Quotation Monasterolo, Irene, Roventini, Andrea, Foxon, Tim J. . 2019. Understanding uncertainty of climate policies and implications for economics and finance: an evolutionary economics approach.




The assessment of the socio-economic and financial impacts of climate change represents a main source of uncertainty for policy makers and investors. However, traditional climate economics and financial risk models are not properly equipped to consider the characteristics of climate risks and the opportunities from climate-alignment, being constrained by equilibrium conditions and linearity of impacts, as well as by representative agents and intertemporal optimization. Given the closing window of opportunity to achieve the 2C target, there is an urgent need for a new wave of models able to embrace uncertainty and complexity deriving not only from climate impacts on socio-economic systems, but also from their reaction. In this regard, approaches rooted on evolutionary economics and complexity science could provide complementary insights to traditional climate economics models. This special issue contributes to fill in this knowledge gap by collecting the best nine unpublished papers applying evolutionary and complex systems approaches, and agent-based and network models to climate change economics, presented at the Special Session of the Research Area “Environment-Economics Interactions” of the European Association of Evolutionary Political Economy (EAEPE)’s conference 2016. By introducing conceptual and methodological innovations in climate economics and finance, the nine articles analyse the conditions for effective climate policies and financial instruments to align countries to the global climate targets, compared to the costs of inaction. This information is crucial to support decision-makers in the analysis of climate-finance policies and instruments to foster the transition to a sustainable and inclusive low-carbon economy.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title Understanding uncertainty of climate policies and implications for economics and finance: an evolutionary economics approach
Year 2019
JEL Q54, Q57, E60, 033


Monasterolo, Irene (Details)
Foxon, Tim J. (University of Sussex, SPRU, United Kingdom)
Roventini, Andrea (Sant'Anna School of Advanced Studies, Pisa, Italy)
Institute for Ecological Economics IN (Details)
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