December 2, 2023

Low-income and lower-middle-income economies are responsible for only a small portion of global carbon emissions, but they bear a disproportionate burden of the adverse effects of climate change. These countries are faced with numerous challenges to their efforts to mitigate carbon emissions. There is a considerable disparity in the availability of knowledge and technologies that are crucial for both mitigation of and adaptation to climate risks, and advanced economies, aiming to protect private sector interests, are reluctant to promote technological transfer. There is also a lack of funding and capital flows necessary for climate adaptation and the transition to a low-carbon economy. Furthermore, sovereign debt heavily constrains low and middle-income countries from using debt or bond financing for climate change challenges. 

This workshop had the goal of creating a better understanding of — and possible solutions for — the challenges faced by low- and middle-income economies due to climate change.

This workshop focused on the following themes:

1. Gaining a better understanding of how various macroeconomic factors are related to the production of CO2 emissions.

2. Identifying the types of climate disasters and damages that can be expected to occur in certain regions and countries. This will inform region-specific consequences of climate change, such as water scarcity, diminished agricultural yield, increased frequency of extreme weather events, and lower economic growth. All these factors contribute to additional challenges such as mass migration, heightened geopolitical tensions, and an increased wealth gap between high- and low-income economies.

3. Low- and middle-income economies are faced with a trade-off between economic growth, which still mostly relies on fossil-fuel use, and lower emissions. We discussed the tradeoffs between climate protection and economic growth.

4. What role can various sectors play in adapting to and mitigating the impacts of climate change? What are the private sector dynamics concerning new renewable energy technologies? Can the financial sector be of help in funding the transition to low-carbon economies? Does high indebtedness and other economic indicators hamper the flow of funds (given higher perceived risks)? Can there be a stronger role for the public sector, for example with climate-related infrastructure investments and fiscal/monetary policy? Finally, what are the distributional impacts of climate policies? 

Agenda

Session 1 | Challenges of Climate Change in Africa 
Moderator: Ibrahim Tahri (PIK, Potsdam)

Jose Neves and João Braga: Climate Challenges in Africa and Latin America

Marieme Toure: Climate Change Impact on Agricultural Production and Food Security in Sub-Saharan Africa - Evidence from Senegal

Session 2 | Challenges of Climate Change and Migration
Moderator: Alex Aleinikoff

Alex Aleinikoff: Some remarks on global norms and institutions concerning climate-related migration

Albano Rikani: More people too poor to move: divergent effects of climate change on global migration patterns

Achilles Kallergis: Urban Dimensions of Environmental Mobility: Evidence from African Cities

Plenary Speaker | Dr. Nicoletta Batini (IMF): Climate Risks and Sustainable Agriculture

Session 4 | Climate Change and Green Transition
Moderator: Ibrahim Tahri (PIK, Potsdam)

Ettore Gallo: Green Investment and Productivity: Main Policy Challenges in the EU Presentation

Julia Puaschunder: Bringing Nature into Economics: Natural Resources and Climate Wealth of Nations in National and International Accounting

Nataliaa Bychkova: ESG Concerns in Ukraine Reconstruction

Session 5 | Macroeconomics of Climate Change
Moderators: Willi Semmler and Samuel Owusu

Feridoon Koohi-Kamali: Modeling the Global Macroeconomic. Effects of Carbon Tax on Transition to Low CO2 Presentation

Oriol Valles Codina: Business Cycles, Sectoral Price Stabilization, and Climate Change Mitigation: a Model of Multi-Sector Growth in the Tradition of the Bielefeld Disequilibrium Approach

Samuel Owusu: The relationship between CO2 emissions, renewable and fossil fuel consumption, FDI, economic growth, import and energy intensity: Evidence from the top three production-based CO2 emissions in Africa in 2022

Session 6 | Green Transition Challenges at the Firm and Individual Level 
Moderator: Samuel Owusu

Behnaz Minooei Fard, University of Venice: Energy Transition and Rare Earth Resource Constraints: Market Dynamics in an Asymmetric Duopoly Model Presentation

Tato Khundadze: Consumo Ergo Sum’: Endogenous Evolution of Preferences and Complex Economic Dynamics

Ibrahim Tahri: Public Infrastructure Delays and Transition Risks

Part One | Sessions 1-4

Part Two | Sessions 5&6