Class 6 on Global Environmental Politics (on economics and environment). All slides courtesy of Prof. Dr. Joachim Monkelbaan

1. Economics and
environment
International University in Geneva
Dr. Joachim Monkelbaan

2. Contents
today
World Economic Forum in Davos
Global Risk Report
International Financial Institutions
Market mechanisms/Carbon pricing
Decoupling and economic growth
Circular economy
Environmental Performance Index

5. International Financial Institutions
• Three Bretton Woods institutions
• 2008 financial crisis: downturn in pollution, but environment down on
the agenda
• Criticism of WB and IMF policies
• green economy is "one that results in improved human well-being
and social equity, while significantly reducing environmental risks and
ecological scarcities. It is low carbon, resource efficient, and socially
inclusive" (UNEP, 2011).

6. Market mechanisms
• Definition
• https://www.citeco.fr/milto
n-friedman-%C2%AB-le-
crayon-pouvoir-du-
march%C3%A9-et-
capitalisme-%C2%BB
• Command and control:
ozone, chemicals
• Payments for Ecosystem
Services (PES), e.g. REDD+
• Carbon

7. Carbon tax vs ETS
Carbon tax: certainty about
price
Cap-and-trade/emissions
trading: certainty about
reduction, price set by the
market, complex, lobbying,
volatility

8. Decoupling

9. No
decoupling
Diminishing returns (more energy needed to extract resources)
Rebound effects
Services on top of material economy
Problem shifting (e.g. lithium for electric cars)
Recycling rates low and require energy
Innovation not radical enough
Decoupling mostly driven by exports of pollution (ecological
footprints increase)

10. Economic growth
2012 research: consumption of natural resources (including fish, livestock, forests, metals, minerals, and
fossil fuels) rises from 70 Bn metric tons per year in 2012 to 180 Bn metric tons per year by 2050
For reference, a sustainable level of resource use is about 50 billion metric tons per year—a boundary we
breached back in 2000.
Even if whole world adopts best practices, will hit 93 Bn/year in 2050
UNEP IRP: model with carbon price of $573 per metric ton, resource extraction tax, assumed rapid
technological innovation spurred by strong government support -> still hit 132 billion metric tons by 2050.

11. Circular
economy:
https://www.
ellenmacarth
urfoundation
.org/circular-
economy/co
ncept

15. Environmental performance index

16. EPI Framework

18. Any questions?
jmonkelbaan@iun.ch