On November 9 and 10, 2023, the Economic Growth Center, Tobin Center for Economic Policy, and Yale School of the Environment co-hosted the Yale Climate, Environment & Economic Growth Conference, bringing together researchers and practitioners to discuss the economic impacts and policy implications of climate and environmental change. Day 1 sessions – which focused on The Future of Growth in the Climate Transition, particularly in low- and middle-income countries – yielded five insights.

1. The “triple climate inequality crisis” is worsening. 

Three professors speaking to an auditorium
Conference co-organizer Nicholas Ryan (L) conducts a Q&A with Esther Duflo of MIT (center) and Lucas Chancel of Sciences Po (R). 

Climate breakdown is exacerbating inequality within and between countries. Lucas Chancel of Sciences Po framed this as a “triple climate inequality crisis” with overlapping crises: Poorer countries – and especially poor populations within those countries – will suffer disproportionately from climate breakdowns. At the same time, rich countries are more responsible for climate breakdowns, and rich populations emit more. Finally, rich country governments and rich individuals are far more capable of financing climate adaptation, increasing their resilience to climate shocks relative to poor countries and poor individuals. 

Thus, those who emit the most lose the least, while those who emit the least and also have the least resources to adapt lose the most. Conference presentations anticipated that this gap will continue to widen – as co-organizer Rohini Pande argued recently in Science: “The climate crisis is a crisis of inequality.” The conference also explored the inherent tensions between efforts to reduce emissions and the drive for economic growth – a point Pande highlighted in her introductory remarks. "When it comes to meeting climate goals, there is both an implementation gap and an ambition gap,” she said. “If we accept that economic growth will remain a priority, we must redefine or expand it.” 

Even as we discover how to avoid the worst climate impacts, the political economy of climate policy needs more attention. In her keynote address, Esther Duflo – the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics at MIT and a 2019 recipient of the Nobel Prize in Economics – highlighted the scale and urgency of the need to address the triple climate inequality crisis and discussed a possible way forward to address these gaping inequalities in the causes and effects of climate change. She argued for a mechanism to raise funds to support low-income countries and communities, potentially funded by a minimum global corporate tax and global wealth taxes

Watch the organizers describe key ideas behind the event

Rohini Pande, Eli Fenichel, and Nicholas Ryan discuss the future of economic growth in the face of climate change and environmental losses – key themes at the Yale Climate, Environment & Economic Growth Conference 2023, November 9-10, 2023.

2. Adaptation research is underfunded – but critical. 

While national-level policies can enable climate mitigation, adaptation typically needs to be much more localized. Investing and implementing adaptation technologies needs to happen today, as many vulnerable populations in lower income countries are already in harm’s way. Islamul Haque (YRISE), Kelsey Jack ( University of California in Santa Barbara), and Gregory Lane (University of Chicago) discussed research on adaptation technologies in low-income countries. They highlighted how technology adoption does not imply adaptation and research on how to encourage adoption of new technologies must be accompanied by longer term research programs to understand whether this translates into effective adaptation that reduces economic costs imposed by climate breakdowns. 

Advancing this agenda requires robust evidence on the effectiveness of adaptation policies – but more local adaptation policies typically receive less advocacy and see less take-up than nationwide mitigation initiatives. High-quality microeconomic research can help bridge this gap, generating the insights and data that policymakers need to make informed decisions.

Funding for climate research is regrettably small, but the funds devoted to adaptation are even smaller. In the day’s final panel, Regina Rodrigues of the Federal University of Santa Catarina in Brazil underscored the need to find resources for high-quality local weather forecasts and remote sensing in low-income environments. On the conference’s second day, Sarah Kapnick – chief scientist for the US National Oceanic and Atmospheric Administration (NOAA) – described NOAA’s efforts at generating such data. 

3. Advancing the renewables revolution requires faster regulatory reforms. 

Growth in renewables has accelerated rapidly, costs continue to fall, and the sector is widely seen as having massive opportunities for growth and climate impact. While policy changes such as the European Union’s electricity market design and the Inflation Reduction Act (IRA) in the US are supporting this momentum, regulations need to catch up with the pace of technology and the investment environment remains uncertain. 

