EAEPE 2016 Conference Stream: Understanding complexity and uncertainty in coupled human-natural systems, new approaches to sustainability analysis (original) (raw)

Recently, the relation between climate policy risk (e.g., the introduction of fast decarbonization policies) and macroeconomic and financial stability emerged as prominent concern on the climate policy agenda (e.g., the governor of the bank of England (Carney, 2015)). Moreover, it is likely to gain further importance with the emphasis on the 1.5°C target brought forth by the recent COP21, as well as with the recently launched Task Force on Climate-Related Financial Disclosure by the Financial Stability Board. Still, there remains a lot of uncertainty on the role of alternative green fiscal and targeted monetary policies and their systemic implications on financial markets and the amplification and cascading effects on the real economy. The sector based and Integrated Assessment Models, being based on the neoclassical equilibrium modelling approach, are not able, by construction, to model the dynamics of a complex system, such as the green economy, which is characterized by non-linearity, multiple feedbacks, time delays, non-rationale and short term thinking agents. In particular, they are not able to analyse where does uncertainty (in terms of model structure, behaviour and parameters) stand and its consequences on the interpretation of model results to provide useful policy recommendations to face better and cope with risk. Instead, evolutionary economics approaches, linked to complexity science and based on System Dynamics, Agent Based Models and Network Analysis, could fill this modelling gap and contribute to understanding and action. Therefore, within the Environment-Economy Interactions research area, we welcome submissions within the Eaepe 2016 conference that shed light on the sources of uncertainty that characterise the relation between climate finance policies and macroeconomic and financial system stability and the implications on system complexity and risk. The goal is to contribute improving sustainability models to timely inform the climate policy process and increasing the transparency towards the development of an international governance for sustainability. A selection of contributed papers will be proposed for inclusion in a special issue on Climate Policy Journal or a similar scientific journal (contacts have been set).