Sustainable Macroeconomics, Climate Risks, and Energy Transitions

June 19, 2023

Book | This book explores the myriad challenges of climate change and in reaching a low-carbon economy. It develops a framework for dynamic macroeconomic modeling for the climate-economy interaction, presents empirical trends in carbon-emitting resource use, and discusses policy strategies for sustainable growth under global climate change constraints.

Authors: Unurjargal Nyambuu and Willi Semmler

Reconciling the medium-term competing, yet frequently complementary, needs for transition policies, the book provides guidelines for complex and often conflicting climate policy tasks. It presents empirical trends in the use of carbon-emitting resources and evaluates market-driven short-termism and its adverse impact on resource use and the environment, emphasizing a medium-term macroeconomic perspective for the transition. The authors attempt a paradigm shift towards a framework of sustainable macroeconomics. They survey relevant historical models, conduct empirical and numerical analyses of the climate change-relevant dynamic models, provide empirical illustrations, and evaluate diverse policy options and implementations together with their historical evolution. New analytical issues are also considered, e.g., strategic behavior in the energy and resource sectors, energy competition and the dynamics of market shares in new energy technology, and supporting policies for dealing with the tipping points encountered in climate change.

The authors suggest a multitude of market-based strategies and public fiscal, monetary, and financial policies, and longer-run planning for resource extraction -all suitable for driving sustainable growth and a transformation of the energy sector. The book also examines the multiple delaying forces slowing the transition to a low-carbon economy; these typically arise from short-termism, lock-ins, irreversibility, leakages, non-cooperative games, and other political strategies. 

Access the book here.