Markets for renewables, with volatile costs and electricity prices that could reach zero in the future, will need to be supported by regulatory reforms to provide long-term assurances to investors. Such reforms also need to adapt to the prospect of rapidly increasing demand and competition among firms. 

As the regulatory environment evolves, investors could benefit from guidance on how best to invest in clean energy. For instance, while the IRA subsidizes many types of clean energy investments, many of the details have yet to be determined. Likewise, recent fluctuations in tax credits for wind energy production was a significant source of uncertainty in the industry. The IRA relieved this particular challenge, but similar sources of uncertainty remain. 

The panel on Renewable Engergy
The panel discussion on renewable energy markets (L-R): Conference co-organizer Nicholas Ryan (Yale), Catherine Wolfram (MIT), Jose Antonio Miranda (President & Chief Executive Officer, Avangrid Renewables, LLC), and Natalia Fabra (UC3M)

4. Bringing micro- and macro-level efforts together can bolster climate research.

Understanding the economic impacts of climate change and assessing the social cost of carbon needs research at multiple levels – from global and country-level macroeconomic analysis to micro-level experiments in local communities and with individual households. The challenge is that as macro-modellers are refining their estimates of how climate change will affect growth, the micro-realities of climate breakdowns, and adaptation responses are rapidly evolving. Samuel Kortum of Yale’s Department of Economics highlighted this tension, while noting the urgency at stake: "It would be preferable to build up [macro models] from tangible cases like [these] where we really know what's going on at the micro-level – but that takes years to do properly, and we may not have time to wait around for that." 

An afternoon session illustrated how we can make progress on this research venture. Valerie Ramey of the Hoover Institution at Stanford University presented macro evidence on how the spread of innovation mediates the effects of climate change on growth. Innovations in richer countries often have global benefits, highlighting the importance of global dissemination of ideas and climate innovations in an era of increasing geopolitical tensions. The second paper in the session by Allan Hsiao demonstrated how we can use micro-level evidence to inform macro-level insights. Hsiao's bottom-up analysis on adaptation to sea level rises in Indonesia complements Ramey et al.’s top-down estimation of climate change’s impact on growth. 

EGC Voices In Development Podcast, Season 2 Episode 1: Nicholas Ryan

This podcast series explores issues related to sustainable development and economic justice in low- and middle-income countries. The first episode of Season 2 features Nick Ryan of Yale University discussing the challenges low- and middle-income countries face in achieving environmentally sustainable economic growth.

5. To generate the best evidence, we need to co-develop solutions across disciplines.  

Regina Rodrigues speaking on a panel
Regina Rodrigues of the Federal University of Santa Catarina, Brasil (L) and Piers Forster of the University of Leeds, UK (R) in a panel discussion on "Modelling Climate Impacts with Human/Social Feedback". 

The final session highlighted the importance of quantitative models – which allow us to study, understand, and ultimately tell stories about the impacts of climate change and human responses to it – but such models rarely reflect true interdisciplinary efforts. Moderator Jessica Seddon of Yale’s Jackson School of Global Affairs argued for researchers to “combine the cutting edge of modeling environmental change with the cutting edge of modeling social dynamics, recognizing the environmental tipping points in our economic models and the social tipping points in our climate impact models.” 

A common thread throughout the conference was the importance of increased engagement among researchers of all stripes – the need to make, find, and reward the time for simply having conversations across disciplines

The conference also underscored the importance for researchers to engage with communities at the forefront of the climate crisis. Regina Rodrigues of the Federal University of Santa Catarina and Tejal Kanitkar from the National Institute of Advanced Studies eloquently argued for researchers to work in humility and collaboration with such communities. They also cautioned against research agendas being ‘pulled’ in response to political, top-down, and often narrow priorities, arguing instead for researchers to ‘push’ the climate agenda using frontier knowledge that can shape public discourse, policy dialogue, and community adaptation efforts and guide collective priorities and action. Tejal Kanitkar argued that both climate modelers and economists needed to understand, and work together to correct, the long-term, persistent inequalities that are assumed in existing climate models.

Vestal McIntyre, Jenna Allard, Greg Larson, and Aishwarya Lakshmi Ratan contributed to this article, with input from the conference organizers. Photos by Julia Luckett for EGC.