Bongiorno Bongiorno tutti wanna dominica mo na Festa della repubblica italiana siamo OG increasing contra para para Larry del climate change kana inot lecture that professor store model Tito Loper que la strada Bayonetta Sara Ellis tricot idibon intention in La Strada piripi Anita Sara same ROM bellissimo Tito lo con una jo Cody parole in italiano que espero que pasa Rizzo nella traduzione present Oh Brava mint el profesor service storm a Annette Kay lor Gannett already quest event Salva storm Nicola mr. Olin Daisy the left University of Technology CIO Cupid was your Koopa prevalent meant the macroeconomy Amato interesante perky known a specialist on a comedy a vocalist righto Amado specialists across or climate change or Manolo estado applicable in de la sua vision Ella Bharata curso de la cerca scientific Casula macroeconomy azure Progreso tecnológico sweet Amidala distribute Sanada readyto sweet Amidala finanza pública in italia esta tumult elector sentiment a per-unit eco loss Julia fatty del austerity Schewel economy ax Italiano molto Latonia senti to a camel toe the scooter a solar Polly question e de los be Lupo della della Christopher Lepanto a desk a momento climatic Oh ina tele Institute for new economic thinking ok hospital organized a hospitalist event Takamiya prevented a festival del economía koala Leticia Opera last a satyr for the new economic thinking pero una visión a critic Adel economía SP de la suggests a conventional quindi see propone a pro pro bono deli de mi piace molto law remote okay Laconia deli Servier luminita Casa di quiz personally LeZion II the economy mode to the crispest on led economía amnio pereira she alone taniyama Vangel elemental time' do G per Kelly born in 10 Sione Elora provided to to the component Nemea born intención a penso que una discussion fundamental siamo to t Cascione discussion fundamentally probablemente no string country no structural economía in questa momento in questa contest Oh story code Oh Reba sorry for collegiate Oh solo supuesto degree Mopar lorida scooter a little air a proper resolution EDA leader see solla sollew Sione solo supuesto a finales are a Yankee real ed Jerry Tootie nostri problemi Anka Poisson te amo reddit a total Passat Oh Perla Punto la situación Adele degli no economic italiano El Paso del DeVito público el problema demographic opera oriented Inc well okay actual Mentalist adapt importante que llamo different invasion si como va mo cuando vediamo irrigate CD quindi Sonic fan no El loro shot arrow parappa dopo return llamo dentistry discussion abit walaikum c4 say uno date mi chiamo different anon quello doc we depended on austra so providence' supra to toe space we discourse of cameramen to climatic oh so no sulla discussion a chat on chair he static encore de no no Concord Alec windy question a geopolitical MN OC Arizona soda straw men T del economy Azul in Pato Sewell economy escucho secede encuesta finestra de tiempo que abbiamo ek coma sadira professor storm assisted Akkad and oh la cosa kalle cosas que commentary mo en para Ryoji so no a cake on DC oniy in cocky condición echoes Adobe amo pagará K coast oh ah ah frontier quest agrandi de la petit Bois de la koptelin - no del they do a un grado meadow - a grad the temperatura sempron objetivo piccolo my own objetivo que una revolución pearl economy hacen una disruption cheese Arabian a disruption molto for importante commit in this cushy on el modo de la producciones consume all institute Sione in consents la la nostra la nostra Cumberland Sam Adobe amo afferent allah la prose okay sentir mo da service torn approach okay no con shed illusio Nancy Louie contesta una visión a dual Kurata del del SPD kablamo different sostiene aquella Punto La Strada their left facto cell therapy Anita Sarah price risk al d'amato DP Anita last ricotta di Bona intención say LuPone intentional moto a que la strada berlin fair no last ricotta di Bona intención e ek quail ambiental a una vida que con porta yuna revolución a coma deceive a quasi una la revolución Anana UN prawns illegal Allah cheeseburger wrapper que professor store Marquita dura berola yes thank you very much for your very elaborate introduction not just to my presentation but to my let's say to the my broader work I'm very happy to be I'm very grateful to the Institute for economic thinking and attend to first Festival for inviting me and today I am going to speak about a paper which I wrote jointly with my colleague a no-show later on let's say climate change or the economics of climate change and the tight the paper is titled like why the road to hothouse earth is paved with good intentions and the presentation has a twist because in addition to speaking about to give in addition to what I see as my take on the state of the climate and the climate economics I'm also going to talk about the economic structural side of it and maybe the political side of it that is climate change policies in especially the OECD economies osed economies which are growing more and more polarized and I call those polarized economies dual economies yeah I will come to that at the end of my talk now to start off the talk I first want to sort of tell the story and that is also because I heard that the young scholars of inet have been working on trying to use popular literature in work or their presentations and since my name was mentioned there I think I have to sort of try and do justice to that reputation so I will not talk about the hunger games I want to refer to another book very recent book by an American novelist called nay Tom Hill and the book is called the Knicks it's an enormous ly thick fat book and I will not speak about the book itself I just want to highlight the title the Knicks the Knicks is ni8 X it is a supposed to be a Norwegian metal metal mythical figure actually sort of ghost and that ghost can take different shapes and it what the ghost does is sort of it tricks people it seduces people to do things which are wrong and one of the forms one of the shapes this snakes takes is the shape of a very beautiful and powerful horse and one day a Norwegian boy goes to the sea to the cliffs and he meets this horse a horse he doesn't know that it is a Nicks but he thinks it's a most beautiful horse in the world and the horse is very friendly and basically invites him to jump on and ride and the boy is very anxious and reluctant and he doesn't want to I mean he's fearful he thought he thinks what's what to do but he does it and then the horse starts a very smoothly gently walk a little bit faster and the boy gets courage and he becomes more confident and the horse goes faster and even faster and at some point this young man becomes utterly excited and he thinks that he is actually right and riding the best possible horse and he must be the best possible rider in the world I mean he's sort of the master ride the master of the universe and right at that point when he thinks two things that is he is in control and he is really doing something excessively superior to what other people do right at that point when he becomes arrogant and so on the horse jumps off the cliff and the boy dies yeah so what is the story what has the story to do with the talk today I think things are the two things I mentioned that is this notion that we are in