climate conference in 2023. More than 150 countries signed a declaration, committing to make their food systems – everything from production to consumption – a focal point in national strategies to address climate change. While the declaration is thin on concrete actions to adapt to climate change and reduce emissions, it draws attention to a crucial issue. The global food supply is increasingly facing disruptions from extreme heat and storms. It is also a major contributor to climate change, responsible for one-third of all greenhouse gas emissions from human activities. This tension is why agriculture innovation is increasingly being elevated in international climate discussions. Farmers work in a field during monsoon rains in Madhya Pradesh, India. Rajarshi Mitra via Flickr, CC BY-ND At presen...

Weather forecasts have gotten quite good over the years, but their temperatures aren’t always spot on – and the result when they underplay extremes can be lethal. Even a 1-degree difference in a forecast’s accuracy can be the difference between life and death, our research shows. As economists, we have studied how people use forecasts to manage weather risks. In a new working paper for the National Bureau of Economic Research, we looked at how human survival depends on the accuracy of temperature forecasts, particularly during heat waves like large parts of the U.S. have been experiencing in recent days. We found that when the forecasts underplayed the risk, even small forecast errors led to more deaths. Our results also show that improving forecasts pays off. They suggest that making forecasts 50% more accurate would save 2,200 lives per year across the country and would have a net value that’s nearly twice the annual budget of the National Weather Ser...

Southeast Asia’s Mekong may be the most important river in the world. Known as the “mother of waters,” it is home to the world’s largest inland fishery, and the huge amounts of sediments it transports feed some of the planet’s most fertile farmlands. Tens of millions of people depend on it for their livelihoods. But how valuable is it in monetary terms? Is it possible to put a dollar value on the multitude of ecosystem services it provides, to help keep those services healthy into the future? That’s what my research colleagues and I are trying to figure out, focusing on two countries that hold the river’s most productive areas for fishing and farming: Cambodia and Vietnam. Understanding the value of a river is essential for good management and decision-making, such as where to develop infrastructure and where to protect nature. This is particularly true of the Mekong, which has come under enormous pressure in recent years from overfishi...

Rising trade tensions between the U.S. and the European Union, two of the most important global leaders when it comes to climate policy, could undermine key climate initiatives of both governments and make it harder for the world to put the brakes on climate change. The two have clashed over the 2022 Inflation Reduction Act’s requirements that products be made in America to receive certain U.S. subsidies. The EU recently announced plans for its own domestic-only clean technology subsidies in response. The U.S. and EU also now have competing carbon tariff proposals, and these could end up undermining each other. In December 2022, the EU reached a provisional agreement on a carbon border adjustment mechanism. It will put carbon-based tariffs on steel, aluminum and other industrial imports that aren’t regulated by comparable climate policies in their home countries. The Biden administration, meanwhile, proposed a “green steel club” of nations that would coo...

Herman Daly had a flair for stating the obvious. When an economy creates more costs than benefits, he called it “uneconomic growth.” But you won’t find that conclusion in economics textbooks. Even suggesting that economic growth could cost more than it’s worth can be seen as economic heresy. The renegade economist, known as the father of ecological economics and a leading architect of sustainable development, died on Oct. 28, 2022, at the age of 84. He spent his career questioning an economics disconnected from an environmental footing and moral compass. In an age of climate chaos and economic crisis, his ideas that inspired a movement to live within our means are increasingly essential. The seeds of an ecological economist Herman Daly grew up in Beaumont, Texas, ground zero of the early 20th century oil boom. He witnessed the unprecedented growth and prosperity of the “gusher age” set against the poverty and deprivation that lingered...