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.
Complexity and the Economics of Climate Change: a Survey and a Look Forward
T. Balint
Université Paris 1 Pathéon-Sorbonne and CNRS
Francesco Lamperti
Scuola Superiore Sant’Anna
Antoine Mandel
Université Paris 1 Pathéon-Sorbonne and CNRS
Mauro Napoletano
OFCE and Skema Business School, Scuola Superiore Sant’Anna
Andrea Roventini
Scuola Superiore Sant’Anna, Ofce, Sciences Po
Alessandro Sapio
Parthenope University of Naples