control we are talking about climate change and there is a very fundamental issue of being in control of climate of climate processes of environmental processes in general and I think we have a sort of false consciousness a sort of fake idea that we are in control yeah we can actually sort of let the temperature go up by one or two or maybe three degrees and still be in charge that is the that is one sort of thing which corresponds to that story and the other part is sadly the fact that the story didn't end well yeah I mean there is a big big risk that the story of climate change is also not going to end well there's you bliss there is arrogance there is this fake consciousness that we are in control and I think this is sort of a very telling example of yeah where we as humans have to be more honest yeah actually I put as a motto to the paper and then I will start with my talk that I think it is a quote from Ludwig von Wittgenstein that nothing is more difficult than not to deceive oneself and I think that is one of the issues yeah I'll first speak about climate change I will not necessarily go into the let's say the climate or the physical side of the climate of what off climate change but we know that the fact that we have after 1800s have been dumping massively carbon and other greenhouse gas gases into the atmosphere where they are absorbed the concentration of carbon and greenhouse gases in the atmosphere has increased over time and we know from science that this is associate it is leading it is causing a gradual and not totally predictable increase in the global temperatures over and above what would be the natural pattern of global temperature change yeah this is called enhanced climate change and hang the temperature increase that's a cause bye-bye economic and human interventions that is concerned production transportation travel consumption we are all we all emit carbon and the carbon ends up in the atmosphere it forms a sort of a blanket it stays there it's sort of a blanket the earth is wrapped into in an in a blanket with increasing atmospheric concentrations of carbon carbon the blanket becomes thicker and that more and more warmth the sort of traps under that blanket and that is that is the process of global warming I just have the graph here of carbon and we know that it is sort of due to growing and growing carbon emissions this is the first graph which shows drawing carbon emissions and you can see that it is still rising the red share is the Chinese contribution to global carbon emissions and I think the light bluish share is the US share and I mean there are all these stories about China being the biggest carbon emitter yes that's true but if you calculate this per person China is not by far not the biggest carbon emitter I'll come back to this the other part of the graph is average temperatures and if you look at I mean this is the 10 hottest year years on on historical record and actually the five hottest years were the previous five years yeah I'm not sure whether today or this year is going to break the current record but it it might very well do so yeah let me oops yeah okay let me go to the problem setting I think the problem setting is this that there is what climate science is telling is is that if we continue on the current business as usual path atmospheric concentrations of carbon will increase to such an extent that the process of global warming becomes an control and controllable unstoppable yeah there are thresholds there are all kinds of cascading effects I don't go in I would I don't want to go into all the details but there is a consensus that we should limit atmospheric carbon concentrations in order to keep the increase in warming the increase in temperature to less than two degrees or even preferably to less than 1.5 degrees compared to the average global temperatures around 1800 let's say yeah that although I mean the climate change itself is already having impacts on biodiversity and so on I don't think I have to go through all the details of this yeah so there is a risk of unstoppable uncontrollable climate change the further problem there's a next problem is that the problem is that the time limit the time window for climate action that is for trying to slow down slow down warming is the time wind is not very large yeah we are emitting about let's say 40 gigatons of carbon each year the view the general view is that the remaining carbon budget that is the amount is basically the amount of atmospheric space which we have to dump carbon I mean to dump carbon in is is about 400 the Giga Tom and if you take the ratio of the two you will see it's about 10 to 12 years if we continue to emit 40 gigatons it is about 10 to 12 15 years and we are actually we have raised atmospheric carbon concentrations to such a degree that there is no it is it becomes very likely that we cannot keep global warming to below 2 degrees and then we and what in it in Latin may be in Italian as well is called terra incognita yeah we don't know where we will where we will end up yeah it is true that the carbon budget this notion of 400 ton or 400 gigatons is itself uncertain some people say there is actually zero or negative carbon budget left which means we are already on going down on the road to hothouse earth there are people are saying it's much bigger 800 tons 800 gigatons i I think that discussion is maybe not so interesting it's it's 10 years maybe it's 20 years but the way things are going even 20 years is not very long yeah the so we have climate change we have a time limit and then in addition we have a very interesting and also problematic difference of views yeah there are climate scientists who act like Cassandra that is basically predicting disaster and let's say especially economists and also many policymakers who are not totally trivialize the problem but who argued that the problem is not so urgent as the climate scientists are making out yeah the there's pessimism in the climate science community you could say how can we stop mean things are going wrong how can we stop it the approach by economics or economists is different it is very much in the sort of attitude of this boy riding the Knicks we are in control yeah we are in control I am citing president former President Obama who is saying that yeah I mean the economy is growing but we also dick up the u.s. is decoupling emissions are going down while the economy is expanding so look we are sort of solving we are quite ahead in solving the problem and then we have as an example the 2018 Nobel prize-winning economists Yale economist William Nordhaus who is a very famous sort of very sophisticated climate climate economist but his models I'll come to it later his models also caution they basically say yes there is a problem climate change is happening but it is a gradual process we can control it actually we can optimize it we can find the optimal path and the optimal path from an economic point of view is to go very slow on climate action that is basically we can afford to not take much action now but by 2030 and maybe by 2015 we have 50 we have to become more serious so there is time yeah it's not sort of a big big a problem okay that gives rise to my questions we had all the climate conferences we have all good intentions