A0155
Title: Climate risks and multiple objectives decision-making: Model-guided and empirical assessments
Authors: Willi Semmler - New School for Social Research (United States) [presenting]
Abstract: Climate change and climate risks are studied in the context of long-run growth models In model variants with externalities, they introduce new policy components such as carbon emissions, abatement efforts, and disruptive extreme events through temperature rise. There are often conflicting goals defined, for example, between growth and climate risk control. In short- and medium-run macro models, however, new objectives such as CO2 emission, have been introduced. Yet, for macroeconomic policies, it holds that one faces many conflicting objectives, for example, between inflation rate, labour market performance, and financial instability. As growth-oriented and macro-oriented tools, instruments, and policies have proven useful, yet often, the multiple (conflicting) goals appear to reduce the effectiveness of the policy tools. We introduce the method of multiple objectives control in higher-dimensional climate-economy complex systems that allow treatment of both multiple objectives in growth- and macro-oriented models. An assessment of the effectiveness of multiple objectives control and a suggestion for providing prioritization and weights on different objectives will be given. The numerical procedure is called Linear Scalarization. It allows for dynamically providing a Pareto front and finding the weights for re-balancing imbalances. A VECM with stationary and non-stationary variables is used. This also allows us to assess what weights certain objectives should have.
