Worst-Case Economics: Extreme Events in Climate and Finance

Wednesday, December 6, 2017 12:10:00 PM - Wednesday, December 6, 2017 2:00:00 PM
Rm. SS 1069, Sidney Smith Building, 100 St. George Street
Environment Seminar

FRANK ACKERMAN, Principal Economist, Synapse Energy Economics, Cambridge MA, USA; and Research Fellow at the Global Economic Governance Institute, Boston University and at the Global Development and Environment Institute, Tufts University

ABSTRACT: Conventional public policy analysis, rooted in a naïve and dated version of economics, minimizes or dismisses the risks of extreme events, in both climate change and financial crises. Yet all-too-possible extreme events are the subjects of greatest public concern. While climate and financial crises have distinct origins, they have similar structures, and require similar innovations in public policy. Just as nineteenth-century science provided traditional economics with paradigms of equilibrium and continuity, newer scientific innovations provide paradigms of abrupt change and relatively frequent extreme events – which should be the basis of a new approach to policymaking in an era of uncertainty and extreme risk.

BRIEF BIO: Frank Ackerman is an environmental economist who has written widely on energy, climate change, and related issues. He is well known for his critiques of conventional cost-benefit analyses of environmental protection, among other issues. He has direct studies and reports for clients ranging from Greenpeace to the European Parliament. His earlier books include Can We Afford the Future? Economics for a Warming World, and Priceless: On Knowing the Price of Everything and the Value of Nothing. Most of his research publications are available at http://frankackerman.com. He received his PhD in economics from Harvard University, and has taught at MIT, Tufts University, and the University of Massachusetts.