in the Paris agreement some governments are really negotiating on their good intentions so basically saying we are going to withdraw from the pair but anyway there are good intentions but then the questions are okay what has been accomplished so far that's the first one the second one is what will be needed if we want to keep warming down to less than one point five or two degrees the third question is can we do it is it very costly or is it technically technically not feasible and suppose it is feasible how do we do it what kind of policies do we need yeah I will first guide you to the first to what my answer is to the first question what has been accomplished so far well I think the picture is not too rosy yeah not I mean we saw in the first graph already that emissions are continuing to increase for the globe for the world and if you look at if you look at those in the the changes in emissions over time in a more detailed manner and you can do that using the so-called kaya identity then it make it more nuanced or big a clearer picture becomes comes out of that now the kaya identity I will not go through the exact equation but the kaya identity is actually saying that global image the changing global emissions can be decomposed into let's say what we can call a scale factor that is the population how big I mean more people means more economic production means more emissions then income per person there's also scale factor that is the richer the we are the more we consume the more we use and consume a carbon intensive goods so the more will be emissions so the two population and GDP per person concerned scale and then the other two factors that is emissions per unit of energy that is that is carbon intense intensity of energy supply and energy per unit of GDP which is sort of the energy in intensity of of the economy of of income those two factors have to do with technology yeah I mean there is a so we have scale and we have technology now let us look at what has been achieved so far and okay we have a detailed pic table I will not go through all the numbers but you can see that throughout the period 1971 to 2015 global emissions total global emissions have been growing at 1.9 percent per year these are these the numbers are average annual growth rates yeah the the driver the main driver of global emissions is the scale factor that is population growth 1 and growth of the economy that is growth of real per capita income taken together they I mean the scale factor would have on its own would have led to an emission growth of 3.4% we are much higher than what it actually was but this is like the push which comes out of the the growth of the economy you could say then the scale growth scale factor growth is offset partly by technology especially by improvement by reductions in energy intensity per unit of GDP so we the world has become more efficient in terms of using energy and creating income per unit of energy and you can also see there is this very small minus 0.5 there's a very small reduction in the carbon intensity of energy supply so okay that is also a little bit of decarbonization but it's very it's it's not very strong the table also gives information for the OECD and for China you can see that emissions total emissions in the OECD are also growing still going yeah it's not at BR that emissions are declining that the emission growth in China is 5.7 3% per year for a period of 40 so many years and that is quite the big number it is mostly driven I mean if you look at the China especially you can see that it is mostly driven by the scale factor that is economic growth and China has done a remarkable job you could say in improving over time the energy efficiency of production that is the energy intensity per unit of GDP has come down by almost four percent per year which is much higher than what the OECD countries managed to achieve okay low-hanging fruit and so on China could do it but they do it the problem is carbon intensity is not coming down and the scale I mean the Chinese economy is is growing enormously yeah now this suggests that the decoupling let's say the decarbonisation is not happening in a strong enough way decoupling is not so clear these are average numbers so we can also look at country numbers country's specific patterns and we can ask the question has there been decoupling yeah the question could be is Obama correct in assuming that there is some evidence of however reasoned of decoupling now to do so we make a distinction between two kinds we measure carbon emissions in two ways one is production based carbon emissions and the other one's consumption based carbon emission emissions and the difference is sort of very straightforward production based is all the emissions happening in Italy within the borders of Italy in a particular year and consumption based emissions are all the emissions associated with average consumption levels in Italy that is with the good bit with the goods produced and consumed and that includes many goods which are not produced within Italy but which are exported from China or whichever country yeah so the difference is that if a country let's say some countries I'll go to the next slide let's say in general it is true that there is richer countries have outsourced industrial production to China and other Asian countries on a massive scale and not outsourcing industrial manufacturing production is not just outsourcing jobs it is also outsourcing carbon emissions so the carbon emissions are happening in China and not in Italy or the US yeah so what happens is for the rich countries these country consumption based emissions which is emissions associated with standards of living tend to be higher than production based emissions we have cleaned our economy by basically a shifting carbon intensive production to other places yeah and the reverse the other vice-versa the reverse holds true for developing countries like China and other China and India their production based emissions tend to be much higher I have a table to illustrate this the first column gives the difference between consumption based emissions and production based emissions in the year 2011 and you can see that it is quite like for Germany which is known to be very Pro green and so on the consumption based emissions are nevertheless or nevertheless are 11 percent higher than production based emissions yeah and for UK it's it's it's huge for Italy it's also huge and China India and South Africa have a minus sign which means production based emissions are higher than the consumption based emissions the second column is just there for a little bit of sort of is there for purposes of reality check that is it is basically the consumption based carbon emissions in different countries per person I forgot to put per capita or per person but it is per person compared to average per capita co2 emissions in the US and what you can see is that in most let's say in most European countries per capita carbon emissions are about 50 percent of us carbon emissions and if you compare it to India and China you can see India is really almost pathetic like 8% of us emissions per person and in China it's about 28% yeah so per person we have a huge difference here and it also made meeting that if the US could