The New Climate Narrative

Framing climate-change mitigation as a growth opportunity instead of merely a cost should make rapid progress toward a green transformation much more feasible. What previously appeared to be a political suicide mission could now yield substantial benefits for those who lead it.

WASHINGTON, DC – As the Nobel laureate economists Robert Shiller, Abhijit Banerjee, and Esther Duflo have argued eloquently in recent books, political debate and economic policy are driven much more by simple “narratives” than by complex and nuanced theories or models. What counts are plausible “stories” that have broad intuitive appeal and can thus sway public opinion.

This is certainly true of climate policy. Modeling global warming is an immensely complicated undertaking based on “probabilistic” physical relationships and huge amounts of data about natural and human activities over many decades or centuries. But relatively straightforward messages continue to dominate policy discussions.

When the climate policy debate began, the prevailing narrative was that economic growth faced a new constraint in the form of a carbon budget, and exceeding it would bring about an undesirable amount of global warming. Policymakers would therefore have to consider a trade-off between more economic output in the near term and the damage caused by global warming in the longer term.

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