##### May 26, 2022

On April 30, 2022, the Santa Fe Institute’s Science Board hosted its annual symposium. The meeting’s topic — political economy and climate change — is central to SFI’s new Emergent Political Economies research theme, and will remain a focus of SFI research for the duration of the five-year grant and beyond.

SFI External Professor and outgoing Science Board co-chair, Dan Schrag, who led the symposium, said that the program would help us “prepare for the ways that climate change will affect societies around the world.” For both Schrag and SFI President David Krakauer, who contributed opening remarks, one factor we must anticipate is how unevenly the effects of climate change will be felt in different economies around the world.

To fuel dynamic thinking in SFI’s research network, Schrag invited David Victor and Lint Barrage,* two experts on the interplay between politics, economics, and climate change, as the Symposium’s main speakers.

A new theory of change will be central to any largescale strategy for responding to the global climate crisis, said Victor. His notion of change focuses on finding “ways to control emissions that are politically sustainable.” This means, in part, understanding the spectrum of changes people are likely to make. Instead of simply asking individuals to quit flying or eating meat, political leaders must find ways to facilitate technological evolution that can change our global energy system — and co-evolve in turn.

This, however, means taking on risky projects. “These are not typical investments,” Victor explained. Disruptive technologies require large-scale, experimental collaborations between companies, governments, and scientists. Complexity scientists can help investors predict risk and simulate the evolution of technology and policy — then firms and governments can better ascertain the risks worth taking.

Barrage’s talk focused on the impediments to climate progress, and the policy tools that can advance it. “Economists overwhelmingly endorse carbon pricing as a key climate policy tool,” she said, but have failed to persuade governments, particularly in the United States, to deploy it sufficiently. To motivate change and innovation, carbon must be priced at $40 to$100 per metric ton of CO2 emissions; right now, around the world, it is priced, on average, at \$2. Barrage notes that one consequence of low carbon prices is that U.S. patents in green technology have been declining.

The talks sparked a lively discussion among SFI’s researchers.

SFI Professor Sam Bowles, for example, argued that changing the structure of global energy systems is not simply a matter of creating new incentive structures. “I have a slogan,” he said: “Green incentives are no substitute for green citizens.” He emphasized that we need a new economic theory that does not consider human values to be static.

SFI Professor Ricardo Hausmann, who now joins SFI Professor Melanie Mitchell as Science Board co-Chair, helped synthesize different threads of the meeting. The choice is not between becoming less prosperous or emitting less CO2, he summarized. Instead, the process of advancing technologies and policies that reduce emissions can create growth. “I think that the focus should be on making economies prosper while reducing emissions,” he said. “The secret of growth is the growth of knowledge.”

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*David Victor is the Professor of Innovation and Public Policy at the School of Global Policy and Strategy at UC San Diego; Lint Barrage is Assistant Professor of Economics at UC San Diego and Associate Professor and Chair of Energy and Climate Economics at ETH Zurich.