manage without sort of really losing in terms of quality of lifestyle or whatever to reduce its emissions down to the level of the EU that would already save a lot of carbon but anyway that is a that is a specific issue yeah so what has been what is the avenues so we talk about decoupling and production based emissions and carbon-based emissions people who want to know more about it can go to the paper which is an IEEE networking paper number 84 it's available on the IEEE net website it basically presents an econometric investigation of what is called the carbon the carbon kuznetsov based on input-output data it is sort of relatively long term it has many I mean it has all these different industries and we also use four different good sources on input this not just one input output source we have multiple sources and we estimated that we try to test whether there's there's decoupling or no decoupling now let us first look at production based emissions yeah remember that production based emissions are lower in the rich countries because we basically have exported our emission our emissions now in if we use production based data on emissions and and data on per capita income we find with with the sample for 40 countries for 1995 up to 2011 and actually we have updated the analysis to 2015 and there is not much of a difference we find that there is decoupling so yes once income income incomes increase but then at some point there's a turning point and with higher incomes emissions per person go down but the trouble is that the turning point is reached only at very high levels income let's say 56 thousand dollars but that is in 2005 crisis and it basically means that the turning point is useless for purposes of thinking about climate action or climate policy because if we if we let economies grow and reach that turning point we will definitely go beyond the available carbon budget and we are definitely going down much higher warming than two degrees yeah the numbers are given here I don't go into the specifics but it is like there is a turning point yes but for all practical purposes it is not very useful now if we go to consumption based emissions the story is really different and I think consumption based emissions are more relevant that is standards of living this is what we actually use and consume including all the goods produced in China with all the emissions happening in China I mean we are buying those goods then what we find is there is no decoupling at all yeah it's just a linear I mean higher income means per capita means higher emissions per capita and this goes this goes on into infinity it seems yeah there is simply no evidence of decoupling which means that if we take seriously consumption based emissions it turns out that Obama is wrong but we it's not good it's not good news what it means is as I wrote in bigger letters is that yes I mean we have to change we have to make we have to do things differently the future has to be different we cannot sort of say okay let's continue with current patterns there has to be something drastically happening let permit me to say one more thing about the scale effect and why the consumption based emissions are not decoupling I mean I think we all recognize this pattern I mean I'm old enough if I go back to when I was young I think most people were buying the most families were buying their first television the set it was not a set it was just a very black and white thing and everyone is very happy with that thing now and I think it's very clear that over time the energy efficiency of television screens has become much better much higher I mean at the same time I mean I think we had a television screen which was maybe 40 by 40 centimeters or something and now people have flat screens almost 4 which could be used in a cinema and it's not just that they have one I mean like this and it's not that they have one flat screen in their home actually they have decorated all the I mean the kitchen has a flat screen all the children's rooms have I mean I don't have a television to be honest if I walk my dog in the evening I can watch all shows the the news with with subtitles just by looking at through the windows of my neighbor's yeah it's like now that is this is the scale effect yeah this is so the the television set has become more energy efficient but everything has become bigger we go for electric electric cars fine I mean that is probably saving some emissions but I have not seen a small Fiat Panda electric car I only see huge electric cars maybe they may be the weight is sort of me the material is also good but anyways it's like the scale effect overrides any gains we are making in efficiency and carbon intensity and I think that is a very very important point yeah so the future has to be different now we also in the paper we also look at the future and I think I would defend that we take a very very optimistic view of the future that is we use the kaya identity we take for as given we say ok let's suppose we want to keep global emissions to a level which is still compatible with two degrees not 1.5 so it's two degrees and so we know what the image reduction target ease then we make very optimistic technological assumptions like the increase in energy or the decrease in energy intensity is 2.7 percent let's say which is double what has been achieved so far and for decarbonisation we basically assume there is a guess if decarbonisation at a rate of three point seven percent well in reality the rate was one was zero point was 0.15 percent yeah so this is like a very very optimistic scenario there is no reason to assume that this will happen but the International Energy Agency agency and the OECD have scenarios and way in which they make these assumptions and they apparently I mean they're experts apparently believe that it is possible now what do we get if we I mean the question we then ask is how much economic growth at this scale how much how much can the scale of the economy grow if in a such in a very optimistic future in which technology is not really a problem because we are we have very aggressive decarbonisation and very strong improvements in energy and intense energy efficiency now the problem is that the economic global per capita GDP growth which comes out is very low yeah I mean it's pointed the number is 0.45 percent it's basically zero it also means that rich countries clearly cannot draw if two countries developing countries need to grow yeah so it also immediately opens up a box of conflicts between rich and poor or industrializing and post-industrial societies yeah I am NOT saying that this is rocket science I'm just saying that just for imposing consistency on the numbers which is I think something which the International Energy Agency is not necessarily doing but we do it we find that the potential that's a climate constraint or global warming constraint rate of economic progress is not very low and historically speaking I mean if we go look at the past two dead two centuries it will be a problem yeah it's it's a new it's a new setting you can also mean you can also argue it will not happen I mean the economy will grow more than this yes but the result will be more emissions and it will not slow down or stop warming okay now some good news