Lord Nicholas Stern (London School of Economics) – Climate, growth, development and stability: economics and public policy for fundamental change

This seminar will discuss the urgency of tackling climate change, the potential in a new approach to a cleaner, and more resilient form of development, and the importance of investment and innovation in this new story. It will also highlight the challenges to standard public policy and economics in analysing policy and identifying actions. Key features of the climate problem, including the importance of extreme risk, intertemporal values, and the dynamics of fundamental change, are not captured by traditional economic growth models of the 20^th century. A new, 21^st century story for growth, development and stability will see investment and innovation play a central role in transforming systems (including energy, transport, urban, land use and water). To deliver this, a mutually reinforcing package of policy instruments employed by different actors is necessary to tackle multiple, overlapping market failures. Policies not only tackle multiple market failures but must also be ‘predictably flexible’ and credible over time to shape expectations, encourage investment, and set direction. Finance is both a critical enabler and catalyst for change: all forms are needed, including domestic public resources, international and multilateral public finance, and mobilising private sector finance, national and international. Deepening international collaboration is essential to reallocate resources from harmful and risky activities to positive action where opportunities are strongest, financing needs are greatest and vulnerabilities highest. Within this matrix, central banks must aim to facilitate a successful transition within the financial sector and respond to real and mounting shocks to the economic and financial system. Important steps for these institutions include focusing on the quality of transition plans of regulated firms, committing to climate neutrality in their own operations within timeframes required to meet international goals, and integrating action on climate change with that on biodiversity and other environmental processes.

Date:
Friday, October 8, 2021, 12 p.m.

Venue:
Oesterreichische Nationalbank
Otto-Wagner-Platz 3
1090 Vienna

or Online via Webex

Please contact the event managment by October 6, 2021 at the latest to receive a personal invitation.