Madi – Climate change and the economics curriculum
[Commentary adapted from a post on the World Economics Association Pedagogy Blog.]
Global discussions on climate change have revealed the deleterious effects of the main features of contemporary capitalism. First, the commodification of natural resources is a feature of the long-run process of financial expansion characterized as the financialization of the capitalist economy where social vulnerabilities have increased – mainly in developing countries. Second, market deregulation opened up new energy investment patterns in a context where institutional investors have assumed an active role in the selection of high profit potential projects. Under the expansion of monopoly-capital, deep concerns have arisen, since energy policies and investments could overlook social and environmental safeguards. In spite of these concerns, climate change has still very little impact on today’s economics curriculum.
Today, restructuring energy policies to face climate change require comprehensive solutions in order to include issues related to regulation and finance, technology and innovation, governance and politics, besides environment and social inclusion. The results of COP 20 in Lima, Peru (2014) highlighted many challenges when addressing climate change. First, there is the climate finance challenge as private actors are the main actors of the investment process while the governments lead the climate change negotiations. Second, there is the educational challenge for children, young people and professionals to face the requirements to improve teaching practices relating to the environment and disaster risk reduction. Third, there is the investment challenge of promoting a low carbon economy. The main problem does not seem to be technology, but the lack of suitable policies. Indeed, it seems to be a mismatch between the actions of the ministries of environment and the ministries of economy and finance all around the world. This year, at the beginning of COP 21 in Paris, the scenario of negotiations seems to reveal a lack of understanding between governments and the private sector required to promote changes in investment patterns and to face education challenges towards a green economy.
Considering this background, it is a must for economists to examine carefully this important aspect of our real economies in a way that leads to a better understanding in order to incorporate this important part of the real economy into our economics curricula. However, an understanding of modern economies cannot be arrived at without an understanding on of how climate change touches on development theories. Taking into account the relevance of these issues, some contemporary discussions should be included in the economics curriculum, such as: Could alternative energy policies be implemented in the short-run as they could play a decisive role in sustainable economic growth? How can new energy policies be articulated to financial and social policies? Is the US moving toward changes in energy patterns? Is China interested in building a strong partnership with other developing countries so as to face climate change vulnerabilities? Is another economic pattern of global development possible?
Commentary added, 3rd December 2015.