yeah that is the scientists climate scientists with also engineers I work in the University of Technology so I regularly talk to engineers they have a very very strong can-do mentality and dating I mean they still think that even though we have 12 years left it can be done yeah I mean they know all the all the things phasing out coal that's immediate scaling up renewables strong measures to increase energy efficiency in all kinds of activities decarbonisation but also changing consumption patterns yes very problematic no air travel less meat consumption I mean all these things are maybe necessary and then CCS is carbon capture and storage so I mean a whole package I mean you can call them veggies veggies or you can call them so many things but there's a whole package of things which if you combine them they will they could in principle take care of reducing emissions at a pace and at a rate compatible with let's say D at one point five degree warming target yeah now then we come to a problem and the problem is that most economists not all but many economists are are actually not so positive about aggressive decarbonization aggressive climate policies so I mean it's not about north house but he is very prominent also in this area and he's basically saying that from an economics point of view I guess if climate action decarbonisation is not socially or economically optimal and the argument is basically that this the argument I've some summarizes argument in four points it's basically we need to invest in higher cost energy sources and all kinds of adjustments these extra investments need to be financed that requires in his thinking extra savings the extra savings reduce today today's reduced consumption today so it's basically like we have to invest for a better future and we are paying this out of our pockets by reducing consumption so it is there's a welfare cost to it the savings then the argument goes are not very well used because we can also invest them in other sources we can grow our economies we can even maybe put them in the bank and get a higher rate of return and if we do that we become richer over time more wealthy and the bigger income the the more the increase in wealth let's say by 2050 then allows us to pay for climate action and in relative terms that is compared to our level of material standards of living the climb the cost of doing this is is relatively small smaller than when we start to do it today yeah that means that in some although it is it looks like intuitively incorrect and climate sciences scientists are also arguing against it from the economic point of view the optimal strategy is to go rather slow on climate action and maybe not do nothing but sort of introduce a carbon price or carbon tax and very slowly increase it from let's say $20 per tonne of carbon now to 50 dollars by 2050 to whatever $100 in 2100 yeah so there is a there's a climate policy but it's basic there's no not no sense of urgency again it takes me back to the Knicks because it is it is this there is this idea that we are actually still in control yeah we are sort of at a desk playing a game how do you call that thing with the joist this thing you used with gaming I mean a keyboard and you press buttons and you're still in control I think we are not yeah okay now I think there are major major prime not the only one but I think there are major major problems with this kind of argument in a nutshell you could say it is simply too mechanical to deterministic to March taken by a false idea of of being in control yeah let me go quickly through the five points of critique one is most of these climates impact assessment models basically ignore the possibility of very small probability of catastro of very dangerous catastrophic climate change it cost their damage functions in these models and these models basically the damage functions do not allow damage to be absolute let's say huge it's like it's still all doable the models are also very generally quite linear they do not have self reinforcing mechanisms of cumulative causal causation like okay we get after the threshold we get endogenous processes which reinforce global warming and which are unstoppable and they also think that climate change the cost of climate change can be reversed yeah I mean if climb if we allow temperatures to go and this is very simple argument if we allow climate change to warming to go up to two point five three degrees by 2050 in the process we become richer and by 2050 we can on average we can actually we can pay better for the climate policy investments this is all true but it is the average and outside the average there are real people whose lives have been ruined and real people who have actually died in this in this next during the next let's say 30 years and these people have no way of getting compensation or doing things to sort of revert to a situation without climate change so it's it's it's all based on this smooth gradual very mechanical process so it is also a fallacy of false precision you could say there is a big issue I think most people would know about which social discount rate to use Nicholas Stern has famously argued for a very low social rate of disc social discount rate north house is changing his discount rate all the time lowering it but not to one percent as the stern committee has done so there is also some sort of a bias in north houses work as it concerns the rate of discounting the fourth problem is not so widely recognized but it is a problem this whole notion that you first have to save in order to finance your investment is problematic to start with yeah I mean you can actually finance it by taking bank loans and if these things work out you can you can pay back these loans and you don't necessarily need to save yeah this is a very kind this is not mmt but this is simply a very very Keynesian argument that banks pre finance investment investment leads to incomes incomes create savings and banks get their money back yeah this is not radical in that sense but it is something which the model does not allow and then point five is that the model also assumes that all the money we are spending today all that money is very wisely prudently and efficiently spent which is also something of a problem yeah I mean I think if you just think of all the cash in all the money which goes into not so productive financial instruments I think it is sort of fair to say that there is money floating around which actually could be used the point is we can't get hold of that yeah so that brings me to the next slide that is also something which I want to emphasize that is I think most people would argue that if we try I mean the hope the the budgetary cost global budgetary cost of trying to keep warming down to less than 1.5 degrees is not excessive yeah it is about maybe 3% maybe on the high side four percent of global GDP that is a lot of money but I mean as a percentage of you're off of income it is not so much yeah and especially it is not so I mean this is something which we have to invest and mobilize each and every year but it is in my view clearly a bargain it sort of worth it because we can actually prevent potentially disastrous outcomes yeah so this is let's suppose it's 3% it would be about 2.25 trillion dollars