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Complexity and the Economics of Climate Change: A Survey and a Look Forward

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  • Balint, T.
  • Lamperti, F.
  • Mandel, A.
  • Napoletano, M.
  • Roventini, A.
  • Sapio, A.

Abstract

Climate change is one of the most daunting challenges human kind has ever faced. In the paper, we provide a survey of the micro and macro economics of climate change from a complexity science perspective and we discuss the challenges ahead for this line of research. We identify four areas of the literature where complex system models have already produced valuable insights: (i) coalition formation and climate negotiations, (ii) macroeconomic impacts of climate-related events, (iii) energy markets and (iv) diffusion of climate-friendly technologies. On each of these issues, accounting for heterogeneity, interactions and disequilibrium dynamics provides a complementary and novel perspective to the one of standard equilibrium models. Furthermore, it highlights the potential economic benefits of mitigation and adaptation policies and the risk of under-estimating systemic climate change-related risks.

Suggested Citation

  • Balint, T. & Lamperti, F. & Mandel, A. & Napoletano, M. & Roventini, A. & Sapio, A., 2017. "Complexity and the Economics of Climate Change: A Survey and a Look Forward," Ecological Economics, Elsevier, vol. 138(C), pages 252-265.
    • Handle: RePEc:eee:ecolec:v:138:y:2017:i:c:p:252-265
    DOI: 10.1016/j.ecolecon.2017.03.032
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    More about this item

    Keywords

    Climate change; Climate policy; Climate economics; Complex systems; Agent-based models; Socio-economic networks;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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