The Unassuming Economist

From a paper by Gregor Semieniuk, Isabella M. Weber, Iain S. Weaver, Evan Wasner, Benjamin Braun, Philip B. Holden, Pablo Salas, Jean-Francois Mercure, and Neil R. Edwards:

“The 2022 oil and gas crisis resulted in record fossil-fuel profits globally that rehabilitated the oil and gas industry, obstructed the energy transition and contributed to inflation, but their magnitude and beneficiaries have been insufficiently understood. Here we show the size of profits across countries and their distribution across socio-economic groups within the United States, using company income statements, comprehensive ownership data and a network model for propagating profits via shareholdings. We estimate that globally, net income in publicly listed oil and gas companies alone reached US$916 billion in 2022, with the United States the biggest beneficiary with claims on US$301 billion, more than U.S. investments of US$267 billion in the low carbon economy that year. In a network of U.S. shareholdings with 252,433 nodes including privately held U.S. companies, 50 % of profits went to the wealthiest 1 % of individuals, predominantly through direct shareholdings and private company ownership. In contrast the bottom 50 % only received 1 %. The incremental U.S. fossil-fuel profits in 2022 relative to 2021 were enough to increase the disposable income of the wealthiest Americans by several percent and compensate a substantial part of their purchasing power loss from inflation that year, thereby exacerbating inflation inequality. These profits also reinforced existing racial and ethnic inequalities and inequalities between groups with different educational attainments. We discuss how an excess profit tax could be used to both lower inequality and accelerate the energy transition as increasing geopolitical tensions and climate impacts threaten continued volatility in oil and gas markets.”

From a paper by Joseph Feyertag:

“Climate change, environmental degradation, and the accelerating transition to a low-carbon economy are reshaping global labour markets. These forces are altering both the demand for and supply of labour, with far-reaching implications for central banks. As institutions that closely monitor labour market dynamics to guide monetary policy, central banks will increasingly need to account for the disruptions caused by environmental pressures. Physical climate impacts and nature degradation are likely to reduce labour productivity and limit work capacity in vulnerable sectors — particularly in emerging markets and developing economies (EMDEs). At the same time, the growing need for climate mitigation and adaptation investments may tighten labour markets by increasing demand for skilled workers, while displacing those employed in pollution-intensive industries. This report addresses a critical gap in current analysis by exploring how environmental risks intersect with central banks’ mandates through the labour market. It aims to equip central banks with the insights needed to integrate these evolving risks into their policy frameworks and operational decisions.”

From a paper by Manjari Johri:

“This paper explores how neoliberal economic policies shaped industrial growth in India, but
also contributed to widening social inequality and environmental degradation. This study
examines how India can balance the economic gains of neoliberal industrialisation with its
mission for environmental preservation and social development. Using the qualitative
approach, the paper has built its argument based on secondary sources like policy documents,
government reports, and corporate CSR disclosures. David Harvey’s insights provide an
understanding of neoliberalism and its impact on democratic principles of society and on the
environment. The research proposes that Corporate Social Responsibility (CSR), mandated by
India’s Companies Act of 2013, balances the capitalist agenda, maximising the profit share
through its activities in areas like renewable energy, afforestation, and community
development. The paper argues that achieving sustainable development requires rethinking
market priorities by focusing on ethical governance, social inclusion, and ecological
responsibility.”

From the US Department of Energy:

” This report reviews scientific certainties and uncertainties in how anthropogenic carbon dioxide (CO2) and other greenhouse gas emissions have affected, or will affect, the Nation’s climate, extreme weather events, and selected metrics of societal well-being. Those emissions are increasing the concentration of CO2 in the atmosphere through a complex and variable carbon cycle, where some portion of the additional CO2 persists in the atmosphere for centuries.

Elevated concentrations of CO2 directly enhance plant growth, globally contributing to “greening” the planet and increasing agricultural productivity [Section 2.1, Chapter 9]. They also make the oceans less alkaline (lower the pH). That is possibly detrimental to coral reefs, although the recent rebound of the Great Barrier Reef suggests otherwise [Section 2.2].

Carbon dioxide also acts as a greenhouse gas, exerting a warming influence on climate and weather [Section 3.1]. Climate change projections require scenarios of future emissions. There is evidence that scenarios widely-used in the impacts literature have overstated observed and likely future emission trends [Section 3.1].

The world’s several dozen global climate models offer little guidance on how much the climate responds to elevated CO2, with the average surface warming under a doubling of the CO2 concentration ranging from 1.8°C to 5.7°C [Section 4.2]. Data-driven methods yield a lower and narrower range [Section 4.3]. Global climate models generally run “hot” in their description of the climate of the past few decades − too much warming at the surface and too much amplification of warming in the lower- and mid-troposphere [Sections 5.2-5.4]. The combination of overly sensitive models and implausible extreme scenarios for future emissions yields exaggerated projections of future warming.

Most extreme weather events in the U.S. do not show long-term trends. Claims of increased frequency or intensity of hurricanes, tornadoes, floods, and droughts are not supported by U.S. historical data [Sections 6.1-6.7]. Additionally, forest management practices are often overlooked in assessing changes in wildfire activity [Section 6.8]. Global sea level has risen approximately 8 inches since 1900, but there are significant regional variations driven primarily by local land subsidence; U.S. tide gauge measurements in aggregate show no obvious acceleration in sea level rise beyond the historical average rate [Chapter 7].

Attribution of climate change or extreme weather events to human CO2 emissions is challenged by natural climate variability, data limitations, and inherent model deficiencies [Chapter 8]. Moreover, solar activity’s contribution to the late 20th century warming might be underestimated [Section 8.3.1].

Both models and experience suggest that CO2-induced warming might be less damaging economically than commonly believed, and excessively aggressive mitigation policies could prove more detrimental than beneficial [Chapters 9, 10, Section 11.1]. Social Cost of Carbon estimates, which attempt to quantify the economic damage of CO2 emissions, are highly sensitive to their underlying assumptions and so provide limited independent information [Section 11.2].

U.S. policy actions are expected to have undetectably small direct impacts on the global climate and any effects will emerge only with long delays [Chapter 12].”

From a paper by Heru Wahyudi, Sabila Ramadani, and Ukhti Ciptawaty:

“Human welfare can decrease as a result of a polluted environment. This study aims to examine the relevance of the Environmental Kuznets Curve (EKC) theory in OPEC member countries; besides that, this study also wants to see the effect of GDP per capita and fossil energy consumption on carbon dioxide gas emissions in OPEC countries. Method: this research is included in the descriptive quantitative method using the panel data regression method. The data used in the 2005-2020 period comes from the World Bank and Our World. Namely the GDP per capita variable, the carbon dioxide emission variable and fossil energy consumption. The results obtained from this study are that the hypothesis in EKC theory is relevant or occurs in OPEC member countries. In addition, per capita GDP and fossil energy consumption also positively affected OPEC member countries for the 2005-2020 period. It means that an increase in the economy will cause environmental damage by increasing the concentration of carbon dioxide gas emissions due to the use of fossil energy. However, at some point, a high economy will reduce environmental damage due to an economic orientation that focuses on the environment so that it uses environmentally friendly energy.”