maybe it's a bit more but that that that's it yeah and then the question is can we do this can we sort of find funding I just compared this 3% of GDP to actual uses of what how how we spend our money well there is global military spending very important I don't think we can cut it actually it all looks like I mean so Saudi Arabia needs to have this I mean it's very important for them so there is this this thing that that it looks like almost necessary expenditure I mean we we may disagree but okay it's quite quite a lot yeah it's not so useful it's very destroy em it's also disastrous spending but anyway very interestingly the fossil fuel industry is getting huge amounts of implicit and explicit subsidies and the number of 5% of GDP which is five points eight trillion dollars is not my whatever radical estimate this is actually from a very very solid international institution named IMF yeah so it's their estimate of what the what governments are paying implicitly and explicitly directly indirectly now there's also tax evasion by big corporations and because of tax evasion or offshoring tax havens governments are missing out on also let's say one point one point two trillion dollars a year this is some sort of an estimate yeah I mean I just in the Netherlands where I come from there's a big discussion because one of our biggest and most historically sort of prominent corporations is the Royal Royal Dutch Shell and actually it turns out that Royal Dutch Shell even though it has its base in the Netherlands is paying zero euros of profit or corporate tax in the Netherlands I mean they are paying taxes elsewhere they stick to the legal loopholes or they say legal rules but they so for the Dutch I mean it's like zero they are not paying any profits tax on their profits so that brings me to some sort of a summary interim intermediate summary that is I think we see that if we take the even a highly technical area green growth is sort of hardly possible and if there's no growth it basically means that we end up in a world in which we have to improve outcome not by growing not have growth for everybody but what we can do is we can have growth for some groups but that means no growth or D growth for other groups so it's a distributional issue it need not be a distributional conflict but it clearly very easily is a distributional conflict it is not just a conflict between the current generation and all future generations it is a conflict between today's generations and now I come to the I mean I have to switch from the climate thing to the dual economy because I think this is occurring in a situation in which our I focus on the OECD countries in which the OCD countries are having problems big problems even if we don't talk about climate change and the big problem is that these economies are experiencing growing inequalities polarization in jobs you could say you could talk about the vanishing middle class or the squeezed middle class you can also talk about what what what I did in the paper about the dual dual economy yeah what is the what are the causes of these of these of the tendencies of polarization between a group of people with high incomes dynamic they work in dynamic sectors their jobs are often very strongly protected they have all kinds of good facilities good pensions and then we have a big group of people sometimes called the precariat sort of not while facing different challenges and what are the causes of this polarization or the growth of the dual economy well I think I mentioned I listed three one is technological progress often mentioned globalization and the third one is policy now technological progress is much hyped it's like okay the robots are coming and they are stealing our jobs and now I think that is partly true partly not true it is also an adjustment process it's not necessarily true that these jobs will go forever but I think the adjustment process is very prominent or very very important because there is people are pushed out of let's say more dynamic profitable activities mostly manufacturing and information because of productivity growth and in in a situation in which let me summarize it the social welfare state is not doing its job or has for all kinds of reasons decided to not provide the necessary support these people have to they find employment in many jobs in all kinds of low productive and also low wage activities now so it is not technology bogus itself is not necessarily problem the problem is how do we as a society and also as in in terms of economic policy how do we react or respond to it so far we have responded in the wrong way and that has sort of deepened the polarization globalization same thing I mean you can talk about the benefits of specialization the benefits of increasing trade it's all true but it's also true that it leads to dislocations sectors industries going down sunset industries and it leads to very very strong problems in terms of unemployment sometimes vary regionally focused but also often times more general yeah so this is this is these are very strong processes but I think the number three that is the policy this was actually the most important that is how do we deal with these drivers or with these changes which are to some extent maybe I mean there's there's nothing wrong with neither of them the point is how do we manage them so far we have decided not to manage them which is also managing but it's sort of managing by default and I think we can do a better job yeah the policy has the policy responses all over have been especially scaling down welfare states sort of trying to push creating I mean people will say try and create jobs create employment but it also means pushing people into jobs which are below their educational level which are not very safe jobs which are sort of not well-paid temporary jobs there's enormous growth of temporary jobs and then that is in its in addition to fiscal austerity and stagnant or and very restrictive monetary policies yeah I will speed yeah I'm speeding oh now I think I can do it now in a way I already talked about this slide it is it's the same thing the one thing I want to emphasize that a very recent OECD report was published under the title and the pressure the squeezed middle class and the I think one of the major things highlighted in that report is that middle classes in the OCD feel more insecure economically speaking and they down were the downside risk I mean there is a much much bigger downward risk if you lose your job the impact is going to be much much bigger much harsher than before and that is happening in times when inequality is increasing this graph is basically showing the difference between income growth of the top 20 or top 10 percent and the middle classes and you can see that inequality is growing now in this context of growth growing inequalities and polarization that this dual economy governments in Europe I mean some of the government's in Europe which have gone for climate policies have actually adopted or try to adopt exactly the wrong policies yeah France is the best example McCone tried to introduce a tax on consumers that is exactly those people who are already hurt by the dual economy these people have to pay relatively speaking more for carbon for their carbon emissions than