As a part of the “DEV TALKS” Series
Mario Pezzini, Director of the OECD Development Centre and Special Advisor to the OECD Secretary General on Development,
cordially invites you to a conversation on
Chief Economist, Agence Française de Développement (AFD) Senior researcher CNRS, Director Energy and Prosperity Chair, École Normale Supérieure
Climate change is expected to have a negative effect on production, but it is also possible that the costs associated with higher temperatures could affect the world economy by creating instability and turmoil in the financial market[i].
This premise will be at the centre of Gaël Giraud’s presentation, based on his recent study that considers both the economic impacts of climate change and the pivotal role of private debt. Giraud’s innovative analysis considers that global warming will force the private sector to become highly leveraged to compensate for output losses. Such private debt may eventually induce a global financial collapse, even before climate change causes serious damage to the production sector. Under more severe conditions, the linkages between global warming and debt may lead to a secular stagnation followed by a collapse in the second half of the century. Giraud’s analysis considers the extent to which slower demographic growth or higher carbon pricing could avoid such a global breakdown. The analysis also considers the conditions under which the +1.5°C target, adopted by the 2015 Paris Agreement, could be reached.
Giraud’s discussion of the results from the model suggest that although the short-run impact of climate change on static economic fundamentals may be minor, the long-run dynamic consequences may lead to an extreme downside. This presentation builds on the study Coping with the Collapse: A Stock-Flow Consistent Monetary Macrodynamics of Global Warming.
Kindly register on EMS to attend this DEV Talk. Please contact Dev.Talks@oecd.org with any queries.
[i] Giraud et al, August 2016, www.afd.fr/webdav/site/afd/shared/PUBLICATIONS/RECHERCHE/Scientifiques/Papiers%20de%20recherche/29-papiers-recherche.pdf