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This chapter illustrates how economists have traditionally thought about decarbonisation. It notably provides an overview of the structure and key assumptions of Integrated Assessment Models, the main tool used by economists to model climate–economic interactions, with the aim of discussing their main policy lessons with regard to the macroeconomic implications of decarbonisation.
Information on social aspects of climate change intervention, such as behavioral choices and public acceptance, are often not included in global climate models. As a result, they have been critiqued for not adequately reflecting ‘real world’ conditions. At the same time, these models are important and influential policy tools. To improve these models, calls are being made for more interaction – or integration – between the social science and modelling research communities. Yet, it remains unclear how to achieve this. Responding to this gap, we explore what kind of integration is currently taking place, how, and opportunities for further development.
Technical Summary
The importance of social drivers of climate change interventions, or social aspects, is currently underrepresented in computational modelling projections. These parameters are largely excluded from estimates of technical mitigation potential, feasibility, and tools like integrated assessment models (IAMs) and other large-scale models that influence the development of climate policies and notable bodies like the Intergovernmental Panel on Climate Change. This paper contributes to calls being made within the research community to address this gap and strengthen linkages between modelling practices and social science insights. Using nature-based solutions (NbS) as a framing, we present the results of a critical literature review and interviews with multidisciplinary experts reflecting on the current state of integration around IAMs and opportunities to better capture social aspects within large-scale modelling processes. Our findings confirm the need to incorporate social aspects in IAMs, but highlight that how this happens in practice may depend on context, project objectives, or pragmatic choices rather than conceptual notions about what ‘good’ integration is. Nevertheless, some integration strategies are better than others, and concerns about data limitations and low capacity of the IAM community for engaging in integration can be overcome with sufficient support and complementary efforts from the broader research community.
Social Media Summary
Integrating social aspects in large-scale models requires complementary efforts from the broader research community.
Two preliminaries: US experience points to the unprecedented challenge of the rapid, drastic energy transition we face, and the labor needed to accomplish it should regarded as a cost, not a benefit. This chapter thus encourages skepticism regarding claims that the cost of meeting carbon goals will be minimal and proposes questions that should be asked of optimistic studies. The most reliable analyses draw on integrated assessment models, which show we can achieve a two-thirds chance of limiting warming to 2° at moderate cost only by greatly overshooting corresponding carbon budgets, followed by decades of negative emissions using yet-to-be developed carbon removal technologies. Not predicating policy on these technologies, however, results in very high costs. Even so, these models don’t include the likelihood that much of the existing capital stock will be uneconomic to operate at high carbon prices, a potential source of enormous disruption. The closest analogy we have is the post-1989 shock in Eastern Europe when economic opening caused widespread shutdowns. It is important to be honest about costs: rosy forecasts are unconvincing, fail to prepare us for the problems we’ll need to solve and obscure the political economy of policy change.
Transformation of the world towards sustainability in line with the 2030 Agenda requires progress on multiple dimensions of human well-being. We track development of relevant indicators for Sustainable Development Goals (SDGs) 1–7 against gross domestic product (GDP) per person in seven world regions and the world as a whole. Across the regions, we find uniform development patterns where SDGs 1–7 – and therefore main human needs – are achieved at around US$15,000 measured in 2011 US$ purchasing power parity (PPP).
Technical summary
How does GDP per person relate to the achievement of well-being as targeted by the 2030 Agenda? The 2030 Agenda includes global ambitions to meet human needs and aspirations. However, these need to be met within planetary boundaries. In nascent world-earth modelling, human well-being as well as global environmental impacts are linked through economic production, which is tracked by GDP. We examined historic developments on 5-year intervals, 1980–2015, between average income and the advancement on indicators of SDGs 1–7. This was done for both seven world regions and the world as a whole. We find uniform patterns of saturation for all regions above an income threshold somewhere around US$15,000 measured in 2011 US$ PPP. At this level, main human needs and capabilities are met. The level is also consistent with studies of life satisfaction and the Easterlin paradox. We observe stark differences with respect to scale: the patterns of the world as an aggregated whole develop differently from all its seven regions, with implications for world-earth model construction – and sustainability transformations.
Social media summary
Reaching human well-being #SDGs takes GDP levels of $15k. This may help shape transformation to a world that respects #PlanetaryBoundaries.
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