the rich people and this is happening at a time when the taxation on capital and the income is actually reduced so you could say that many people in France feel that the social contract is broken now this is the result that is the yellow vests protest but it actually happened in other countries in my country Netherlands that helped that happened as well the complicity right-of-center government in the Netherlands tried to introduce a carbon tax not for firms but for consumers they lost the elections to a climate denying climate change denying party who was saying it's all wrong yeah now clearly let's say new right-wing newspapers try to stir this up and create a sort of say there's a popular revolt against climate action the carbon taxation is dead in the water because the people don't like it and anyway that is a also an interesting aspect of this there is clearly much resistance to any climate action now this is a list I will not go through the list but there is a list of it's not just the yellow vest protest in France it happens in the US it happens in Germany the alternative a few Deutschland is outspokenly climate change denying I mean they they basically favor coal and in the knot helmet call but brown coal and we in the Netherlands we have the forum for for democracy which is a right-wing populist party growing very rapidly and they also want to get rid of the Paris agreement yeah so it's it is it's all over I mean I could have also included Denmark and it there are many more examples okay so what is needed and that this is almost my final slide what is needed is we rather I mean when the future has to be different and we have to give up the idea that we are riding the horse and we are in control we are not in control the earth system is actually hitting back and it may hit back in ways which we cannot we cannot cope with or deal with yeah it's like very very uncertain and unpredictable so we need drastic action I've made a list basically saying well we have to just force especially cooperations the most 100 most polluting transnational companies are responsible for more than 70% of cumulative emissions since 1988 I mean we can we can make a start there yeah they they can we can try and force them to adjust that we don't do forever our carbon trading that is cleaning up working we need carbon taxes but we also need just direct intervention that is standards and stopping goal and so on maybe we need to hold the corporations accountable and liable for what they do maybe I mean anyway there's a big issue we have to stop the environmentally unfriendly subsidies to fossil fuel industries and then I think what is very important is that we use I mean we try and devise institutional schemes to mobilize funds not just to for the green transition or the green the renewable energy transition but also to compensate the losers the people who are not in the protected dynamic sector that is in the dually we have to take the dual economy into account and we have to go for welfare state redistribution yeah I mean otherwise popular support or popular backing for any of this or any of these measures will not work yeah we have to it is not just the technical issue it's not just an issue of funding it is an issue which involves also trying to sort out a major distributional conflict yeah the good news is that the international it is being recognized there is talk about the renew deal the international labor organization is also arguing that going for clean energy would actually mean could be labor intensive it could create many more jobs and we have calls in the US for a green new deal and we have global if coming from the UM Tufts in Geneva calls for global green you do deal yeah and it is much broader than just mopping up funds to invest in renewables it is it has to do with how we do how do we distribute the gains and the pains and that means thinking in terms of revive not necessarily the old welfare system what we need a revived and maybe also redesigned welfare system focused on compensating people who lose out on this I think it's very very important that we create friends is very very good public transportation which is low carbon or zero carbon I mean how can you tell people not to drive a car when there is and you live in the rural area and there is simply no public transportation I mean that is that's not what I think that's not what we should do in a decent society yeah the the conclusion I will not go through this list it is just that I'm not optimistic I think there is no time or no read we we cannot be pessimistic I mean that would be just giving up giving up I think there's still space and time and possibilities so we have to be realistic yeah and realistic means recognizing I mean that we are not in control of the horse so what we should do is we should be very very careful and prevent I mean the precautionary principle is very important we should try and prevent the worst the risks of the worst possible outcomes yeah being thrown off the horse or being thrown off the cliff this is just the final thing if we don't manage and I mean there are all kinds of reasons to be very very pessimistic this might be part of the story if you are interested that's my final word you I would sort of suggest that you go to the I net website where there is a whole debate on the issue is green growth possible I am on the pessimistic side the people are slightly more optimistic so if you want to if you want if you don't want to end your Sunday morning in a very depressed state it might be good to visit that website thank you very much Congrats yeah that's a process or a profit or a discussion or n'gatu multisim oh no midi to TN k / kv bam oppa abbiamo pong Pecola locality Otto feta Sara not sauce elevator kappa dover Via della Lucy Queenie no purity amento para la complicit I'll a brillant it's a Delos posizione a promenade discussion and Prag thank you for what I thought was a really eye-opening presentations of us I do have two small questions the first you use the example of France and you told me arm but in fact I wonder you know France is getting something like 75 or 80 percent of its electricity from nuclear power and I wonder if you've done any counterfactual calculations assuming that the rest of the world had been less anti-nuclear and more thinking like France and had switched to nuclear power at the same time and at the same rate that France has and which of course also implies why the tax on carbon in France by my crew was so stupid because what they were really should have done is subsidized these people who need cars to buy electric cars because electricity in France is much cleaner that it's anywhere else that long question the other question however goes in the other direction which is more pessimism which is your presentation was entirely focused on carbon emissions you haven't said anything about other hothouse cracking gases and my understanding is that especially the natural gas industry because of inevitable leakage adds substantially to the problem esters of course the production of beef because of cows and other animals emitting methane and I wonder if you added these other things whether it would change the calculations dramatically a printer a ultra ultra demanda such a buongiorno not one day italiano yeah solanki OPC mr. Kemal a perky credo para para frontier Augusto problema CNN Cesario ankarana passionnel additional subpoena their and sense okay collab essential to waste a query across impossible yunkai friend are a charity product Sione routinely army Peleg a very simple a dream Queen Anne de grado KCC a No I call this a very very separate oven Sierra supuesto lat seasonal tree servoz i I really want to congratulate you is fantastic i I think the image that you really want to send everybody on climate change is the boiling frog as you know we are all in the same yeah boiling situation but we're so comfortable and in one day we will all be boiled right yeah I mean this is a really serious issue yeah yeah but the big problem as you know why we have denied it is that there are some people who thinks that if we are all boiling let's see which frog becomes boss first that it were fighting each other rather than concentrating on how to deal with this climate issue and the the point that I really want you to stress a little bit more I think if I if I think I get you right is that we have misspecified the problem as long as economists use the word GDP as the measure of progress we will never price in climate change because GDP does not pricing resource deterioration and in carbon pollution right so actually for the economies to switch their mind from the paradigm you really need to get out of GDP right I mean you know as long as you're using the same paradigm you cannot solve the problem and what you're arguing I'm supporting your argument I'm just okay okay thank you all for your very interesting questions I start with your second question which is I looked at any basically energy generation that is about 75 percent or so of total so it's the source of 75 percent of let's say global emissions but are other sources like transported like sources which have to do with agriculture with land management and with yeah with such such issues and I think you see the it is indeed true that if you take these other sources and some of these let's especially when you talk about different lands like peatland or and also defaults I mean the scale of the deforestation is or the pace of deforestation is so fast that is immediately have M is very it's having a very strong impact on the growth of carbon emissions same with peat lands and so on once this starts to temperature starts to rise it these these not so much used lands start to emit not just carbon but very very much more different dangerous greenhouse gases which are sometimes 20 or 200 times as the potential in terms of global warming is compared to a carbon-carbon tongue it is like 20 to 200 sometimes 200 times more dangerous you could say so in that sense if you include that it's that's all the more the reason to be very pessimistic now I also agree with you on the point of France yes francha France has I think it's about 85 percent or so of its electricity comes from let's say geothermal and nuclear energy and that is sort of very it doesn't emissions are very low now yes some people would argue and I would not but that is not necessarily an economic issue I mean people would argue that you could we could try and reduce emissions or slow down emissions by going for more nuclear energy I find that myself problematic because there is always I mean there is nuclear waste it is it's very very I mean people it's it I think it's basically the same story as the Knicks we think that we can control it and we can't you put differently two things you don't agree but that is why it that is why I said we will not agree on these two things one is I think you need very very strong let's say almost police police state protection when it comes to nuclear power plants and the disposal and transportation of waste and I think having at the heart of your economy in this form of nuclear power plants some sort of a police state type of arrangement is not what I would like to have in a democracy let's say that is first thing in the second point has to do with I think if we are honest or let us let us just look put it like this let us ask insurance corporations companies to insure possible damages coming from a nuclear accident and I think they are probably not willing to do this so it is like with big banks it's the same thing the same thing with too big to fail banks that is ultimately a society the state is on the hook when there is a major accident which basically means that the whole thing is only doable because we subsidize it we basically sort of so I anyway I think I think the cleaner a lot of sources of renewable energy have developed enough to be able to take up most there's always a problem of what they call I mean my university they always talk about intermittency that is there are fluctuations in energy demand and energies why you so you need a sort of Baxter the power production okay but that is not 85 percent on your question yes I think the point of course is that you see that I mean first of all there is a big big economic interest in having let's say military or equal military equipment being built I mean if in a very very uninstaller call historical world in which there were no wars clearly the demand for weapons and arms and tanks and whatever was was was not there and we would not have military expenditures and the way we have I think we live in a time in which conflicts are growing tensions that are building up so it is not very likely that we can reduce the let's say we can scale that down but I think it is very very important to be aware of the fact that we I mean at the end of the day we as a society are deciding to spend money on this and okay I mean if there is a majority to do this but to do so then we do so but maybe if people become more aware that we can also change this I don't know but but it is a big problem thank you for your two questions I agree with the first one I did yeah I think that is a that's the current situation on the on the GDP measure yeah I I I think I I would agree but I'm not so sure whether it if we change it that it's going to that is that is so that that is a solution I think that if we I mean if we talk about a green new deal or in the green Industrial Policy I mean if we can convince or convince if we can make it clear that this would mean more jobs decent jobs not not temporary flex jobs with low pay but let's say good employment for skilled people or semi skilled people even without much of an increase in GDP so it would be a purely distribution I think people would sort of like it and in you could you could also argue that average standards of living or at the situation of average people increases so that means on the one hand that we can give up the idea of emphasizing to to to a to big degree and this notion of GDP on the other hand the notion of GDP is still I mean we still need income to redistribute so in that sense it is still it's still I mean whether we but I get your point that GDP is when we do not include all the costs which of our activities then GDP is definitely an overstatement of the income we are earning yeah we are earning but it is at a cost of future earnings which means which means at some point the bill will be sent grazie grazie Mille Tallulah ingre tell professor stone a career chip on Prancer